FLORENCE, S.C., July 18 /PRNewswire-FirstCall/ — First Reliance Bancshares, Inc., (OTC Bulletin Board: FSRL), the holding company for First Reliance Bank, today announced 2nd quarter 2008 unaudited net income of $683,421.
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Unaudited net income for the three months ended June 30, 2008 was $683,421, compared to $907,708 reported in the prior-year period. The decline in net income is attributable to the bank’s proactive decision to increase the allowance for loan and lease losses as a precautionary measure for any future economic uncertainties. Net interest income increased to $4.8 million in the second quarter of 2008 over $4.7 million reported the prior year period, while non-interest income was $1.4 million. Diluted earnings per share were $0.24, compared to the $0.26 reported in the prior year period.
Unaudited net income for the six months ended June 30, 2008 was $1.5 million, or $0.43 per diluted share, compared to $1.6 million, or $0.45 per diluted share, for the six months ended June 30, 2007. Net interest income increased to $9.8 million in the six months ended June 30, 2008, over $9.1 million reported the prior year period, while non-interest income was $2.7 million.
As of June 30, 2008, total assets were $585.2 million, an increase of $75.6 million or 14.85%, over the $509.5 million reported for June 30, 2007. Loans increased 15.19% to $460.7 million, funded primarily by growth in deposits. Deposits increased to $456.3 million, up 7.42% from $424.8 million reported the prior year period.
“I am pleased to report solid second quarter results, despite the ongoing challenges of the current economic environment,” commented Rick Saunders, President and CEO of First Reliance Bank. “While market conditions are challenging, our asset quality is strong and continues to improve. Nonperforming loans continue to decline, due largely to our proactive and aggressive risk management systems and emphasis on credit quality. To maintain this positive trend and to manage any future nonperforming assets or charge-offs, we continue to aggressively fund our loan loss reserve. During the second quarter of 2008, we expensed an additional $645,794 to the allowance for loan losses.”
“In this difficult economic environment, we have focused on maintaining adequate levels of liquidity and capital while closely monitoring and controlling expenses. Despite our growth, noninterest expense remains controlled and is relatively unchanged from the prior year period. Our liquidity remains strong, non performing loans continue to improve, and our capital levels continue to exceed ‘well capitalized’ regulatory standards.”
“Although some financial institutions may be negatively impacted by the recent collapse of the sub-prime mortgage loan market, First Reliance Bank does not make sub-prime mortgage loans and has no exposure in this area. We are a financially sound community bank specializing in relationship banking with individuals and businesses in the communities we serve.”
“We will continue to take great strides to further enhance our commitment to be Easy To Do Business With (TM). During the fourth quarter of 2008 we will further expand the franchise by opening a new branch in West Columbia. Additional 2009 expansion efforts include a branch on Forest Drive in Columbia, SC. We feel we are well positioned to provide our existing and new customers with top quality bank services and products.”
“Throughout 2008, we will continue to focus on growing core deposits and leveraging customer loyalty ratings, while improving our operating efficiencies and managing operating expenses. As we continue to diligently maintain disciplined risk and credit management practices, I am confident that we will continue to attain consistent and sustainable growth.”
About First Reliance Bank
First Reliance Bank, founded in 1999, is ranked in the top 20 banks in South Carolina based on asset size. The bank has assets of approximately $585 million, and employs over 145 highly talented associates. The bank serves the Upstate, Midlands, Piedmont, Low Country, Grand Strand, and Pee Dee regions of South Carolina. The bank has been recognized for its success including being named to the Dave Thomas Foundation’s List of “Best Adoption-Friendly Workplaces” and the only company ever to be named to The Top 25 Fastest Growing Companies(TM) in South Carolina four times including 2002, 2004, 2005, and 2006 (SC Chamber/Elliott Davis). In June 2007, the bank was added to the Palmetto 25, a list of S.C.’s largest publicly held companies. In 2006 and 2007, the bank was also recognized as One of the Best Places to Work in South Carolina by the SC Chamber of Commerce. First Reliance Bank offers Totally FREE Checking, Totally FREE Business, FREE Coin Machines, a Nationwide NO FEE ATM Network, and a 5 Way Mortgage Service Promise. It also offers 8-8 Extended Hours in all of their Florence, Mt. Pleasant, and Lexington locations and is open on most traditional bank holidays. Its Easy to Do Business With(TM) standard has earned the young bank a customer satisfaction rating of 94.7% (Performance Solutions-December 2007-Audited). First Reliance Bank is traded as FSRL.OB.
This press release contains forward-looking statements about branch openings within the meaning of the Securities Litigation Reform Act of 1995. Forward-looking statements give our expectations or forecasts of future events.
Any or all of our forward-looking statements here or in other publications may turn out to be incorrect. They can be affected by inaccurate assumptions or by known or unknown risks and uncertainties. Many such factors will be important in determining our actual future results. Consequently, no forward- looking statements can be guaranteed. Our actual results may vary materially, and there are no guarantees about the performance of our stock.
We undertake no obligation to correct or update any forward-looking statements, whether as a result of new information, future results or otherwise. You are advised, however, to consult any future disclosures we make on related subjects in our reports to the SEC.
Contact Jeffrey A. Paolucci, Senior Vice President and Chief Financial Officer, (843) 674-3250
First Reliance Bancshares, Inc.
