First Reliance Reports Record 3rd Quarter 2020 Net Income Of $4.5 Million - First Reliance Bancshares (OTC:FSRL)

FLORENCE, S.C., Oct. 28, 2020 /PRNewswire/ -- First Reliance Bancshares, Inc. FSRL, the holding company for First Reliance Bank (collectively, "First Reliance" or the "Company"), today announced its financial results for the three-month period ended September 30, 2020.

2020 Third Quarter Highlights

Pre-tax, pre-provision Q3 2020 earnings of $6.9 million, a 193.4% increase over Q3 2019;
Pre-tax, pre-provision earnings for the nine-month period ended September 30, 2020 of $14.6 million, a 437.4% increase over the same period of 2019;
Net income for Q3 2020 improved to $4.5 million, a 196.5% increase over Q3 2019;
Diluted EPS for Q3 2020 improved to $0.56 per common share, a 194.7% increase over Q3 2019;
Net income for the nine-month period ended Q3 2020 totaled $9.2 million, or $1.15 per diluted common share, compared to $2.0 million, or $0.25 per diluted common share for the same nine-month period of 2019;
Tangible book value increased 18.5% over Q3 2019 to $7.95;
Total risk-based capital improved 362 basis points to 14.75% at Q3 2020, compared to 11.13% at Q3 2019;
Total assets increased 18.9% to $782 million at Q3 2020, compared to $658 million at Q3 2019;
Cost of funds decreased 60 basis points to 0.54% for Q3 2020 compared to 1.14% for Q3 2019;
Cost of funds percentile ranking of all banks in the U.S. improved to 34% at September 30, 2020, compared to 65% one year ago SP;
Total loan deferrals outstanding at Q3 2020 totaled $7.8 million, or 1.6% of total loans;
Transaction deposits to total deposits increased to 47.3% at Q3 2020 compared to 40.06% at Q3 2019;
Net interest margin remained flat at 3.86% compared to Q3 2019, however improved 31 basis points from Q2 2020;
Provision expense totaled $1 million for Q3 2020 compared to $209 thousand for Q3 2019;
Total deposits increased 17.1% to $596 million at Q3 2020 compared to $509 million at Q3 2019;
Total deposits increased $13.1 million at $596 million for Q3 2020 compared to $582 million for Q2 2020;
Asset quality continues to be strong, with nonperforming assets to average assets at 0.19% and past due ratio at 0.37% at Q3 2020; and
Strong mortgage revenues of $7.5 million for Q3 2020 compared to $2.3 million for Q3 2019

"We are extremely pleased to report that First Reliance again has achieved record-setting revenues with a net income of $4.5 million, or $0.56 per diluted common share, for the three-month period ended September 30, 2020. This achievement in Q3 2020 positions the Company to continue its successful financial performance through the balance of 2020," Rick Saunders, President and CEO, said. "I am proud to announce that this quarter supplants last quarter as best in the Company's 21-year history, showing excellent loan growth, increased capital levels, higher liquidity levels, and record-setting mortgage volumes."

Mr. Saunders continued, "During Q3 2020, First Reliance recognized mortgage revenues of $7.5 million compared to $2.3 million during the same period one year ago. Given the strong performance and income, the Company has taken the opportunity to fortify the overall balance sheet, as reflected in the increase in capital levels and liquidity position. In addition, the Company has taken this period to acquire key talent and to enhance its infrastructure and Information Technology department. We have strategically slowed loan growth to counter the potential negative implications of COVID, focusing on diversifying our revenue streams, growing our core deposit base, and eliminating unnecessary expenses. As COVID concerns diminish and with our Company operating within eight distinct markets throughout North and South Carolina, we stand ready to take advantage of market disruptions brought on by bank consolidations. We expanded our Lake Norman loan production office in North Carolina into a full service branch at the end of August in order to serve the growing needs of this market. Additionally, we are exploring expansion within the next few months into the downtown Columbia, South Carolina market, an area well-positioned for growth."

First Reliance Bank's commitment to making their customers' lives better has resulted in a 93% customer satisfaction score in a 2020 independent customer survey. The rating is 13 points higher than the average national bank satisfaction score of 80% and 10 points higher than the average for community banks of 83% according to the 2019 American Customer Satisfaction Index. Additionally, the Company has been named a "Best Places to Work in South Carolina" for the 15^th consecutive year. In the "Best Places To Work" survey, the bank's associate engagement score increased to 95% up from 90% in 2019 and a remarkable 23 points above the average engagement score for a company. "We are especially excited to achieve these three benchmarks even through the COVID pandemic," said Mr. Saunders.

