FLORENCE, S.C., Oct. 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 third quarter of 2025.
Third Quarter 2025 Highlights
- Net income increased 48.8% for the third quarter of 2025 to $2.7 million, or $0.33 per diluted share, compared to $1.8 million, or $0.22 per diluted share, for the third quarter of 2024. For the nine months ended September 30, 2025, net income totaled $8.0 million, or $0.96 per diluted share, compared to $5.0 million, or $0.61 per diluted share for the same period in 2024. Operating earnings (Non-GAAP) increased 39.2% for the third quarter of 2025 to $2.7 million, or $0.33 per diluted share, compared to $2.0 million, or $0.24 per diluted share, for the third quarter of 2024. For the nine months ended September 30, 2025, operating earnings (Non-GAAP) totaled $6.6 million or $0.79 per diluted share, compared to $5.1 million, or $0.63 per diluted share, for the comparable period of 2024.
- Book value per share increased $1.44, or 14.4%, from $9.98 per share at September 30, 2024, to $11.42 per share at September 30, 2025. Tangible book value per share (Non-GAAP) increased $1.44, or 14.6%, from $9.89 per share at September 30, 2024, to $11.33 per share at September 30, 2025.
- Net interest income for the third quarter of 2025 was $9.5 million, which represents an increase of $1.3 million, or 16.7%, compared to the same quarter one year ago. Compared to the second quarter of 2025, the increase was $344,000, or 3.8%.
- Net interest margin increased during the third quarter of 2025 to 3.66%, compared to 3.53% in the second quarter of 2025, and increased 39 basis points compared to the third quarter of 2024.
- The third quarter of 2025 efficiency ratio improved to 69.61% down from 76.90% one year ago. The adjusted efficiency ratio (Non-GAAP) improved from 72.82% in the third quarter of 2024 to 69.61% in the third quarter of 2025.
- Total loans held for investment decreased $4.8 million, or 2.4% annualized, to $780.0 million at September 30, 2025, from $784.7 million at June 30, 2025. This decrease was the result of the decline in the loan portfolio associated with the North Carolina branches (deposits and locations sold in the second quarter of 2025), which totaled approximately $9.8 million.
- Total deposits increased $9.0 million, or 3.8% annualized, to $959.3 million at September 30, 2025, from $950.3 million at June 30, 2025.
- Asset quality remains strong. Nonperforming assets increased to $369 thousand, or 0.03% of total assets at September 30, 2025, compared to $205 thousand, or 0.02% of total assets at June 30, 2025. This increase was related to one mortgage loan that is fully collateralized.
- 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. The repurchase program does not obligate the Company to purchase any particular number of shares and may be modified or terminated by the Company's Board of Directors at any time. During the third quarter of 2025, the Company repurchased 122,316 shares at a weighted-average cost per share of $9.71.
Rick Saunders, Chief Executive Officer, commented, "Operating earnings per share improved 22%, in the third quarter of 2025, from the second quarter of 2025. Our net interest margin increased 13 basis points and our adjusted efficiency ratio improved to 69.6%. Tangible book value per share grew by $1.44 per share over the past year to $11.33, an increase of 14.6%. We grew deposit balances by $9.0 million, or 3.8% annualized. Loan growth remained muted in the third quarter of 2025, primarily from the loans paid down and paid off associated with the sale of the North Carolina branches. Credit quality remains strong with low nonperforming assets and low net charge offs. Our return on average tangible equity was 10.83% thus far in 2025, excluding nonrecurring items. Our bankers and teams are executing high quality service for our customers through relationship banking throughout our markets in South Carolina."
