First Reliance Reports Record 2nd Quarter 2020 Net Income Of $3.9 Million And Completes $5.5 Million Subordinated Debt Issuance - First Reliance Bancshares (OTC:FSRL)

FLORENCE, S.C., July 27, 2020 /PRNewswire/ -- First Reliance Bancshares, Inc. FSRL, the holding company for First Reliance Bank (collectively, "Company" or the "Company"), today announced its financial results for the three-month period ended June 30, 2020.

2020 Second Quarter Highlights

Pre-tax pre-provision earnings of $6.3 million, a 255.8% increase over Q2 2019;
Net income for Q2 2020 improved to $3.9 million, a 195.5% increase over Q2 2019;
Diluted EPS improved to $0.49 per common share, a 206.3% increase over Q2 2019;
Tangible book value increased 13.6% over Q2 2019 to $7.34;
Total risk-based capital improved 213 basis points to 13.31% for Q2 2020, compared to 11.18% for Q2 2019;
Total assets increased 20.2% to $763 million at Q2 2020, compared to $635 million at Q2 2019;
Cost of funds decreased 49 basis points to 0.63% at Q2 2020, compared to 1.12% for Q2 2019;
Transaction deposits to total deposits increased to 49.6% at Q2 2020, compared to 38.2% at Q2 2019;
Completed $5.5 million subordinated debt issuance June 2020 with funds retained at the holding company;
Net interest margin decreased to 3.55% (decreased to 3.73% excluding PPP loans) for Q2 2020, compared to 4.05% for Q2 2019;
Provision expense totaled $1.2 million for Q2 2020 compared to $169 thousand for Q2 2019;
Total loan deferrals outstanding as of Q2 2020 totaled $14.7 million or 2.9% of total loans;
Asset quality continued to be strong, with nonperforming assets to average assets at 0.21% and past due ratio at 0.34% at Q2 2020;
Consolidated Charleston market offices and Charlotte market offices;
Opened Stratford Road branch office in Winston Salem, North Carolina in Q2 2020; and
Record mortgage revenues of $8.1 million for Q2 2020 compared to $1.8 million for Q2 2019.

"We are extremely pleased to report that First Reliance achieved record-setting net income of $3.9 million, or $0.49 per diluted common share, for the three months ended June 30, 2020. Our financial performance in Q2 2020 positions the Company to continue its successful financial performance from 2019," Rick Saunders, President and CEO of First Reliance said. "This is the best quarter in the Company's 21-year history, showing excellent loan growth, increased capital levels, higher liquidity levels, and record-setting mortgage volumes.

"During Q2 2020, First Reliance recognized record mortgage revenues of $8.1 million compared to $1.8 million during the same period one year ago. Additionally, we completed the issuance of $5.5 million of subordinated debt to be held at the holding company, with no immediate plans to inject into the Bank. We have strategically slowed loan growth, focusing on diversifying our revenue streams, growing our core deposit base, and eliminating unnecessary expenses.

"The conditions surrounding COVID-19 and the corresponding economic outlook remain uncertain. While there is much unknown about the economic impact of the pandemic, our Company has reacted by crafting effective response plans and also preparing our balance sheet and our resources for an uncertain future. In order to aid our many business customers in their time of financial hardship, we modified or deferred payments on 414 loans up to 60 days, totaling $82.2 million during Q2 2020. As of June 30, 2020, total loan deferrals had reduced to $14.7 million on 44 loans, which included $12 million on 21 loans on their second deferral.

"In order to protect our customers and employees during the COVID-19 Pandemic, we again moved to drive-through only on July 17, 2020. We continue to serve our customers through other channels or in person when requested. In order to protect against economic uncertainty as related to the COVID-19 pandemic, we have performed stress testing on our loan portfolio, as well as capital and liquidity needs. Results indicated no material exposure to industries with an elevated risk to Covid-19 within our loan portfolio.