Payroll Protection Program Participation

During Q2 and Q3 2020, the Company was a participating lender in the Small Business Administration ("SBA") Payroll Protection Program ("PPP") created under the Coronavirus Aid, Relief, and Economic Security Act. The Company directly originated 186 PPP loans totaling $30.2 million. As regulations and guidance for PPP loans and the forgiveness process continued to change and evolve, management recognized the operational risk and complexity associated with this portfolio and decided to pursue the sale of the PPP loan portfolio to a third party better suited to support and serve our PPP customers through the loan forgiveness process. This loan sale will allow our team to focus on serving our customers and proactively monitor and address potential credit risk brought on by the pandemic. On August 28, 2020, we completed the sale of our PPP loan portfolio to The Loan Source, Inc., together with its servicing partner ACAP SME LLC, and immediately recognized SBA lender fee income of $504 thousand, net of sale and processing costs.

COVID-19 Response

The conditions surrounding COVID-19 and the corresponding economic outlook continue to remain uncertain. While there is much unknown about the economic impact of the pandemic, First Reliance 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 with no additional new modifications or deferments in Q3 2020. As of September 30, 2020, total loan deferrals had fallen to $7.8 million on seven loans, all on their second deferral, totaling 1.6% of total loans outstanding.

In order to protect our customers and employees during the COVID-19 pandemic, we again moved to drive-through only service 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 arising from 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 continue to monitor the COVID-19 pandemic trends and anticipate reopening our lobbies sometime in Q4 2020 unless changes occur in our markets.

First Reliance hosted a roundtable discussion in July to talk about the South Carolina banking community's support of small businesses during the COVID-19 pandemic. Congressman Tom Rice (SC-7) and Fred Green, President and CEO of the S.C. Bankers Association, led the panel of 13 small business owners in the Florence area. The discussion focused on the experience of each business applying for PPP funds and the role the loan had in helping their businesses survive as non-essential businesses were mandated to close.

"We are committed to supporting our customers and feel it's important to connect them with our congressional leaders so that they have an opportunity to discuss the impact of the Paycheck Protection Program and the ongoing challenges they face with their businesses during these unprecedented times," said Mr. Saunders.

Financial Summary

	Quarter Ended
	Sept 30	June 30	Mar 31	Dec 31	Sept 30
	2020	2020	2020	2019	2019
Earnings ($ in thousands, except per share data):
Net income available to common shareholders	$ 4,468	$ 3,901	$ 858	599	1,507
Earnings per common share, diluted	0.56	0.49	0.11	0.08	0.19
Total revenue⁽¹⁾	14,820	13,241	7,542	7,502	8,641
Net interest margin	3.86%	3.55%	4.09%	3.96%	3.86%
Return on average assets⁽²⁾	2.31%	2.12%	0.54%	0.37%	0.94%
Return on average equity⁽²⁾	27.73%	26.20%	5.89%	4.20%	10.85%
Efficiency ratio⁽³⁾	54.28%	54.40%	81.15%	84.09%	73.93%
Balance Sheet($ in thousands):
Total assets	$ 781,655	$ 762,647	$ 660,886	661,612	657,533
Total loans⁽⁴⁾	478,745	512,384	480,573	480,183	473,466
Total deposits	595,767	582,361	506,225	505,088	508,885
Total transaction deposits ⁽⁵⁾to total deposits	47.30%	49.62%	49.06%	44.84%	40.06%
Loans to deposits	80.36%	87.98%	94.93%	95.07%	93.04%
Bank Capital Ratios:
Total risk-based capital ratio	14.75%	13.31%	12.45%	11.54%	11.13%
Tier 1 risk-based capital ratio	13.72%	12.48%	11.75%	10.88%	10.53%
Tier 1 Leverage ratio	9.96%	9.68%	10.29%	9.23%	9.11%
Common equity tier 1 ratio⁽⁶⁾	13.72%	12.48%	11.75%	10.88%	10.53%
Asset Quality Ratios:
Nonperforming assets as a percentage of total assets	0.19%	0.21%	0.26%	0.28%	0.29%
Allowance for loan losses as a percentage of loans⁽⁴⁾	1.20%	0.92%	0.81%	0.74%	0.69%
Allowance for loan losses as a percentage of nonaccrual loans	426.94%	332.75%	291.94%	240.47%	187.59%

Footnotes to table located on page 9.

