FLORENCE, S.C., July 19 /PRNewswire-FirstCall/ — First Reliance Bancshares, Inc., (OTC Bulletin Board: FSRL), the holding company for First Reliance Bank, today announced 2nd quarter 2006 unaudited pre-tax income of $1.2 million, an increase of $579,338, or 100%, compared to $588,073 reported the second quarter of 2005.
(Logo: http://www.newscom.com/cgi-bin/prnh/20041022/CLF051LOGO )
Unaudited net income increased 92%, to $822,916, as compared to $429,403 reported in the prior-year period. Earnings benefited from strong growth in both net interest income and non-interest income. Specifically, net interest income increased 26% to $4.4 million in the second quarter of 2006, while non- interest income increased by 60% to $1.3 million. Diluted earnings per share grew 77%, to $0.23, an increase of $0.10 from the $0.13 reported in the prior year period.
Net Income for the six months ended June 30, 2006 grew 71% to $1.4 million, or $0.39 per diluted share, compared to $815,002, or $0.24 per diluted share, for the second quarter of 2005. As was the case with the quarterly results, the higher profitability was driven primarily by higher net interest income, which increased 29%, and noninterest income, which increased 58%.
As of June 30, 2006, total assets were $433.1 million, an increase of $70.4 million or 19%, over the $362.8 million reported for June 30, 2005. Loans increased 15% to $349.0 million, funded primarily by growth in deposits. Deposits increased to $353.9 million, up 19% from $297 million reported the prior year period.
“These earnings give us the faith that our growth, while dramatic, is well balanced. I am equally as excited to report a record number of accounts were opened this quarter,” commented Rick Saunders, President & CEO. “Our Easy-To- Do-Business-With(TM) and There’s More to Banking Than Money(TM) banking initiatives and standards promise our customers a convenient and hassle-free banking experience. Much of our continued success in growth and profitability can be attributed to the increased focus on our retail strategy. Products and services offered under these initiatives include: Nationwide No Fee ATM network, Business Couriers and extended banking hours. Anyone who has visited our flagship branch after 7:00 pm on any given evening and witnessed the amount, and type, of activity, would not be surprised with this growth. This 8-8 The New Bankers’ Hours(TM) initiative has been so successful that we will introduce this in all locations in 2007.
“While we continue to grow households in our core services, we are more excited that our attrition rate has fallen to almost half of the national average. I believe that this is a direct result of our commitment of providing best-in-class customer service. This momentum, combined with forthcoming initiatives will continue to improve our customers’ experience. It is that experience which drives loyalty and leads to bottom line performance,” Saunders concluded.
Jeff Paolucci, Senior Vice President and Chief Financial Officer, commented, “Focusing on our vision to be ‘The largest and most profitable bank in South Carolina,’ our efforts continue to remain on expansion opportunities throughout the state. It is our standard and strategy to locate markets with the highest potential for growth and then place the best bankers in these locations. To achieve this goal, we have secured sites in Irmo, Lexington, and Charleston, where we anticipate building new branches that will offer our customers world class service through the latest in innovation and design. Our tremendous growth has also spurred the need for an additional operational facility in Florence, SC, scheduled to be completed by the end of the year.
“The positive gains realized in the 1st quarter continued throughout the 2nd quarter, as Low Cost/No Cost deposits grew by $3.3 million over the 1st quarter and these now represent 21% of total deposits. Total deposits for the 2nd quarter were $343.5 million, due much to our Totally Free Checking and Totally Free Business programs,” noted Paolucci.
The Company’s one bank subsidiary, First Reliance, has been recognized for its success, such as being the only bank ever to be named to The Top 25 Fastest Growing Companies(TM) in South Carolina three times including 2005 (ElliottDavis). First Reliance Bank operates in five locations with Totally FREE Checking, Totally FREE Business, FREE coin machines, 5 Way Mortgage Service Promises and 8-8 Extended Hours in their Florence location.
Based in Florence, South Carolina, First Reliance Bancshares, Inc., is a bank holding company with approximately $450 million in assets as of June 30, 2006. First Reliance Bank, which was opened in 1999, is the Company’s sole operating subsidiary. The bank has two branch locations and a Technology Center in Florence, SC. In addition, the bank’s aggressive statewide growth strategy includes current branches in Lexington, Mount Pleasant and downtown Charleston, SC. During the fourth quarter of 2005, the bank acquired its third Charleston branch site located at 2031 Sam Rittenberg Blvd. Charleston, SC. Additional branch expansions over the next 24 months include new sites located in North Charleston, the Midlands Region and the Upstate Region. The Company’s stock is traded on the OTC Bulletin Board under the symbol FSRL.OB. Information about the Company is available on our website at www.firstreliance.com.