"We are proud to have worked throughout the pandemic to meet everyday banking needs, to provide the emergency relief needs of our customers and communities, and to protect our bank as much as possible against economic downturn. We are thankful for the continuing support shown by our customers, communities, and our shareholders."

Payroll Protection Program ("PPP")

During the quarter, the Company was a participating lender in the Small Business Administration ("SBA") Payroll Protection Program created under the Coronavirus Aid, Relief, and Economic Security Act. The Company directly originated 186 PPP loans totaling $30.2 million. Gross origination fees from the PPP loans that we originated are currently expected to total $1.1 million, based on our current expectations with respect to the eligibility of such PPP loans to qualify for loan forgiveness. During the quarter, the Company recognized $94 thousand of the $1.1 million in estimated fees by originating PPP loans, with the remaining balance expected to be recognized over the next several quarters.

Financial Summary

	Quarter Ended
	June 30	March 31	December 31	September 30	June 30
	2020	2020	2019	2019	2019
Earnings ($ in thousands, except per share data):
Net income available to common shareholders	$ 3,901	858	599	1,507	1,320
Earnings per common share, diluted	0.49	0.11	0.07	0.19	0.16
Total revenue⁽¹⁾	13,241	7,542	7,502	8,631	8,328
Net interest margin	3.55%	4.09%	3.96%	3.86%	4.05%
Return on average assets⁽²⁾	2.12%	0.54%	0.37%	0.94%	0.86%
Return on average equity⁽²⁾	26.20%	5.89%	4.20%	10.85%	9.79%
Efficiency ratio⁽³⁾	54.40%	80.25%	83.11%	72.94%	79.02%
Balance Sheet($ in thousands):
Total assets	$ 762,647	660,886	661,612	657,533	634,749
Total loans⁽⁴⁾	512,384	480,573	480,183	473,466	475,769
Total deposits	582,361	506,225	505,088	508,885	527,763
Total transaction deposits ⁽⁵⁾to total deposits	49.62%	49.06%	44.84%	40.06%	38.19%
Loans to deposits	87.98%	94.93%	95.07%	93.04%	90.15%
Bank Capital Ratios:
Total risk-based capital ratio	13.31%	12.45%	11.54%	11.13%	11.18%
Tier 1 risk-based capital ratio	12.48%	11.75%	10.88%	10.53%	10.56%
Tier 1 Leverage ratio	9.68%	10.29%	9.23%	9.11%	9.19%
Common equity tier 1 ratio⁽⁶⁾	12.48%	11.75%	10.88%	10.53%	10.56%
Asset Quality Ratios:
Nonperforming assets as a percentage of total assets	0.21%	0.26%	0.28%	0.29%	0.33%
Allowance for loan losses as a percentage of loans⁽⁴⁾	0.92%	0.81%	0.74%	0.69%	0.68%
Allowance for loan losses as a percentage of nonaccrual loans	332.75%	291.94%	240.47%	187.59%	164.58%

Footnotes to table located on page 10.