INCOME STATEMENTS – Unaudited

	Sept 30	Jun 30	Mar 31	Dec 31	Sept 30	September 30
(in thousands, except per share data)	2020	2020	2020	2019	2019	2020	2019
Interest income
Loans	$ 7,403	$ 6,556	$ 6,568	6,760	6,688	20,527	12,741
Investment securities	218	299	323	327	327	840	682
Other interest income	67	41	90	91	68	198	170
Total interest income	7,688	6,896	6,981	7,178	7,083	21,565	13,593
Interest expense
Deposits	519	652	828	1,043	1,250	1,999	2,333
Other interest expense	400	371	336	397	336	1,107	588
Total interest expense	919	1,023	1,164	1,440	1,586	3,106	2,921
Net interest income	6,769	5,873	5,817	5,738	5,497	18,459	10,672
Provision for loan losses	1,000	1,175	375	470	209	2,550	296
Net interest income after provision for loan losses	5,769	4,698	5,442	5,268	5,288	15,909	10,376
Noninterest income
Mortgage banking income	7,494	8,062	4,274	1,798	2,301	19,830	2,996
Mortgage servicing rights valuation adjustment	(379)	(1,429)	(3,512)	(1,127)	(180)	(5,320)	(195)
Service fees on deposit accounts	290	242	463	447	438	995	797
Debit Card and other service charges, commissions, and fee:	426	429	315	408	382	1,170	758
Income from bank owned life insurance	103	102	103	96	96	308	192
Gain on sale of securities, net	-	(211)	(9)	1	1	(220)	36
Other income	117	173	91	141	106	381	210
Total noninterest income	8,051	7,368	1,725	1,764	3,144	17,144	4,794
Noninterest expense
Compensation and benefits	4,892	4,395	3,583	3,718	3,819	12,870	7,831
Occupancy	628	619	612	603	602	1,859	1,171
Furniture and equipment related expenses	572	585	537	435	440	1,694	947
Electronic Data Processing	231	200	194	190	252	625	484
Professional Fees	230	329	267	377	438	826	480
Marketing	122	56	77	84	71	255	150
Other	1,288	774	783	838	682	2,845	1,644
Merger Related Expenses	-	-	-	-	-	-	37
Total noninterest expenses	7,963	6,958	6,053	6,245	6,304	20,974	12,744
Income before provision for income taxes	5,857	5,108	1,114	787	2,128	12,079	2,426
Income tax expense	1,389	1,207	256	188	621	2,852	444
Net income available to common shareholders	$ 4,468	$ 3,901	$ 858	599	1,507	9,227	1,982

Weighted Average Shares - Basic	7,929	7,915	7,901	7,903	7,946	7,915	7,955
Weighted Average Shares - Diluted	8,015	7,998	8,014	8,047	8,077	8,012	8,065
Basic income per common share	$ 0.56	$ 0.49	$ 0.11	$ 0.08	$ 0.19	$ 1.17	$ 0.25
Diluted income per common share	$ 0.56	$ 0.49	$ 0.11	$ 0.07	$ 0.19	$ 1.15	$ 0.25

Net income for the three-month period ended September 30, 2020 was $4.5 million, or $0.56 per diluted common share, compared to $1.5 million, or $0.19 per diluted common share, for the same three-month period ended September 30, 2019. Net income for the nine-month period ended September 30, 2020 totaled $9.2 million, or $1.15 per diluted common share, compared to $2.0 million, or $0.25 per diluted common share for the same nine-month period ended September 30, 2019.

Noninterest income for the three-month period ended September 30, 2020 was $8.1 million, a $4.9 million increase from $3.1 million for the same period one-year ago. Noninterest income is largely driven by the Company's mortgage banking division. In Q3 2020, mortgage production volumes reached $204 million as compared with $121 million for the same period one-year ago. "Given the ongoing housing market recovery and low rate environment, both purchase and refinance applications remain robust compared to one-year ago. The Company is projecting volumes for Q4 2020 to be 20% lower than the highs of Q2 and Q3 of 2020," said Mr. Saunders.