| Financial Summary | |||||||||
| | |||||||||
| | Three Months Ended | | Nine Months Ended | ||||||
| | Sep 30 | Jun 30 | Mar 31 | Dec 31 | Sep 30 | | Sep 30 | | Sep 30 |
| ($ in thousands, except per share data) | 2025 | 2025 | 2025 | 2024 | 2024 | | 2025 | | 2024 |
| Earnings: | | | | | | | | | |
| Net income available to common shareholders | $ 2,714 | $ 3,653 | $ 1,613 | $ 918 | $ 1,825 | | $ 7,980 | | $ 5,005 |
| Operating earnings (Non-GAAP) | 2,714 | 2,248 | 1,665 | 1,698 | 1,950 | | 6,627 | | 5,130 |
| Earnings per common share, diluted (GAAP) | 0.33 | 0.44 | 0.19 | 0.11 | 0.22 | | 0.96 | | 0.61 |
| Operating earnings per common share, diluted (Non-GAAP) | 0.33 | 0.27 | 0.20 | 0.21 | 0.24 | | 0.79 | | 0.63 |
| Total revenue(1) | 12,238 | 13,920 | 11,158 | 9,809 | 9,855 | | 37,316 | | 29,771 |
| Net interest margin | 3.66 % | 3.53 % | 3.49 % | 3.38 % | 3.27 % | | 3.58 % | | 3.20 % |
| Return on average assets(2) | 0.99 % | 1.32 % | 0.59 % | 0.35 % | 0.69 % | | 0.97 % | | 0.65 % |
| Return on average assets - Operating Non-GAAP(2) | 0.99 % | 0.81 % | 0.61 % | 0.64 % | 0.74 % | | 0.81 % | | 0.66 % |
| Return on average equity(2) | 12.55 % | 17.84 % | 8.15 % | 4.66 % | 9.60 % | | 12.93 % | | 9.16 % |
| Return on average equity - Operating Non-GAAP(2) | 12.55 % | 10.98 % | 8.41 % | 8.62 % | 10.26 % | | 10.74 % | | 9.39 % |
| Efficiency ratio(3) | 69.61 % | 64.61 % | 75.52 % | 86.42 % | 76.90 % | | 69.51 % | | 77.67 % |
| Adjusted efficiency ratio - Non-GAAP(3) | 69.61 % | 74.03 % | 75.04 % | 78.29 % | 75.66 % | | 72.82 % | | 77.25 % |
| | As of | ||||
| | Sep 30 | Jun 30 | Mar 31 | Dec 31 | Sep 30 |
| ($ in thousands) | 2025 | 2025 | 2025 | 2024 | 2024 |
| Balance Sheet: | | | | | |
| Total assets | $ 1,097,846 | $ 1,102,203 | $ 1,097,389 | $ 1,067,104 | $ 1,071,480 |
| Total loans receivable | 779,997 | 784,749 | 784,469 | 753,738 | 739,219 |
| Total deposits | 959,300 | 950,339 | 978,667 | 951,411 | 951,948 |
| Total transaction deposits(4) to total deposits | 40.68 % | 39.50 % | 39.46 % | 38.64 % | 38.82 % |
| Loans to deposits | 81.31 % | 82.58 % | 80.16 % | 79.22 % | 77.65 % |
| Bank Capital Ratios: | | | | | |
| Total risk-based capital ratio | 13.58 % | 12.88 % | 12.99 % | 13.48 % | 13.56 % |
| Tier 1 risk-based capital ratio | 12.48 % | 11.84 % | 11.92 % | 12.43 % | 12.51 % |
| Tier 1 leverage ratio | 9.94 % | 9.74 % | 9.80 % | 9.96 % | 9.87 % |
| Common equity tier 1 capital ratio | 12.48 % | 11.84 % | 11.92 % | 12.43 % | 12.51 % |
| Asset Quality Ratios: | | | | | |
| Nonperforming assets as a percentage of | 0.03 % | 0.02 % | 0.09 % | 0.11 % | 0.09 % |
| Allowance for credit losses as a percentage | 1.12 % | 1.09 % | 1.10 % | 1.12 % | 1.13 % |
| Annualized net charge-offs as a percentage | 0.02 % | 0.03 % | 0.08 % | 0.00 % | 0.03 % |
| CONDENSED CONSOLIDATED INCOME STATEMENTS - Unaudited | |||||||
| | |||||||
| | Three Months Ended | Nine Months Ended | |||||
| | Sep 30 | Jun 30 | Mar 31 | Dec 31 | Sep 30 | Sep 30 | |
| ($ in thousands, except per share data) | 2025 | 2025 | 2025 | 2024 | 2024 | 2025 | 2024 |
| Interest income | | | | | | | |
| Loans | $ 11,842 | $ 11,657 | $ 11,293 | $ 11,053 | $ 10,930 | $ 34,792 | $ 31,761 |
| Investment securities | 2,300 | 2,145 | 2,166 | 2,015 | 1,969 | 6,611 | 5,816 |
| Other interest income | 323 | 505 | 318 | 512 | 623 | 1,146 | 1,333 |
| Total interest income | 14,465 | 14,307 | 13,777 | 13,580 | 13,522 | 42,549 | 38,910 |
| Interest expense | | | | | | | |
| Deposits | 4,536 | 4,703 | 4,468 | 4,613 | 4,833 | 13,707 | 13,817 |
| Other interest expense | 476 | 495 | 544 | 564 | 585 | 1,515 | 2,115 |