INCOME STATEMENTS – Unaudited

	Quarter Ended					Six Months Ended
	June 30	Mar 31	Dec 31	Sept 30	June 30	June 30
(in thousands, except per share data)	2020	2020	2019	2019	2019	2020	2019
Interest income
Loans	$ 6,556	$ 6,568	6,760	6,688	6,603	13,124	12,741
Investment securities	299	323	327	327	347	622	682
Other interest income	41	90	91	68	82	131	170
Total interest income	6,896	6,981	7,178	7,083	7,032	13,877	13,593
Interest expense
Deposits	652	828	1,043	1,259	1,226	1,480	2,333
Other interest expense	371	336	397	337	276	707	588
Total interest expense	1,023	1,164	1,440	1,596	1,502	2,187	2,921
Net interest income	5,873	5,817	5,738	5,487	5,530	11,690	10,672
Provision for loan losses	1,175	375	470	209	169	1,550	296
Net interest income after provision for loan losses	4,698	5,442	5,268	5,278	5,361	10,140	10,376
Noninterest income
Mortgage banking income	8,062	4,274	1,798	2,301	1,800	12,336	2,996
Mortgage servicing rights valuation adjustment	(1,429)	(3,512)	(1,127)	(180)	-	(4,941)	(195)
Service fees on deposit accounts	242	463	447	438	399	705	797
Debit Card and other service charges, commissions, and fee:	429	315	408	382	387	744	758
Income from bank owned life insurance	102	103	96	96	97	205	192
Gain on sale of securities, net	(211)	(9)	1	1	3	(220)	36
Other income	173	91	141	106	112	264	210
Total noninterest income	7,368	1,725	1,764	3,144	2,798	9,093	4,794
Noninterest expense
Compensation and benefits	4,395	3,583	3,718	3,819	4,074	7,978	7,831
Occupancy	619	612	603	602	582	1,231	1,171
Furniture and equipment related expenses	585	537	435	440	475	1,122	947
Electronic Data Processing	200	194	190	252	267	394	484
Professional Fees	329	267	377	438	284	596	480
Marketing	56	77	84	71	77	133	150
Other	774	783	838	672	803	1,557	1,644
Merger Related Expenses	-	-	-	-	-	-	37
Total noninterest expenses	6,958	6,053	6,245	6,294	6,562	13,011	12,744
Income before provision for income taxes	5,108	1,114	787	2,128	1,597	6,222	2,426
Income tax expense	1,207	256	188	621	277	1,463	444
Net income available to common shareholders	$ 3,901	$ 858	599	1,507	1,320	4,759	1,982

Weighted Average Shares - Basic	7,915	7,901	7,903	7,946	7,959	7,908	7,955
Weighted Average Shares - Diluted	7,998	8,014	8,047	8,077	8,071	8,010	8,065
Basic income per common share	$ 0.49	$ 0.11	$ 0.08	$ 0.19	$ 0.17	$ 0.60	$ 0.25
Diluted income per common share	$ 0.49	$ 0.11	$ 0.07	$ 0.19	$ 0.16	$ 0.59	$ 0.25

Net income for the three months ended June 30, 2020 was $3.9 million, or $0.49 per diluted common share, compared to $1.3 million, or $0.16 per diluted common share, for the three months ended June 30, 2019. Net Income for the six months ended June 30, 2020 totaled $4.8 million, or $0.59 per diluted common share, compared to $2.0 million, or $0.25 per diluted common share for the six months ended June 20, 2019.

Noninterest income for the three-months ended June 30, 2020 was $7.4 million, a $4.6 million increase from $2.8 million for the same period one-year ago. Noninterest income is largely driven by the Company's mortgage banking division. In the second quarter of 2020, mortgage production volumes reached $223 million as compared with $76 million for the same period one-year ago. The mortgage pipeline remains robust and the Company is projecting volumes for Q3 2020 slightly lower but modestly consistent with second quarter 2020 volumes. "As mortgage rates reached all-time record lows, we saw unprecedented mortgage volume throughout our markets in the second quarter of 2020. Our mortgage team is working tirelessly to support the demand and help our customers with refinancing their homes, renovations, or new home purchases," said CEO Saunders.

Noninterest expense increased by $396 thousand or 6%, for the second quarter of 2020 compared to the same period one-year ago. The increase in noninterest expense is attributed to higher mortgage division expenses of $565 thousand over the same period one year ago which contributed to the $4.6 million increase in noninterest income during the second quarter 2020. Expense control continues to be in the forefront of the Company's strategic efforts and measures are being implemented where feasible. During the second quarter 2020, the Company consolidated its Charleston market offices and Charlotte market offices to gain operating efficiencies with continued focus building an infrastructure to support future growth when the pandemic subsides.