Noninterest expense increased by $1.6 million or 26%, for the third quarter of 2020 compared to the same period one-year ago. The increase in noninterest expense is attributed to higher mortgage division expenses of $525 thousand over the same period one year ago which contributed to the $4.9 million increase in noninterest income during the third quarter 2020. Additionally, included in other expenses is the $455 thousand one-time expense associated with the sale of the PPP loan portfolio.

NET INTEREST INCOME AND MARGIN – Unaudited

For the 3 Months Ended
	September 30, 2020			June 30, 2020			December 31, 2019			September 30, 2020
	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	$110,453	$23	0.08%	$50,290	$12	0.09%	$19,876	$71	1.42%	$14,402	$54	1.49%
Investment securities	36,389	218	2.40%	41,189	300	2.91%	46,413	327	2.82%	47,940	326	2.72%
Nonmarketable equity securities	4,039	44	4.38%	4,089	29	2.85%	2,179	20	3.75%	1,347	15	4.32%
Loans⁽⁸⁾	550,838	7,403	5.38%	565,422	6,555	4.64%	511,005	6,760	5.29%	505,271	6,688	5.29%
Total interest-earning assets	701,719	7,688	4.38%	660,990	6,896	4.17%	579,473	7,178	4.95%	568,960	7,083	4.98%
Allowance for loan losses	(5,027)			(4,085)			(3,216)			(2,679)
Noninterest-earning assets	76,978			77,900			73,050			71,957
Total assets	$773,670			$734,805			$649,307			$638,238
Interest-bearing liabilities
NOW accounts	$107,936	$13	0.05%	$103,652	$15	0.06%	$86,535	$11	0.05%	$ 80,290	$9	0.05%
Savings & money market	144,333	80	0.22%	127,968	104	0.33%	121,712	132	0.43%	95,220	137	0.57%
Time deposits	161,090	426	1.06%	151,414	533	1.41%	170,875	900	2.11%	198,480	1,104	2.22%
Total interest-bearing deposits	413,359	519	0.50%	383,034	652	0.68%	379,122	1,043	1.10%	373,990	1,250	1.34%
FHLB advances and other borrowings	85,383	176	0.82%	87,523	182	0.83%	56,290	312	2.22%	35,644	141	1.58%
Subordinated debentures	20,810	224	4.31%	16,942	189	4.45%	15,310	85	2.22%	15,310	195	5.11%
Total interest-bearing liabilities	519,552	919	0.71%	487,499	1,023	0.84%	450,722	1,440	1.28%	424,944	1,586	1.49%
Noninterest bearing deposits	179,196			176,688			131,282			120,912
Other Liabilities	10,474			11,057			10,235			36,798
Shareholders' equity	64,448			59,561			57,068			55,584
Total liabilities and shareholders' equity	$773,670			$734,805			$649,307			$638,238

Net interest income (tax equivalent) / interest rate spread		$6,769	3.67%		$5,873	3.33%		$5,738	3.67%		$5,497	3.49%
Net Interest Margin			3.86%			3.55%			3.96%			3.86%

Footnotes to table located on page 9.

Net interest income increased $1.3 million, or 23.1%, to $6.8 million for the three-month period ended September 30, 2020 compared to $5.5 million for the three-month period ended September 30, 2019. The increase in net interest income resulted primarily from the growth in our loan portfolio, recognition of loan fees totaling $959 thousand associated with the sale of the PPP 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 0.54% as of September 30, 2020 from 1.14% for the same period one year ago. Transaction deposits increased by $77.9 million, to $281.8 million at September 30, 2020 from $203.9 million one year ago and were aided in part by deposit growth as a result of participating in the PPP. The net interest margin for the three-month period ended September 30, 2020 remained flat at 3.86% compared to the same period one year ago. However, the net interest margin improved 31 basis points to 3.86% for three-month period ended September 30 2020 compared to the previous quarter-ended June 2020, due in part from the recognition of loan fees and lower average balances within the loan portfolio associated with the sale of PPP portfolio loans and continued reduction of funding costs. "We are optimistic that our net interest margin has stabilized and may increase in the near term as asset yields are remaining constant with anticipated improvement in our funding costs over next quarters. Our percentile ranking for cost of funds within all banks in the U.S. improved to 34% at Q3 2020 compared to 65% one year ago SP," said Mr. Saunders.