| Total interest expense | 5,012 | 5,198 | 5,012 | 5,177 | 5,418 | 15,222 | 15,932 |
| Net interest income | 9,453 | 9,109 | 8,765 | 8,403 | 8,104 | 27,327 | 22,978 |
| Provision for credit (recovery of) losses | 90 | 88 | 707 | 141 | (83) | 885 | 179 |
| Net interest income after provision for credit losses | 9,363 | 9,021 | 8,058 | 8,262 | 8,187 | 26,442 | 22,799 |
| Noninterest income | | | | | | | |
| Mortgage banking income | 1,577 | 1,586 | 1,351 | 1,207 | 805 | 4,514 | 3,596 |
| Service fees on deposit accounts | 412 | 299 | 319 | 327 | 327 | 1,030 | 970 |
| Debit card and other service charges, | 531 | 543 | 529 | 550 | 528 | 1,603 | 1,615 |
| Income from bank owned life insurance | 108 | 104 | 102 | 108 | 105 | 314 | 310 |
| Loss on sale of securities, net | - | - | (182) | (146) | (162) | (182) | (162) |
| 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 | 157 | 166 | 134 | 198 | 148 | 457 | 444 |
| Total noninterest income | 2,785 | 4,811 | 2,393 | 1,406 | 1,751 | 9,989 | 6,793 |
| Noninterest expense | | | | | | | |
| Compensation and benefits | 5,431 | 5,574 | 5,281 | 5,028 | 4,682 | 16,286 | 14,253 |
| Occupancy and equipment | 736 | 770 | 791 | 890 | 848 | 2,297 | 2,526 |
| Data processing, technology, and communications | 1,061 | 1,143 | 1,156 | 1,184 | 994 | 3,360 | 3,152 |
| Professional fees | 195 | 248 | 153 | 268 | 265 | 596 | 471 |
| Marketing | 155 | 175 | 123 | 103 | 66 | 453 | 328 |
| Other | 941 | 1,083 | 923 | 1,003 | 723 | 2,947 | 2,393 |
| Total noninterest expense | 8,519 | 8,993 | 8,427 | 8,476 | 7,578 | 25,939 | 23,123 |
| Income before provision for income taxes | 3,629 | 4,839 | 2,024 | 1,192 | 2,360 | 10,492 | 6,469 |
| Income tax expense | 915 | 1,186 | 411 | 273 | 535 | 2,512 | 1,464 |
| Net income available to common shareholders | $ 2,714 | $ 3,653 | $ 1,613 | $ 919 | $ 1,825 | $ 7,980 | $ 5,005 |
| 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 | 125 |
| Operating net income (non-GAAP) | 2,714 | 2,248 | 1,665 | 1,699 | 1,950 | 6,627 | 5,130 |
| Weighted average common shares - basic | 7,902 | 7,892 | 7,868 | 7,851 | 7,847 | 7,887 | 7,845 |
| Weighted average common shares - diluted | 8,349 | 8,350 | 8,331 | 8,274 | 8,221 | 8,344 | 8,255 |
| Basic net income per common share* | $ 0.34 | $ 0.46 | $ 0.21 | $ 0.21 | $ 0.23 | $ 1.01 | $ 0.64 |
| Diluted net income per common share* | $ 0.33 | $ 0.44 | $ 0.19 | $ 0.11 | $ 0.22 | $ 0.96 | $ 0.61 |
| Operating basic net income per common share (non-GAAP)* | $ 0.34 | $ 0.28 | $ 0.21 | $ 0.22 | $ 0.25 | $ 0.84 | $ 0.66 |
| Operating diluted net income per common share (non-GAAP)* | $ 0.33 | $ 0.27 | $ 0.20 | $ 0.21 | $ 0.24 | $ 0.79 | $ 0.63 |
| |
| *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 September 30, 2025, was $2.7 million, or $0.33 per diluted common share, compared to $1.8 million, or $0.22 per diluted common share, for the three months ended September 30, 2024. Operating net income (Non-GAAP), for the three months ended September 30, 2025, was $2.7 million, or $0.33 per diluted common share, compared to $2.0 million, or $0.24 per diluted common share for the three months ended September 30, 2024. Net income for the nine months ended September 30, 2025, totaled $8.0 million, or $0.96 per diluted common share, compared to $5.0 million, or $0.61 per diluted common share for the comparable period of 2024. On an operating basis, diluted EPS (Non-GAAP) was $0.79 per diluted common share, for the nine months ended September 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 $0.63 per diluted common share, for the nine months ended September 30, 2024.
