FLORENCE, S.C., Oct. 17 /PRNewswire-FirstCall/ — First Reliance Bancshares, Inc., (OTC Bulletin Board: FSRL), the holding company for First Reliance Bank, today announced 3rd quarter 2006 unaudited pre-tax income of $1.3 million, an increase of $581,511, or 83%, compared to $696,754 reported the third quarter of 2005.
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Unaudited net income for the three months ended September 30, 2006 increased 76%, to $865,196, as compared to $490,428 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 22% to $4.5 million in the third quarter of 2006, while non-interest income increased by 55% to $1.2 million. Basic earnings per share grew 95%, to $0.25, an increase of $0.12 from the $0.13 reported in the prior year period.
Net Income for the nine months ended September 30, 2006 grew 73% to $2.3 million, or $0.65 per diluted share, compared to $1.3 million, or $0.24 per diluted share, for the third quarter of 2005. As was the case with the quarterly results, the higher profitability was driven primarily by higher net interest income, which increased to 26% to $11.8 million, and noninterest income, which increased 67% to 3.4 million.
As of September 30, 2006, total assets were $448.6 million, an increase of $64.5 million or 17%, over the $384.1 million reported for September 30, 2005. Loans increased 17% to $356.1 million, funded primarily by growth in deposits. Deposits increased to $373.4 million, up 20% from $312.4 million reported the prior year period.
“First Reliance Bank generated strong results for the 3rd quarter of 2006, and I am excited to report our tremendous growth in earnings and revenues, as well as our record number of loans and deposits,” said Rick Saunders, President and CEO. “This strong and well balanced growth was driven by the focus on our Easy-To-Do-Business-With(TM) and There’s More to Banking Than Money(TM) banking initiatives and fundamentals. These standards, along with our NO FEE ATMS and our extended banking hours create a convenient banking experience for our customers. Our ongoing advances in service excellence and innovation have led to a record number of accounts opened this quarter and a continuous growth in services per household.”
“First Reliance remains committed to our customers, community, and employees. Our efforts in providing employee excellence and satisfaction were recently rewarded when our employees, in a statewide survey, rated our bank as a great place to work. Results of the survey earned our bank recognition as one of the Top 15 Best Places to Work in South Carolina (Chamber of Commerce),” commented Saunders. “We are also excited to announce that we have been recognized as one of The Top 25 Fastest Growing Companies(TM) in South Carolina for 2006. 2006 marks the fourth year that we have received this honor. Much of our success would not have been possible without the hard work and dedication of each and every one of our employees.”
“Although the banking industry is constantly faced with many challenges, I am certain and optimistic that our positive trends in growth and acquisition will position us to meet and exceed our strategic goals for the year,” commented Jeff Paolucci, Senior Vice President and CFO. “First Reliance Bank generated record growth in revenue and earnings. We are excited about extending our brand to customers throughout South Carolina as we continue to focus our efforts on expansion opportunities. Our tremendous growth has spurred the need for not only an additional operational facility, but new branches in Irmo, Lexington, and Charleston.”
“The positive gains realized in the 2nd quarter continued throughout the 3rd quarter, as Low Cost/No Cost deposits increased to $65.6 million, a $6.5 million increase over the $59.1 million reported the prior year period quarter. Low Cost/No Cost deposits now represent 18% of total deposits. Total deposits for the 3rd quarter were $373.4 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 including being the only bank ever to be named to The Top 25 Fastest Growing Companies(TM) in South Carolina four times including 2006 (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 September 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 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
Income Statement
Nine Months Ended Three Months Ended
September 30, September 30,
2006 2005 2006 2005
INTEREST INCOME
Loans & Fees 21,274,745 15,246,458 7,794,896 5,711,583
Investment