Balance Sheets – Unaudited

	Ending Balance
	Sept 30	Jun 30	March 31	Dec 31	Sept 30
($ in thousands, except per share data)	2020	2020	2020	2019	2019
Assets
Cash and cash equivalents:
Cash and due from banks	$ 5,133	$ 4,952	$ 16,869	12,945	5,342
Interest-bearing deposits with banks	134,848	78,554	18,922	27,649	21,786
Total cash and cash equivalents	139,981	83,506	35,791	40,594	27,128
Investment securities:
Investment securities available for sale	35,567	28,237	34,842	35,715	36,186
Investment securities held to maturity	-	9,318	9,767	10,417	10,801
Other investments	3,839	4,264	2,989	2,423	2,423
Total investment securities	39,406	41,819	47,598	48,555	49,410
Mortgage loans held for sale	57,853	57,329	34,042	27,901	41,959
Loans ⁽⁴⁾	478,745	512,384	480,573	480,183	473,466
Less allowance for loan losses	(5,721)	(4,715)	(3,877)	(3,547)	(3,251)
Loans, net	473,024	507,669	476,696	476,636	470,215
Property and equipment, net	20,548	20,523	20,528	19,967	20,016
Mortgage servicing rights	11,000	9,698	8,421	11,023	11,247
Bank owned life insurance	18,001	17,898	17,796	17,692	17,596
Deferred income taxes	3,872	5,068	6,156	6,581	6,728
Other assets	17,970	19,137	13,858	12,663	13,234
Total assets	$ 781,655	$ 762,647	$ 660,886	661,612	657,533
Liabilities
Deposits	$ 595,767	$ 582,361	$ 506,225	505,088	508,885
Federal Home Loan Bank advances	75,000	85,000	55,000	43,300	43,300
Federal funds and repurchase agreements	12,591	2,464	16,530	31,137	23,122
Subordinated debentures	10,427	10,358	4,835	4,881	4,838
Junior subordinated debentures	10,310	10,310	10,310	10,310	10,310
Other liabilities	10,178	9,814	9,971	9,811	10,626
Total liabilities	714,273	700,307	602,871	604,527	601,081
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	81	80	80
Non-Voting Common Stock, $.01 par value; 430,000 shares authorized	4	4	4	4	4
Treasury stock, at cost	(1,488)	(1,478)	(1,402)	(1,283)	(1,227)
Nonvested restricted stock	(1,577)	(1,748)	(1,757)	(1,254)	(1,010)
Additional paid-in capital	51,824	51,822	51,652	51,137	50,777
Accumulated other comprehensive income (loss)	1,217	806	606	308	334
Retained earnings	17,320	12,852	8,830	8,092	7,493
Total shareholders' equity	67,382	62,340	58,015	57,085	56,452
Total liabilities and shareholders' equity	$ 781,655	$ 762,647	$ 660,886	661,612	657,533
Common Stock
Tangible book value per common share ⁽⁷⁾	$ 7.95	$ 7.34	$ 6.83	6.76	6.71
Stock price:
High	6.05	5.50	7.82	7.90	8.00
Low	4.85	4.93	5.50	7.60	7.02
Period end	6.05	5.07	5.50	7.82	7.90
Common shares outstanding	8,129	8,130	8,103	8,034	7,990
Non-voting common shares outstanding	410	410	410	410	410
Treasury shares outstanding	202	200	187	184	177

ASSET QUALITY MEASURES - Unaudited

		Ending Balance
	Sept 30	June 30	March 31	Dec 31	Sept 30
(dollars in thousands)	2020	2020	2020	2019	2019
Nonperforming Assets
Commercial
Owner occupied RE	$ 87	$ 999	$ 507	518	529
Non-owner occupied RE	-	-	-	-	-
Construction	-	-	-	-	-
Commercial business	-	135	12	39	112
Consumer
Real estate	566	10	526	591	597
Home equity	9	-	-	-	183
Construction	-	-	-	-	-
Other	387	273	283	327	312
Nonaccruing troubled debt restructurings	291	-	-	-	-
Total nonaccrual loans	$ 1,340	$ 1,417	$ 1,328	1,475	1,733
Other real estate owned	164	209	392	347	164
Total nonperforming assets	$ 1,504	$ 1,626	$ 1,720	1,822	1,897
Nonperforming assets as a percentage of:
Total assets	0.19%	0.21%	0.26%	0.28%	0.29%
Total loans	0.31%	0.32%	0.36%	0.38%	0.40%
Accruing troubled debt restructurings	$ 2,508	$ 2,620	$ 3,502	3,584	3,119

