First Reliance Announces Strong 2nd Quarter Results

FLORENCE, S.C., July 31, 2015 /PRNewswire/ — First Reliance Bancshares, Inc. (OTC: FSRL) announced that it had net income of $7.0 million for the quarter ended June 30, 2015.  This compares to a net income of $372,331 for the quarter ended June 30, 2014.  The increase in net income is largely attributed to a deferred tax asset recapture of $6.9 million.  Additionally, the Company had one-time credit and mortgage charges of $585,000 during the quarter ended June 30, 2015.  Net income for six months ended June 30, 2015 was $7.5 million.  This compares to net income of $718,689 for the six months ended June 30, 2014.  Operating results were positively impacted by asset growth of $13 million since December 31, 2014 through robust retail and correspondent mortgage production and continued consumer loan and 1-4 family mortgage originations.

Net interest income increased $426,219, and totaled $7.0 million for the six months ended June 30, 2015, compared to $6.5 million for the six months ended June 31, 2014.  Interest income increased $207,277 while interest expense was reduced by $218,942.  The Company continues to benefit from increased loan volume and a declining cost of funds, which was 0.20% for the six months ended June 30, 2015 compared to 0.33% for the six months ended June 30, 2014.

Noninterest income increased $758,713, and totaled $2.9 million for the six month ended June 30, 2015 compared to $2.1 million for the six month ended June 30, 2014.  The increase in noninterest income is largely attributable to a year over year increase in gains on sales of mortgage loans of $762,513.

Noninterest expense levels increased $1.2 million, and totaled $9.2 million for the six months ended June 30, 2015 compared to $8.0 million for the comparable period of 2014.  Contributing to this increase were expenses associated with the expansion of our mortgage division totaling $873,324 as a result of adding approximately 20 new associates—a component of our ongoing strategic initiative to diversify sources of revenue.  As this business line grows, we expect noninterest income to be positively impacted.

Total assets increased $13 million or 3.53% to $381 million as of June 30, 2015, compared to $368 million as of December 31, 2014.

Loans and Mortgage Loans Held for Sale increased by $15.5 million or 6.0%, as of June 30, 2015 from $257.3 million as of December 31, 2014 largely due to continued growth in consumer indirect auto financing and 1-4 family mortgage loans.  We believe the indirect auto finance business line launched last year is strategically positioned for continued slow to moderate growth; primarily focused on high quality loan customers and transacting business only in the markets we currently are serving.  This business line has reached profitability and is now contributing positively to the bottom line.

No-Cost/Low Cost Deposits increased by $16.2 million, or 7.67%, to $227.7 million at June 30, 2015, from $211.5 million at December 31, 2014.  The Company continues to attract new customers through customer referrals, unique programs such as Hometown Heroes, Moms First and iMatter Programs.  Customers enjoy the Bank’s brand of banking focused on providing customers with an exceptional experience whether at a branch or using online and mobile banking services.

The Company continues to show improvement in asset quality.   The Company’s nonperforming assets totaled $7.6 million as of June 30, 2015, down substantially from $12.9 million as of June 30, 2014.  The ratio of nonperforming assets to total assets was 2.03% as of June 20, 2015 compared to 3.56% as of June 30, 2014.  The allowance for loan losses as a percentage of loans was 0.99% as of June 30, 2015, compared to 1.18% as of June 30, 2014.  For the six month ended June 30, 2015, provisions to the allowance for loan losses were minimal at $158,289.

Capital levels remain strong.  As of June 30, 2015, total shareholders equity increased $3.3 million since December 31, 2014.  In May 2015, the Company paid deferred dividends on TARP preferred stock totaling $4.2 million and deferred interest payments on outstanding trust preferred securities totaling $876,657.  Additionally, the Company recaptured $6.9 million in remaining deferred tax asset.  The Company’s tangible book value per share increased to $5.04 as of June 30, 2015 from $4.46 per share as of March 31, 2015.

“First Reliance Bank continues to show steady growth in both deposits and loans,” says Rick Saunders, President and CEO. “The bank continues to be well capitalized and in excess of regulatory requirements, and has strong liquidity,” he adds.

“We continue to grow our consumer lending platform and diversify our revenue stream with the expansion of our mortgage line of business and indirect auto finance.  As the mortgage business line grows, we expect noninterest income to be positively impacted,” says Saunders. “Additionally, asset quality continues to show improvement.”

ABOUT FIRST RELIANCE BANCSHARES, INC.

First Reliance Bancshares, Inc. is the holding company for First Reliance Bank.  The Bank was founded in 1999, employs approximately 123 highly-talented associates and serves the Columbia, Lexington, Charleston, Mount Pleasant and Florence markets in South Carolina.  First Reliance Bank offers several unique customer programs which include a Hometown Heroes package of benefits to serve those who are serving our communities, Check ‘N Save, a community outreach program for the unbanked or under-banked, a Moms First program, and an iMatter program targeted to young people. The Bank also offers a Customer Service Guaranty, a Mortgage Service Guaranty, FREE Coin Machines for customers to use, Mobile Banking, and is open on most traditional bank holidays.  Its commitment to making customers’ lives better, and the idea that “There’s More to Banking Than Money” has earned the Bank a customer satisfaction rating of 95% (2013 results from an outside survey firm.)

The common stock of First Reliance Bancshares, Inc. is traded under the symbol FSRL.OB.  Additional information about the Company is available on the Company’s web site 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.  The preliminary results for the three and six months ended June 30, 2015 presented herein above are the Company’s expectations.  However, these results are subject to adjustment by management before the audit is completed and may be adjusted based upon the results of the audit.  Should management or audit adjustments be necessary, audited results could differ materially from these preliminary results.

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 assurances about the performance of our common stock.

We undertake no obligation to correct or update any forward-looking statements, whether as a result of new information, future results or otherwise.

Contact Jeffrey A. Paolucci, Executive Vice President and Chief Financial Officer, (888) 543-5510.

 

 

                      

 

 

 

 

 

 

 

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SOURCE First Reliance Bancshares, Inc.