Noninterest income, for the three months ended September 30, 2025, was $2.8 million, an increase of $1.0 million from $1.8 million for the same period in 2024. Noninterest income was primarily driven by mortgage banking income and totaled $1.6 million in the third quarter of 2025 compared to $805 thousand in the third quarter of 2024. In addition, all of the other categories of noninterest income increased.
For the nine months ended September 30, 2025, noninterest income increased by $3.2 million, driven by improved mortgage banking income of $918 thousand, gain on sale of branches of $2.3 million, and gain on the early extinguishment of debt of $140 thousand. These improvements were partially offset by the write down of fixed assets of $200 thousand, compared to a $20 thousand gain in the same period of 2024.
Noninterest expense, for the three months ended September 30, 2025, was $8.5 million, an increase of $941 thousand from $7.6 million for the same period in 2024. This increase in expense was primarily driven by an increase in compensation and benefits of $749 thousand due primarily to mortgage commissions, salaries and stock compensation expense, and $218 thousand in other expense primarily associated with costs related ATM and debit card losses, a contract cancellation and receipt of lawsuit settlement in 2024.
Noninterest expense, for the nine months ended September 30, 2025, was $25.9 million and increased $2.8 million from the same period in 2024. This increase in noninterest expense was primarily related to compensation and benefits of $2.0 million attributable to salaries, mortgage commissions and stock compensation expense, an increase in professional fees of $125 thousand related to audit expense associated with FDICIA compliance, an increase in marketing of $125 thousand, and $554 thousand increase in other expense, which includes $336 thousand associated with costs related to the sale of the two branches in North Carolina.
There were no operating adjustments in 3Q 2025.
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 $23 thousand.
| NET INTEREST INCOME AND MARGIN - Unaudited - QTD | |||||||||||
| | |||||||||||
| | For the Three Months Ended | ||||||||||
| | September 30, 2025 | | June 30, 2025 | | September 30, 2024 | ||||||
| | Average | Income/ | Yield/ | | Average | Income/ | Yield/ | | Average | Income/ | Yield/ |
| ($ in thousands) | Balance | Expense | Rate | | Balance | Expense | Rate | | Balance | Expense | Rate |
| Assets | | | | | | | | | | | |
| Interest-earning assets | | | | | | | | | | | |
| Federal funds sold and interest- | $ 35,237 | $ 296 | 3.33 % | | $ 46,216 | $ 478 | 4.15 % | | $ 50,030 | $ 588 | 4.68 % |
| Investment securities | 193,519 | 2,300 | 4.72 % | | 186,573 | 2,145 | 4.61 % | | 173,728 | 1,969 | 4.51 % |
| Nonmarketable equity securities | 1,795 | 26 | 5.84 % | | 1,665 | 28 | 6.65 % | | 1,509 | 35 | 9.19 % |
| Loans held for sale | 12,381 | 301 | 9.65 % | | 16,269 | 353 | 8.70 % | | 21,629 | 347 | 6.38 % |
| Loans | 780,426 | 11,541 | 5.87 % | | 783,489 | 11,304 | 5.79 % | | 737,666 | 10,583 | 5.71 % |
| Total interest-earning assets | 1,023,358 | 14,465 | 5.61 % | | 1,034,212 | 14,307 | 5.55 % | | 984,562 | 13,522 | 5.46 % |
| Allowance for credit losses | (8,508) | | | | (8,652) | | | | (8,491) | | |
| Noninterest-earning assets | 80,739 | | | | 80,987 | | | | 78,402 | | |
| Total assets | $ 1,095,588 | | | | $ 1,106,547 | | | | $ 1,054,473 | | |
| | | | | | | | | | | | |
| Liabilities and Shareholders' Equity | | | | | | | | | | | |
| Interest-bearing liabilities | | | | | | | | | | | |
| NOW accounts | $ 123,107 | $ 230 | 0.74 % | | $ 158,726 | $ 242 | 0.61 % | | $ 138,726 | $ 236 | 0.68 % |
| Savings & money market | 410,051 | 2,893 | 2.80 % | | 435,548 | 3,127 | 2.88 % | | 384,155 | 2,941 | 3.05 % |