This press release contains forward-looking statements, including information 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
Balance Sheet
June 30 June 30 December 31
2006 2005 2005
ASSETS (Unaudited) (Unaudited) (Audited)
Cash & Cash Equivalent
Cash & Due From Banks 10,072,241 2,953,765 7,264,897
Federal Funds Sold 12,671,000 22,442,000
Total Cash & Cash Equivalents $10,072,241$15,624,765$29,706,897
Investment Securities
Securities AFS 36,101,846 27,551,306 37,121,479
Non-marketable Equity Securities 2,473,850 2,128,350 1,745,850
Investment in Trust 310,000 - 310,000
Total Investment Securities $38,885,696 $29,679,656 $39,177,329
Loans Held For Sale $12,336,366 $1,778,172 $7,994,603
Loans Receivable 349,035,226 303,977,537 311,544,385
Less Allowance for Loan Losses (3,831,630) (3,310,741) (3,419,368)
Loans, Net $345,203,596 $300,666,796 $308,125,017
Premises, Furniture, & Equipment,
net 11,285,542 7,432,841 10,020,537
Accrued Interest Receivable 2,138,115 1,881,583 2,189,742
Other Real Estate Owned 1,166,985 180,533 345,550
Cash Surrender Value Life Insurance 9,910,831 3,682,057 3,752,165
Other Assets 2,133,385 1,850,244 1,726,044
Total Assets $433,132,757 $362,776,647 $403,037,884
LIABILITIES
Deposits
NIB Transaction Accounts 46,021,304 33,735,936 39,222,574
IB Transaction Accounts 25,316,061 20,508,017 29,437,107
Savings 89,859,516 69,700,582 79,663,175
Time Deposits $100,000 & Over 104,737,742 108,052,285 113,268,921
Other Time Deposits 87,949,894 64,787,211 72,845,121
Total Deposits $353,884,517 $296,784,031 $334,436,898
Securities Sold Under Agreements to
Repurchase 5,278,809 3,752,863 3,859,904
Fed Funds
Purchased 955,000
Advances from FHLB 29,800,000 32,000,000 23,500,000
Jr. Subordinated 10,310,000 - 10,310,000
Accrued Interest Payables 420,874 783,789 446,303
Other Liabilities 1,087,929 879,413 834,144
Total Liabilities $401,737,129 $334,200,096 $373,387,249
SHAREHOLDER'S EQUITY:
Common Stock, $0.01 per value;
20,000,000 shares authorized,
and 3,306,117 shares issued and
outstanding at June 30, 2006 and
December 31, 2005, respectively
Common Stock 34,064 32,767 33,061
Capital Surplus 24,984,291 23,866,450 24,127,329
Restricted Stock (83,456) - -
Retained Earnings 7,008,467 4,479,303 5,611,847
Accumulated Other Comprehensive
Income (547,738) 207,927 (111,706)
Pershing Treasury Stock - (9,896) (9,896)
Total Shareholder's Equity $31,395,628 $28,576,551 $29,650,635
TOTAL LIABILITIES & SHAREHOLDER'S
EQUITY $433,132,757 $362,776,647 $403,037,884
Income Statement
Six Months Ended Three Months Ended
June 30, June 30,
2006 2005 2006 2005
INTEREST INCOME
Loans & Fees 13,479,849 9,534,875 7,082,161 5,229,173
Investment Securities
Taxable 530,540 351,478 260,191 169,193
Tax-Exempt 314,908 253,621 162,507 127,650
Federal Funds Sold 275,795 76,400 97,924 71,071
Other Interest Income 59,153 36,900 33,135 23,217
Total Interest
Income $14,660,245 $10,253,274 $7,635,918 $5,620,304
INTEREST EXPENSE
Time Deposits over
$100,000 2,127,855 1,553,581 1,067,676 864,881
Other Deposits 3,372,780 1,613,977 1,828,021 964,852
Other Interest
Expense 773,699 566,378 362,979 311,741
Total Interest
Expense $6,274,334 $3,733,936 $3,258,676 $2,141,474
Net Interest Income $8,385,911 $6,519,338 $4,377,242 $3,478,830
Provision for Loan
Losses $(690,786) (566,152) (440,501) (393,600)
Net Interest Income
after Provision $7,695,125 $5,953,186 $3,936,741 $3,085,230
NON-INTEREST INCOME
Service Charges
on Deposit Accounts 774,587 674,447 410,208 345,842
Gain/(Loss) on
Sale of Mortgage
Loans 939,181 310,194 580,731 204,697
Brokerage Fees 59,775 69,896 28,310 38,894
Credit Life
Insurance
Commissions 10,608 15,277 4,179 7,616
Other Charges,
Commissions & Fees 125,874 245,797 66,108 130,017
Gain/(Loss) on
Sale of Securities AFS - - - -
Gain/(Loss) on
Sale of Other
Real Estate 17,657 (63,341) 17,657 (33,316)
Gain/(Loss) on
Sale of Fixed
Assets (13) 287 1 -
Other 263,554 133,852 145,574 87,149
Total $2,191,223 1,386,409 $1,252,768 $780,899
NON-INTEREST EXPENSE
Salaries & Benefits 4,499,706 3,578,170 2,259,071 1,872,090
Occupancy 561,588 382,071 272,602 223,676
Furniture & Equipment
Related 359,273 360,464 196,695 186,246
Other Operating 2,486,816 1,872,309 1,293,730 996,044
Total 7,907,383 6,193,014 $4,022,098 $3,278,056
Income Before Tax $1,978,965 $1,146,581 $1,167,411 $588,073
Income Tax Expense 582,346 331,579 344,495 158,670
Net Income $1,396,619 $815,002 $822,916 $429,403
Basic Earnings per
Share $0.41 $0.25 $0.24 $0.13
Diluted Earnings per
Share $0.39 $0.24 $0.23 $0.13
SOURCE First Reliance Bancshares, Inc.