NET INTEREST INCOME AND MARGIN – Unaudited

	For the 3 Months Ended
	June 30, 2020			March 31, 2020			December 31, 2019			June 30 2019
	Average	Income/	Yield/	Average	Income/	Yield/	Average	Income/	Yield/	Average	Income/	Yield/
(dollars in thousands)	Balance	Expense	Rate	Balance	Expense	Rate	Balance	Expense	Rate	Balance	Expense	Rate
Interest-earning assets
Federal funds sold and interest-bearing deposits	$50,290	$12	0.09%	$19,487	$57	1.17%	$19,876	$71	1.42%	$15,902	$65	1.63%
Investment securities	41,189	300	2.91%	45,175	323	2.86%	46,413	327	2.82%	49,496	347	2.81%
Nonmarketable equity securities	4,089	29	2.85%	2,119	33	6.15%	2,179	20	3.75%	916	17	7.62%
Loans⁽⁸⁾	565,422	6,555	4.64%	501,507	6,568	5.24%	511,005	6,760	5.29%	480,724	6,603	5.49%
Total interest-earning assets	660,990	6,896	4.17%	568,288	6,981	4.91%	579,473	7,178	4.95%	547,038	7,032	5.14%
Allowance for loan losses	(4,085)			(3,584)			(3,216)			(2,933)
Noninterest-earning assets	77,900			73,621			73,050			72,065
Total assets	$734,805			$638,325			$649,307			$616,170
Interest-bearing liabilities
NOW accounts	$103,652	$15	0.06%	$95,462	$11	0.05%	$86,535	$11	0.05%	$ 82,390	$9	0.05%
Savings & money market	127,968	104	0.33%	119,672	116	0.39%	121,712	132	0.43%	90,104	126	0.56%
Time deposits	151,414	533	1.41%	148,721	701	1.89%	170,875	900	2.11%	194,874	1,091	2.23%
Total interest-bearing deposits	383,034	652	0.68%	363,855	828	0.91%	379,122	1,043	1.10%	367,368	1,226	1.33%
FHLB advances and other borrowings	87,523	182	0.83%	50,935	252	1.98%	56,290	312	2.22%	23,166	76	1.32%
Subordinated debentures	16,942	189	4.45%	15,309	84	2.20%	15,310	85	2.22%	15,310	200	5.21%
Total interest-bearing liabilities	487,499	1,023	0.84%	430,099	1,164	1.08%	450,722	1,440	1.28%	405,844	1,502	1.48%
Noninterest bearing deposits	176,688			140,338			131,282			120,530
Other Liabilities	11,057			9,603			10,235			35,857
Shareholders' equity	59,561			58,285			57,068			53,938
Total liabilities and shareholders' equity	$734,805			$638,325			$649,307			$616,169

Net interest income (tax equivalent) / interest rate spread		$5,873	3.33%		$5,817	3.83%		$5,738	3.67%		$5,530	3.66%
Net Interest Margin			3.55%			4.09%			3.96%			4.05%

					Footnotes to table located on page 10.

Net interest income increased $339 thousand, or 6.2%, to $5.9 million for the three months ended June 30, 2020 compared to $5.5 million for the three months ended June 30, 2019. The increase in net interest income resulted primarily from the growth in our loan portfolio, a significant increase in noninterest bearing deposits, and lower cost deposit balances. The Company continues to reduce its cost of funds which declined to 0.63% as of June 30, 2020 from 1.12% for the same period one year ago. Transaction deposits increased by $87.3 million, to $288.9 million for the second quarter 2020 from $201.5 million one year ago and were aided in part by deposit growth as a result of participating in the Paycheck Protection Program. Despite the growth in net interest income, the net interest margin for the three months ended June 30, 2020 decreased 50 basis points (and decreased 32 basis points excluding PPP loans) to 3.55% from 4.05% for the three months ended June 30, 2019, due primarily from the origination of lower yielding Paycheck Protection Program loans and realizing a full quarterly impact of the 150 basis point decrease in interest rates by the Federal Reserve on variable rate loans. While a low rate environment for an extended period of time will exert margin pressure, the Company has actively managed the balance sheet to minimize the impact on earnings. The Company intentionally reduced its exposure to higher cost deposits and focused on building relationships and growing deposits through core checking account acquisition. Transaction accounts (see footnote No. 5) to total deposits increased to a record high 49.6% for the three-months ended June 30, 2020 compared to 39.2% for the same period one-year ago. The Company continues to experience double-digit growth in commercial deposit accounts and treasury services. Customers are doing more business overall and seem to like the Company's brand of banking, as reflected in the strong services per household number of 5.8.