| Time deposits | 168,116 | 1,413 | 3.33 % | | 158,378 | 1,334 | 3.38 % | | 175,921 | 1,656 | 3.74 % |
| Total interest-bearing deposits | 701,274 | 4,536 | 2.57 % | | 752,652 | 4,703 | 2.51 % | | 698,802 | 4,833 | 2.75 % |
| FHLB advances and other borrowings | 20,652 | 217 | 4.17 % | | 17,913 | 191 | 4.29 % | | 15,979 | 226 | 5.63 % |
| Subordinated debentures | 19,775 | 259 | 5.19 % | | 23,228 | 304 | 5.25 % | | 25,743 | 359 | 5.55 % |
| Total interest-bearing | 741,701 | 5,012 | 2.68 % | | 793,793 | 5,198 | 2.63 % | | 740,524 | 5,418 | 2.91 % |
| Noninterest bearing deposits | 253,702 | | | | 217,979 | | | | 224,121 | | |
| Other liabilities | 13,666 | | | | 12,885 | | | | 13,807 | | |
| Shareholders' equity | 86,519 | | | | 81,890 | | | | 76,021 | | |
| Total liabilities and | $ 1,095,588 | | | | $ 1,106,547 | | | | $ 1,054,473 | | |
| | | | | | | | | | | | |
| Net interest income (tax equivalent) / interest | | $ 9,453 | 2.93 % | | | $ 9,109 | 2.92 % | | | $ 8,104 | 2.55 % |
| Net Interest Margin | | | 3.66 % | | | | 3.53 % | | | | 3.27 % |
| | | | | | | | | | | | |
| Cost of funds, including | | | 2.00 % | | | | 2.06 % | | | | 2.23 % |
Net interest income, for the three months ended September 30, 2025, was $9.5 million compared to $8.1 million for the three months ended September 30, 2024. This increase was the result of an increase in interest income of $943 thousand and a decrease in interest expense of $406 thousand. This resulted in an improved net interest margin to 3.66% from 3.27% one year ago. Loans and securities had the largest gains in income and in yields compared to the prior year, partially offset by interest- bearing cash and fed funds sold and nonmarketable equity securities. While lower yields in all categories of interest-bearing liabilities, except NOW accounts, contributed to the improved net interest margin. In addition, the total cost of funds, including noninterest-bearing deposits, decreased to 2.00% in the third quarter of 2025, compared to 2.23% in the third quarter of 2024.
| NET INTEREST INCOME AND MARGIN - Unaudited - YTD | |||||||
| | |||||||
| | For the Nine Months Ended | ||||||
| | September 30, 2025 | | September 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 | $ 37,905 | $ 1,066 | 3.76 % | | $ 36,339 | $ 1,233 | 4.53 % |
| Investment securities | 186,815 | 6,611 | 4.73 % | | 170,643 | 5,816 | 4.55 % |
| Nonmarketable equity securities | 1,716 | 80 | 6.24 % | | 1,897 | 100 | 7.02 % |
| Loans held for sale | 16,065 | 1,018 | 8.47 % | | 20,563 | 1,047 | 6.80 % |
| Loans | 777,837 | 33,774 | 5.81 % | | 728,337 | 30,714 | 5.63 % |
| Total interest-earning assets | 1,020,339 | 42,549 | 5.58 % | | 957,779 | 38,910 | 5.43 % |
| Allowance for credit losses | (8,564) | | | | (8,464) | | |
| Noninterest-earning assets | 80,756 | | | | 79,272 | | |
| Total assets | $ 1,092,531 | | | | $ 1,028,587 | | |
| | | | | | | | |
| Liabilities and Shareholders' Equity | | | | | | | |
| Interest-bearing liabilities | | | | | | | |
| NOW accounts | $ 142,638 | $ 702 | 0.66 % | | $ 140,904 | $ 774 | 0.73 % |
| Savings & money market | 421,621 | 8,892 | 2.82 % | | 362,942 | 8,097 | 2.98 % |
| Time deposits | 161,259 | 4,113 | 3.41 % | | 176,586 | 4,946 | 3.74 % |
| Total interest-bearing deposits | 725,518 | 13,707 | 2.53 % | | 680,432 | 13,817 | 2.71 % |
| FHLB advances and other borrowings | 19,407 | 622 | 4.28 % | | 24,322 | 1,019 | 5.59 % |
| Subordinated debentures | 22,649 | 893 | 5.27 % | | 25,735 | 1,096 | 5.69 % |
| Total interest-bearing liabilities | 767,574 | 15,222 | 2.65 % | | 730,489 | 15,932 | 2.91 % |
| Noninterest bearing deposits | 229,737 | | | | 211,620 | | |
| Other liabilities | 12,922 | | | | 13,639 | | |
| Shareholders' equity | 82,298 | | | | 72,839 | | |
| Total liabilities and shareholders' equity | $ 1,092,531 | | | | $ 1,028,587 | | |
| | | | | | | | |