Securities
Taxable 782,599 529,973 252,059 178,495
Tax-Exempt 477,460 400,923 162,552 147,302
Federal Funds Sold 514,916 240,234 239,121 163,834
Other Interest Income 95,303 63,844 36,150 26,944
Total Interest
Income $23,145,023 $16,481,432 $8,484,778 $6,228,158
INTEREST EXPENSE
Time Deposits over
$100,000 3,395,663 2,487,182 1,267,808 933,601
Other Deposits 5,560,118 2,772,156 2,187,338 1,158,179
Other Interest
Expense 1,256,653 983,802 482,954 417,424
Total Interest
Expense $10,212,434 $6,243,140 $3,938,100 $2,509,204
Net Interest
Income $12,932,589 $10,238,292 $4,546,678 $3,718,954
Provision for
Loan Losses ($1,167,991) (1,016,545) (477,205) (450,393)
Net Interest
Income after
Provision $11,764,598 $9,221,747 $4,069,473 $3,268,561
NON-INTEREST INCOME
Service Charges on
Deposit Accounts 1,225,798 1,020,408 451,211 345,961
Gain/(Loss) on Sale
of Mortgage Loans 1,445,891 571,297 506,710 262,308
Brokerage Fees 97,226 122,294 37,451 52,398
Credit Life Insurance
Commissions 19,365 22,598 8,757 7,321
Other Charges,
Commissions & Fees 192,873 148,478 66,999 51,693
Gain/(Loss) on Sale
of Securities AFS - - - -
Gain/(Loss) on Sale
of Other Real Estate 23,529 (66,815) 5,872 (3,474)
Gain/(Loss) on Sale
of Fixed Assets (13) (287) - -
Other 419,451 229,373 155,897 80,361
Total $3,424,120 2,047,346 $1,232,897 $796,568
NON-INTEREST EXPENSE
Salaries &
Benefits 6,872,949 5,486,807 2,373,243 1,908,637
Occupancy 844,153 642,838 282,565 260,767
Furniture &
Equipment
Related 512,991 523,862 153,718 163,398
Other Operating 3,701,395 2,772,251 1,214,579 1,035,573
Total 11,931,488 9,425,758 $4,024,105 $3,368,375
Income Before Tax $3,257,230 $1,843,335 $1,278,265 $696,754
Income Tax Expense 995,415 537,905 413,069 206,326
Net Income $2,261,815 $1,305,430 $865,196 $490,428
Basic Earnings
per Share $0.67 $0.25 $ 0.25 $ 0.13
Diluted Earnings
per Share $0.65 $0.24 $ 0.25 $ 0.13
Balance Sheet
September 30 September 30 December 31
2006 2005 2005
ASSETS (Unaudited) (Unaudited) (Audited)
Cash & Cash Equivalent
Cash & Due From Banks 4,921,941 7,422,370 7,264,897
Federal Funds Sold 11,061,000 18,057,000 22,442,000
Total Cash & Cash
Equivalents $15,982,941 $25,479,370 $29,706,897
Investment Securities
Securities AFS 36,073,452 32,183,744 37,121,479
Non-marketable Equity
Securities 2,136,350 1,925,850 1,745,850
Investment in Trust 310,000 310,000 310,000
Total Investment
Securities $38,519,802 $34,419,594 $39,177,329
Loans Held For Sale $9,580,370 $5,734,851 $7,994,603
Loans Receivable 360,080,594 306,521,359 311,544,385
Less Allowance for
Loan Losses (3,961,005) (3,372,891) (3,419,368)
Loans, Net $356,119,589 $303,148,468 $308,125,017
Premises, Furniture,
& Equipment, net 11,928,161 7,540,764 10,020,537
Accrued Interest
Receivable 2,263,822 1,758,883 2,189,742
Other Real Estate Owned 1,610,985 340,350 345,550
Cash Surrender Value
Life Insurance 10,026,407 3,717,417 3,752,165
Other Assets 2,563,360 1,994,888 1,726,044
Total Assets $448,595,437 $384,134,585 $403,037,884
LIABILITIES
Deposits
NIB Transaction Accounts 40,988,616 37,648,488 39,222,574
IB Transaction Accounts 30,442,146 22,786,963 29,437,107
Savings 82,545,388 78,137,005 79,663,175
Time Deposits $100,000
& Over 117,579,499 108,682,388 113,268,921
Other Time Deposits 101,807,719 65,157,163 72,845,121
Total Deposits $373,363,368 $312,412,007 $334,436,898
Securities Sold Under
Agreements to Repurchase 7,457,270 3,375,260 3,859,904
Fed Funds Purchased - - -
Advances from FHLB 22,500,000 27,500,000 23,500,000
Jr. Subordinated 10,310,000 10,310,000 10,310,000
Accrued Interest Payables 700,496 461,804 446,303
Other Liabilities 1,264,356 1,056,065 834,144
Total Liabilities $415,595,490 $355,115,136 $373,387,249
SHAREHOLDER'S EQUITY:
Common Stock, $0.01 per
value; 20,000,000 shares
authorized, 3,409,259 and
3,306,117 shares issued
and outstanding at
September 30, 2006 and
December 31, 2005,
respectively
Common Stock 34,161 32,819 33,061
Capital Surplus 25,126,679 23,934,071 24,127,329
Restricted Stock (74,979) - -
Retained Earnings 7,873,379 4,969,731 5,611,847
Accumulated Other
Comprehensive Income 40,707 92,724 (111,706)
Pershing Treasury Stock - (9,896) (9,896)
Total Shareholder's
Equity $32,999,947 $29,019,449 $29,650,635
TOTAL LIABILITIES &
SHAREHOLDER'S EQUITY $448,595,437 $384,134,585 $403,037,884
SOURCE First Reliance Bancshares, Inc.
Contact: Jeffrey A. Paolucci, Senior Vice President and Chief Financial Officer of First Reliance Bank, +1-843-674-3250, or jpaolucci@firstreliance.com