Balance Sheets – Unaudited

	Ending Balance
	June 30	March 31	December 31	September 30	June 30
($ in thousands, except per share data)	2020	2020	2019	2019	2019
Assets
Cash and cash equivalents:
Cash and due from banks	$ 4,952	$ 16,869	12,945	5,342	5,084
Interest-bearing deposits with banks	78,554	18,922	27,649	21,786	11,926
Total cash and cash equivalents	83,506	35,791	40,594	27,128	17,010
Investment securities:
Investment securities available for sale	28,237	34,842	35,715	36,186	37,464
Investment securities held to maturity	9,318	9,767	10,417	10,801	11,423
Other investments	4,264	2,989	2,423	2,423	948
Total investment securities	41,819	47,598	48,555	49,410	49,835
Mortgage loans held for sale	57,329	34,042	27,901	41,959	27,226
Loans ⁽⁴⁾	512,384	480,573	480,183	473,466	475,769
Less allowance for loan losses	(4,715)	(3,877)	(3,547)	(3,251)	(3,211)
Loans, net	507,669	476,696	476,636	470,215	472,558
Property and equipment, net	20,523	20,528	19,967	20,016	20,133
Mortgage servicing rights	9,698	8,421	11,023	11,247	10,308
Bank owned life insurance	17,898	17,796	17,692	17,596	17,499
Deferred income taxes	5,068	6,156	6,581	6,728	7,293
Other assets	19,137	13,858	12,663	13,234	12,887
Total assets	$ 762,647	$ 660,886	661,612	657,533	634,749
Liabilities
Deposits	$ 582,361	$ 506,225	505,088	508,885	527,763
Federal Home Loan Bank advances	85,000	55,000	43,300	43,300	6,600
Federal funds and repurchase agreements	2,464	16,530	31,137	23,122	18,162
Subordinated debentures	10,358	4,835	4,881	4,838	4,900
Junior subordinated debentures	10,310	10,310	10,310	10,310	10,310
Other liabilities	9,814	9,971	9,811	10,626	11,854
Total liabilities	700,307	602,871	604,527	601,081	579,589
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	81	81	80	80	80
Non-Voting Common Stock, $.01 par value; 430,000 shares authorized	4	4	4	4	4
Treasury stock, at cost	(1,478)	(1,402)	(1,283)	(1,227)	(864)
Nonvested restricted stock	(1,748)	(1,757)	(1,254)	(1,010)	(1,427)
Additional paid-in capital	51,822	51,652	51,137	50,777	51,137
Accumulated other comprehensive income (loss)	806	606	308	334	243
Retained earnings	12,852	8,830	8,092	7,493	5,986
Total shareholders' equity	62,340	58,015	57,085	56,452	55,160
Total liabilities and shareholders' equity	$ 762,647	$ 660,886	661,612	657,533	634,749
Common Stock
Tangible book value per common share ⁽⁷⁾	$ 7.34	$ 6.83	6.76	6.71	6.46
Stock price:
High	5.50	7.82	7.90	8.00	7.29
Low	4.93	5.50	7.60	7.02	7.00
Period end	5.07	5.50	7.82	7.90	7.15
Common shares outstanding	8,130	8,103	8,034	7,990	8,039
Non-voting common shares outstanding	410	410	410	410	410
Treasury shares outstanding	200	187	184	177	116

Total assets increased 20.2% to $763 million at June 30, 2020, compared to $635 million at June 30, 2019. Total loans grew by $36 million, or 7.7%, to $512 million at June 30, 2020, compared to $476 million for the same period one-year ago due to primarily Paycheck Protection Program loan originations, organic loan growth in our commercial, 1-4 family mortgage and consumer loan portfolios.