| Net interest income (tax equivalent) / interest | | $ 27,327 | 2.93 % | | | $ 22,978 | 2.52 % |
| Net Interest Margin | | | 3.58 % | | | | 3.20 % |
| | | | | | | | |
| Cost of funds, including noninterest bearing deposits | | | 2.04 % | | | | 2.26 % |
Net interest income for the nine months ended September 30, 2025, totaled $27.3 million compared to $23.0 million for the nine months ended September 30, 2024, an increase of $4.3 million. The net interest margin was 3.58% for the first nine months of 2025 compared to 3.20% for the same period in 2024. The yield on interest-earning assets improved by 14 basis points to 5.57%, led by loans and investment securities. Yields on all interest-bearing liabilities have also declined in all categories, with total yield on interest-bearing liabilities declining by 26 basis points. The total cost of funds, including noninterest-bearing deposits was 2.04% compared to 2.26% in 2024.
| CONDENSED CONSOLIDATED BALANCE SHEETS - Unaudited | |||||
| | |||||
| | As of | ||||
| | Sep 30 | Jun 30 | Mar 31 | Dec 31 | Sep 30 |
| ($ in thousands) | 2025 | 2025 | 2025 | 2024 | 2024 |
| Assets | | | | | |
| Cash and cash equivalents: | | | | | |
| Cash and due from banks | $ 5,072 | $ 4,066 | $ 5,011 | $ 4,604 | $ 4,730 |
| Interest-bearing deposits with banks | 26,695 | 29,487 | 32,922 | 42,623 | 61,934 |
| Total cash and cash equivalents | 31,767 | 33,553 | 37,933 | 47,227 | 66,664 |
| Investment securities: | | | | | |
| Investment securities available for sale | 199,674 | 194,136 | 181,596 | 175,846 | 177,641 |
| Other investments | 1,527 | 2,497 | 950 | 886 | 883 |
| Total investment securities | 201,201 | 196,633 | 182,546 | 176,732 | 178,524 |
| Mortgage loans held for sale | 13,336 | 14,944 | 22,424 | 20,974 | 19,929 |
| Loans receivable: | | | | | |
| Loans | 779,997 | 784,749 | 784,469 | 753,738 | 739,219 |
| Less allowance for credit losses | (8,741) | (8,535) | (8,654) | (8,434) | (8,317) |
| Loans receivable, net | 771,256 | 776,214 | 775,815 | 745,304 | 730,902 |
| Property and equipment, net | 23,313 | 22,469 | 21,987 | 21,353 | 21,861 |
| Mortgage servicing rights | 14,421 | 14,093 | 13,614 | 13,410 | 12,690 |
| Bank owned life insurance | 18,922 | 18,815 | 18,710 | 18,608 | 18,501 |
| Deferred income taxes | 6,221 | 6,510 | 6,938 | 7,709 | 6,292 |
| Other assets | 17,409 | 18,972 | 17,422 | 15,787 | 16,117 |
| Total assets | 1,097,846 | 1,102,203 | 1,097,389 | 1,067,104 | 1,071,480 |
| Liabilities | | | | | |
| Deposits | $ 959,300 | $ 950,339 | $ 978,667 | $ 951,411 | $ 951,948 |
| Federal Home Loan Bank advances | 15,000 | 32,500 | - | - | - |
| Federal funds and repurchase agreements | - | 207 | - | - | - |
| Subordinated debentures | 9,469 | 9,461 | 14,453 | 15,444 | 15,436 |
| Junior subordinated debentures | 10,310 | 10,310 | 10,310 | 10,310 | 10,310 |
| Reserve for unfunded commitments | 767 | 925 | 771 | 428 | 410 |
| Other liabilities | 13,498 | 12,560 | 11,972 | 11,755 | 12,866 |
| Total liabilities | 1,008,344 | 1,016,302 | 1,016,173 | 989,348 | 990,970 |
| 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 | (7,883) | (6,654) | (6,458) | (5,699) | (5,285) |
| Nonvested restricted stock | (2,359) | (2,536) | (2,566) | (2,340) | (2,444) |
| Additional paid-in capital | 56,931 | 56,708 | 56,408 | 55,789 | 55,763 |
| Retained earnings | 47,652 | 44,937 | 41,284 | 39,671 | 38,753 |
| Accumulated other comprehensive loss | (4,928) | (6,643) | (7,541) | (9,754) | (6,366) |
| Total shareholders' equity | 89,502 | 85,901 | 81,216 | 77,756 | 80,510 |
| Total liabilities and shareholders' equity | $ 1,097,846 | $ 1,102,203 | $ 1,097,389 | $ 1,067,104 | $ 1,071,480 |
First Reliance cash and cash equivalents totaled $31.8 million at September 30, 2025, compared to $33.6 million at June 30, 2025. Cash with the Federal Reserve Bank totaled $26.5 million compared to $61.6 million at September 30, 2024.