Consolidated Reports of Income
Six Six Three Three
Months Months Months Months
Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
2008 2007 2008 2007
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Interest Income
Loans and Fees 17,660,316 16,510,892 8,560,841 8,618,219
Investment Securities
Taxable 675,964 446,076 329,580 211,742
Tax exempt 655,492 352,957 327,882 182,816
Federal funds sold 11,840 336,410 9,947 257,751
Other interest income 113,964 87,880 62,674 47,575
Total 19,117,576 17,734,215 9,290,924 9,318,103
Interest Expense
Time deposits $100,000
and over 4,032,916 3,152,637 1,995,863 1,760,167
Other deposits 3,405,068 4,604,489 1,502,973 2,416,821
Other interest expense 1,884,358 923,937 964,838 476,644
Total 9,322,342 8,681,063 4,463,674 4,653,632
Net Interest Income 9,795,234 9,053,152 4,827,250 4,664,471
Provision for loan losses (1,147,397) (460,436) (645,794) (325,202)
Net Interest Income after
provision 8,647,837 8,592,716 4,181,456 4,339,269
Noninterest Income
Service charges on
deposit accounts 929,852 908,437 492,717 465,767
Gain on sale of mortgage
loans 1,126,357 1,116,131 566,973 645,889
Brokerage fees 106,557 85,869 56,227 45,009
Income from Bank Owned
Life Insurance 229,565 201,050 107,811 100,310
Other charges, commissions
and fees 238,095 167,394 88,879 89,632
Gain on sale of
securities available for
sale - 5,996 - 4,975
Gain on sale of other
real estate (35,944) 20,374 - 11,009
Gain on sale of fixed
assets - 16,104 - 1,689
Other 100,869 95,556 50,950 59,446
Total 2,695,351 2,616,911 1,363,557 1,423,726
Noninterest Expense
Salaries and benefits 5,753,376 5,227,430 2,808,625 2,631,655
Occupancy 731,432 655,892 391,729 318,496
Furniture and equipment
related 422,490 419,763 209,531 229,102
Other operating 2,518,831 2,688,958 1,281,848 1,307,548
Total 9,426,129 8,992,043 4,691,733 4,486,801
Income before tax 1,917,059 2,217,584 853,280 1,276,194
Income tax expense (407,515) (602,669) (169,859) (368,486)
Net Income 1,509,544 1,614,915 683,421 907,708
Basic earnings per share 0.43 0.47 0.24 0.26
Diluted earnings per share 0.43 0.45 0.24 0.26
First Reliance Bancshares, Inc.
Balance Sheet
June 30 June 30 December 31
2008 2007 2007
(Unaudited) (Unaudited) Audited
Assets:
Cash and Cash Equivalents
Cash and Due From Banks 6,777,796 7,996,670 7,164,650
Federal funds sold 6,015,000 23,601,000 -
Total cash and cash equivalents 12,792,796 31,597,670 7,164,650
Investment securities
Securities available for sale 55,125,216 34,412,589 58,580,313
Nonmarketable equity securities 4,372,200 1,995,400 3,930,400
Investment in trust 310,000 310,000 310,000
Total investment securities 59,807,416 36,717,989 62,820,713
Loans held for sale 10,447,997 6,472,908 19,600,850
Loans receivable 466,428,206 404,386,897 468,137,690
Less allowance for loan losses (5,740,860) (4,458,077) (5,270,607)
Loans, net 460,687,346 399,928,820 462,867,083
Premises, furniture, and equipment,
net 23,678,331 17,862,726 22,233,746
Accrued interest receivable 2,712,271 2,421,681 3,092,767
Other real estate owned 473,550 855,599 196,950
Cash surrender value life insurance 10,769,838 10,335,086 10,540,273
Other assets 3,782,858 3,321,054 3,187,180
Total Assets 585,152,402 509,513,533 591,704,212
Liabilities:
Deposits:
Noninterest bearing transaction
accounts 47,008,751 45,156,803 43,542,528
Interest bearing transaction
accounts 28,321,944 38,442,293 39,450,393
Savings 82,073,717 77,475,956 85,819,481
Time deposits $100,000 and over 179,899,406 147,175,381 169,825,252
Other time deposits 118,971,469 116,503,199 110,860,061
Total deposits 456,275,287 424,753,632 449,497,715
Securities sold under agreements to
repurchase 6,421,356 11,130,839 7,927,754
Federal Funds Purchased - - 13,359,000
Advances from Federal Home Loan
Bank 68,500,000 26,000,000 69,000,000
Note Payable 3,000,000 - 3,000,000
Junior subordinated debentures 10,310,000 10,310,000 10,310,000
Accrued interest payable 596,016 780,407 767,577
Other liabilities 2,396,273 821,573 814,262
Total Liabilities 547,498,932 473,796,451 554,676,308
Shareholders' Equity:
Common Stock 35,135 34,845 34,946
Capital Surplus 26,050,718 25,776,153 25,875,012
Restricted Stock (237,078) (142,528) (152,762)
Retained Earnings 12,722,917 10,472,670 11,417,275
Accumulated other comprehensive
income (764,722) (424,058) (1,369)
Treasury Stock (153,500) - (145,198)
Total Shareholders Equity 37,653,470 35,717,082 37,027,904
Total Liabilities and Shareholders
Equity 585,152,402 509,513,533 591,704,212
SOURCE First Reliance Bancshares, Inc.
Contact: Jeffrey A. Paolucci, Senior Vice President and Chief Financial Officer, +1-843-674-3250