CEO Saunders said, "We are one of the very few community banks strategically positioned for growth in the premier markets in the Carolinas. Because of this potential, our long history and our strong culture, we have attracted new talent from other financial institutions as we aim to take advantage of current market disruptions."

"As our North Carolina presence has grown, we relocated and expanded the Winston-Salem office into a full service branch site in May to position the Company for future growth in the Winston-Salem market. We are also actively looking for branch sites in the Lake Norman and other fast growing markets in the Charlotte MSA. With developing economic uncertainty, current and future market expansion plans will be evaluated prudently." For example, we have moved breaking ground for a new Myrtle Beach branch – Grissom Parkway out a little further into the near future as we continue to monitor the impact COVID-19 has on the economy.

ASSET QUALITY MEASURES - Unaudited

Our asset quality continued to be strong through June 30, 2020, with nonperforming assets declining by $489 thousand to $1.6 million at June 30, 2020 compared to the same date one-year ago. The ratio of nonperforming assets to total assets declined to 0.21% at June 30, 2020, a decrease of 12 basis points compared to June 30, 2019. OREO and repossessed assets remain nominal. The allowance for loan losses as a percentage of loans improved to 0.92% at June 30, 2020 (adjusted for purchase accounting marks on acquired loans), compared to 0.68% one year earlier due primarily to provisioning associated with the anticipated economic impact of the COVID-19 pandemic. "While we have not seen increased delinquencies or any direct impact of COVID-19 to our asset quality, we believe it is prudent to reflect this pandemic in our allowance models. During Q2 2020, we made provisions for loan losses totaling $1.2 million compared to $169 thousand for the same period one year ago. Year to date through June 30, 2020, the Company has funded $1.6 million in provisions for loan losses compared to $296 thousand during the six months of 2019. We are actively performing stress tests on our loan portfolio, monitoring the political and regulatory landscape, and also monitoring COVID-19 hotspots and the impact it may have on the markets we serve. The Company continues to actively monitor loan deferral levels which have declined to $14.7 million or less than 3% of the loan portfolio as of the end of the second quarter 2020 and there has not been any unusual or unforeseen credit line drawdowns to date and no increase in overdraft activity. The Company has minimal exposure to any industry that may have an elevated exposure to Covid-19", said CEO Saunders. Net charge offs remain nominal.

	June 30	March 31	December 31	September 30	June 30
(dollars in thousands)	2020	2020	2019	2019	2019
Nonperforming Assets
Commercial
Owner occupied RE	$ 999	$ 507	518	529	97
Non-owner occupied RE	-	-	-	-	-
Construction	-	-	-	-	-
Commercial business	135	12	39	112	693
Consumer
Real estate	10	526	591	597	725
Home equity	-	-	-	183	180
Construction	-	-	-	-	-
Other	273	283	327	312	256
Nonaccruing troubled debt restructurings
Total nonaccrual loans	$ 1,417	$ 1,328	1,475	1,733	1,951
Other real estate owned	209	392	347	164	164
Total nonperforming assets	$ 1,626	$ 1,720	1,822	1,897	2,115
Nonperforming assets as a percentage of:
Total assets	0.21%	0.26%	0.28%	0.29%	0.33%
Total loans	0.32%	0.36%	0.38%	0.40%	0.54%
Accruing troubled debt restructurings	$ 2,620	$ 3,502	3,584	3,119	2,630