First Reliance does not have any Held-to-Maturity (HTM) securities for any reported period. All debt securities were classified as Available-For-Sale (AFS) securities with balances of $199.7 million and $194.1 million, at September 30, 2025 and June 30, 2025, respectively. The unrealized loss recorded on these securities totaled $6.5 million as of September 30, 2025, compared to $8.8 million at June 30, 2025, a decrease in the unrealized loss during the third quarter of $2.3 million (before taxes).
As of September 30, 2025, deposits increased by $9.0 million, or 3.8% annualized. During the third quarter, the bank reclassified certain interest-bearing transactional accounts (money market accounts) to non-interest-bearing demand deposit accounts. See the table on page 10 for detail.
The Company had $15.0 million in outstanding borrowings with the Federal Home Loan Bank (FHLB) of Atlanta at September 30, 2025, down from $32.5 million at June 30, 2025. The Company had remaining credit availability in excess of $304.9 million with the FHLB of Atlanta, subject to collateral requirements.
First Reliance also has access to approximately $23.1 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 | | |
| | Sep 30 | Jun 30 | Mar 31 | Dec 31 | Sep 30 |
| (shares in thousands) | 2025 | 2025 | 2025 | 2024 | 2024 |
| Voting common shares outstanding | 8,794 | 8,787 | 8,786 | 8,764 | 8,820 |
| Treasury shares outstanding | (954) | (830) | (809) | (731) | (751) |
| Total common shares outstanding | 7,840 | 7,957 | 7,977 | 8,033 | 8,069 |
| | | | | | |
| Book value per common share | $ 11.42 | $ 10.80 | $ 10.18 | $ 9.68 | $ 9.98 |
| Tangible book value per common | $ 11.33 | $ 10.71 | $ 10.09 | $ 9.59 | $ 9.89 |
| | | | | | |
| Stock price: | | | | | |
| High | $ 10.21 | $ 10.00 | $ 9.98 | $ 10.24 | $ 10.59 |
| Low | $ 9.36 | $ 9.00 | $ 9.35 | $ 9.16 | $ 7.60 |
| Period end | $ 10.10 | $ 9.60 | $ 9.45 | $ 9.59 | $ 10.14 |
| ASSET QUALITY MEASURES - Unaudited | |||||
| | |||||
| | As of | ||||
| | Sep 30 | Jun 30 | Mar 31 | Dec 31 | Sep 30 |
| ($ in thousands) | 2025 | 2025 | 2025 | 2024 | 2024 |
| Nonperforming Assets | | | | | |
| Commercial | | | | | |
| Owner occupied RE | $ 36 | $ 39 | $ 42 | $ 44 | $ 46 |
| Non-owner occupied RE | - | - | 655 | 646 | 701 |
| Construction | - | - | - | 66 | - |
| Commercial business | 38 | 43 | 146 | 328 | 57 |
| Consumer | | | | | |
| Real estate | 226 | 39 | 40 | 42 | 44 |
| Home equity | - | - | - | - | - |
| Construction | - | - | - | - | - |
| Other | 69 | 84 | 50 | 64 | 61 |
| Nonaccruing loan modifications | - | - | - | - | - |
| Total nonaccrual loans | $ 369 | $ 205 | $ 933 | $ 1,190 | $ 909 |
| Other assets repossessed | - | - | - | 11 | 15 |
| Total nonperforming assets | $ 369 | $ 205 | $ 933 | $ 1,201 | $ 924 |
| Nonperforming assets as a percentage of: | | | | | |
| Total assets | 0.03 % | 0.02 % | 0.09 % | 0.11 % | 0.09 % |
| Total loans receivable | 0.05 % | 0.03 % | 0.12 % | 0.16 % | 0.12 % |
| Accruing loan modifications | $ 683 | $ 797 | $ 369 | $ 400 | $ 428 |
| | | | | | |
| | Three Months Ended | ||||
| | Sep 30 | Jun 30 | Mar 31 | Dec 31 | Sep 30 |