		Quarter Ended
	Sept 30	June 30	March 31	Dec 31	Sept 30
(dollars in thousands)	2020	2020	2020	2019	2019
Allowance for Loan Losses
Balance, beginning of period	$ 4,715	$ 3,877	$ 3,547	3,251	3,211
Loans charged-off	76	452	168	222	247
Recoveries of loans previously charged-off	82	115	123	48	78
Net loans charged-off	6	337	45	174	169
Provision for loan losses	1,000	1,175	375	470	209
Balance, end of period	$ 5,721	$ 4,715	$ 3,877	3,547	3,251
Allowance for loan losses to gross loans	1.20%	0.92%	0.81%	0.74%	0.69%
Allowance for loan losses to nonaccrual loans	426.94%	332.75%	291.94%	240.47%	187.59%

Our asset quality continued to be strong through September 30, 2020, with nonperforming assets declining by $393 thousand to $1.5 million at September 30, 2020 compared to the same date one year ago. The ratio of nonperforming assets to total assets declined to 0.19% at September 30, 2020, a decrease of 10 basis points compared to September 30, 2019. OREO and repossessed assets remain nominal. The allowance for loan losses as a percentage of total loans improved to 1.2% at September 30, 2020 (adjusted for purchase accounting marks on acquired loans), compared to 0.69% 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 Q3 2020, we made provisions for loan losses totaling $1.0 million compared to $209 thousand for the same period one year ago. Year to date through September 30, 2020, the Company has funded $2.6 million in provisions for loan losses compared to $296 thousand during the nine 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 $7.8 million or 1.6% of the loan portfolio as of the end of the third 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 Mr. Saunders. Net charge offs remain nominal.

LOAN COMPOSITION – Unaudited

	Quarter Ended
	Sept 30	June 30	March 31	December 31	Sept 30
(dollars in thousands)	2020	2020	2020	2019	2019
Commercial
Owner occupied RE	$ 104,173	$ 113,205	$ 115,711	116,244	109,133
Non-owner occupied RE	79,838	70,748	69,474	59,287	63,304
Construction	35,579	35,029	29,523	33,196	30,123
Business	63,163	62,464	63,522	61,129	57,573
PPP	0	30,211
Total commercial loans	282,753	311,657	278,230	269,856	260,133
Consumer
Real Estate	97,904	99,565	97,465	99,394	101,742
Home equity	20,244	21,895	21,362	21,987	21,472
Construction	12,831	11,642	9,617	8,205	9,448
Other	65,013	67,625	73,899	80,741	80,671
Total consumer loans	195,992	200,727	202,343	210,327	213,333
Total gross loans, net of deferred fees	478,745	512,384	480,573	480,183	473,466
Less-allowance for loan losses	5,721	4,715	3,877	3,547	3,251
Total loans, net	$ 473,024	$ 507,669	476,696	476,636	470,215

DEPOSIT COMPOSITION – Unaudited

	Quarter Ended
	Sept 30	June 30	March 31	Dec 31	Sept 30
(dollars in thousands)	2020	2020	2020	2019	2019
Non-interest bearing	$ 173,628	$ 185,208	$ 144,359	137,312	123,839
Interest bearing:
NOW accounts	108,152	103,732	104,003	89,169	80,017
Money market accounts	113,203	101,083	94,778	94,742	95,775
Savings	41,549	34,392	26,270	25,730	25,876
Time, less than $250,000	122,139	120,782	104,841	121,818	142,662
Time and out-of-market deposits, $250,000 and over	37,096	37,164	31,974	36,317	40,716
Total Deposits	$ 595,767	$ 582,361	$ 506,225	505,088	508,885


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 outstanding common shares.
(8)	Includes mortgage loans held for sale.

ABOUT FIRST RELIANCE

Founded in 1999, First Reliance Bancshares, Inc. FSRL, is based in Florence, South Carolina and has assets of approximately $781 million. The Company employs more than 170 professionals and has locations throughout South Carolina and central North Carolina. First Reliance has redefined community banking with a commitment to making customers lives better, its founding principle. Customers of the company have given it a 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.

Market News and Data brought to you by Benzinga APIs