	Quarter Ended
	June 30	March 31	December 31	September 30	June 30
(dollars in thousands)	2020	2020	2019	2019	2019
Allowance for Loan Losses
Balance, beginning of period	$ 3,877	$ 3,547	3,251	3,211	3,231
Loans charged-off	452	168	222	247	221
Recoveries of loans previously charged-off	115	123	48	78	32
Net loans charged-off	337	45	174	169	189
Provision for loan losses	1,175	375	470	209	169
Balance, end of period	$ 4,715	$ 3,877	3,547	3,251	3,211
Allowance for loan losses to gross loans	0.92%	0.81%	0.74%	0.69%	0.68%
Allowance for loan losses to nonaccrual loans	332.75%	291.94%	240.47%	187.59%	164.58%
Net charge-offs to average loans QTD (annualized)	0.24%	0.04%	0.14%	0.13%	0.16%

LOAN COMPOSITION – Unaudited

	Quarter Ended
	June 30	March 31	December 31	September 30	June 30
(dollars in thousands)	2020	2020	2019	2019	2019
Commercial
Owner occupied RE	$ 113,205	$ 115,711	116,244	109,133	109,329
Non-owner occupied RE	70,748	69,474	59,287	63,304	60,313
Construction	35,029	29,523	33,196	30,123	27,503
Business	62,464	63,522	61,129	57,573	60,783
PPP	30,211
Total commercial loans	311,657	278,230	269,856	260,133	257,928
Consumer
Real Estate	99,565	97,465	99,394	101,742	104,309
Home equity	21,895	21,362	21,987	21,472	21,309
Construction	5,496	5,708	5,062	4,915	4,971
Other	73,771	77,808	83,884	85,204	87,252
Total consumer loans	200,727	202,343	210,327	213,333	217,841
Total gross loans, net of deferred fees	512,384	480,573	480,183	473,466	475,769
Less-allowance for loan losses	4,715	3,877	3,547	3,251	3,211

DEPOSIT COMPOSITION – Unaudited

	Quarter Ended
	June 30	March 31	December 31	September 30	June 30
(dollars in thousands)	2020	2020	2019	2019	2019
Non-interest bearing	$ 185,208	$ 144,359	137,312	123,839	117,862
Interest bearing:
NOW accounts	103,732	104,003	89,169	80,017	83,695
Money market accounts	101,083	94,778	94,742	95,775	91,082
Savings	34,392	26,270	25,730	25,876	26,409
Time, less than $250,000	120,782	104,841	121,818	142,662	164,939
Time and out-of-market deposits, $250,000 and over	37,164	31,974	36,317	40,716	43,776
Total Deposits	$ 582,361	$ 506,225	505,088	508,885	527,763

Footnotes to tables:

(1)	Total revenue is the sum of net interest income and noninterest income.
(2)	Annualized for the respective three-month period.
(3)	Noninterest expense divided by the sum of net interest income and noninterest income annualized for respective three-month period.
(4)	Excludes mortgage loans held for sale.
(5)	Includes noninterest bearing and interest bearing NOW accounts.
(6)	The common equity tier 1 ratio is calculated as the sum of common equity divided by risk-weighted assets.
(7)	The tangible book value per share is calculated as total shareholders' equity less intangible assets, divided by period end dilutive shares.
(8)	Includes mortgage loans held for sale.

ABOUT FIRST RELIANCE BANCSHARES

Founded in 1999, First Reliance Bancshares, Inc. FSRL, is based in Florence, South Carolina and has assets of approximately $763 million. The Company employs more than 150 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 93% customer satisfaction rating well above the bank industry average of 81%. First Reliance is also one of three companies throughout South Carolina to receive the Best Places To Work in South Carolina award all 15 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. In addition to offering a full range of personalized community banking products and services for individuals, small businesses, and corporations, First Reliance offers two unique community-customers programs, which include: Hometown Heroes, a package of benefits for those serving our communities and Check N Save, an outreach program for the unbanked or under-banked. We also offer a full suite of digital banking services, a Customer Service Guaranty, a Mortgage Service Guaranty, and are open on most traditional holidays.

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 loan losses; (3) the rate of delinquencies and amounts of charge-offs, the level of allowance for loan 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:
Jeffrey A. Paolucci, EVP & CFO
(888) 543-5510
jpaolucci@firstreliance.com

SOURCE First Reliance Bancshares, Inc.

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