| ($ in thousands) | 2025 | 2025 | 2025 | 2024 | 2024 |
| Allowance for Credit Losses | | | | | |
| Balance, beginning of period | $ 8,535 | $ 8,654 | $ 8,434 | $ 8,317 | $ 8,498 |
| Loans charged-off | 48 | 110 | 163 | 24 | 69 |
| Recoveries of loans previously charged-off | 6 | 57 | 19 | 18 | 17 |
| Net charge-offs | 42 | 53 | 144 | 6 | 52 |
| Provision for credit (recovery of) losses | 248 | (66) | 364 | 123 | (129) |
| Balance, end of period | $ 8,741 | $ 8,535 | $ 8,654 | $ 8,434 | $ 8,317 |
| Allowance for credit losses to gross loans | 1.12 % | 1.09 % | 1.10 % | 1.12 % | 1.13 % |
| Allowance for credit losses to nonaccrual loans | 2368.83 % | 4163.41 % | 927.54 % | 708.74 % | 914.96 % |
Asset quality remained strong during the third quarter of 2025, with nonperforming assets increasing to $369 thousand, which represents 0.03% of total assets. The allowance for credit losses as a percentage of total loans receivable increased to 1.12% at September 30, 2025, compared to 1.09% at June 30, 2025, and 1.12% at December 31, 2024. The allowance for credit losses increased by a provision for credit losses of $248 thousand and decreased by net charge-offs of $42 thousand, during the third quarter of 2025. In the third quarter of 2024, the Company experienced net charge-offs of $52 thousand and decreased the ACL with a release of the provision for credit losses of $129 thousand. The ACL was 1.13% of total loans at September 30, 2024.
Footnotes to table located at the end of this release.
| LOAN COMPOSITION - Unaudited | |||||
| | |||||
| | As of | ||||
| | Sep 30 | Jun 30 | Mar 31 | Dec 31 | Sep 30 |
| ($ in thousands) | 2025 | 2025 | 2025 | 2024 | 2024 |
| Commercial real estate | $ 471,002 | $ 483,278 | $ 482,201 | $ 463,301 | $ 456,775 |
| Consumer real estate | 220,767 | 223,310 | 216,964 | 204,303 | 193,362 |
| Commercial and industrial | 71,802 | 61,255 | 65,573 | 65,980 | 66,561 |
| Consumer and other | 16,426 | 16,906 | 19,731 | 20,154 | 22,521 |
| Total loans, net of deferred fees | 779,997 | 784,749 | 784,469 | 753,738 | 739,219 |
| Less allowance for credit losses | 8,741 | 8,535 | 8,654 | 8,434 | 8,317 |
| Total loans, net | $ 771,256 | $ 776,214 | $ 775,815 | $ 745,304 | $ 730,902 |
| DEPOSIT COMPOSITION - Unaudited | |||||
| | |||||
| | As of | ||||
| | Sep 30 | Jun 30 | Mar 31 | Dec 31 | Sep 30 |
| ($ in thousands) | 2025 | 2025 | 2025 | 2024 | 2024 |
| Noninterest-bearing | $ 292,107 | $ 219,352 | $ 224,031 | $ 227,471 | $ 219,279 |
| Interest-bearing: | | | | | |
| DDA and NOW accounts | 98,135 | 156,062 | 162,129 | 140,116 | 150,312 |
| Money market accounts | 360,621 | 379,078 | 393,736 | 381,602 | 362,834 |
| Savings | 38,279 | 38,995 | 39,719 | 40,627 | 41,184 |
| Time, less than $250,000 | 126,195 | 125,607 | 122,613 | 120,397 | 133,940 |
| Time, $250,000 and over | 43,963 | 31,245 | 36,439 | 41,198 | 44,399 |
| Total deposits | $ 959,300 | $ 950,339 | $ 978,667 | $ 951,411 | $ 951,948 |
| | |
| 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 $1.098 billion. The Company employs approximately 166 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.
