FLORENCE, S.C., Jan. 23 /PRNewswire-FirstCall/ — First Reliance Bancshares, Inc., (OTC Bulletin Board: FSRL), the holding company for First Reliance Bank, reported unaudited pre-tax income for the year ended December 31, 2006 of $4,428,704, an increase of $1,691,742, or 62%, over the $2,736,962 reported for the year ended December 31, 2005. Unaudited net income increased 67% to $3,245,908 as compared to $1,947,546 reported in the prior-year period. Earnings benefited from strong growth in both net interest income and non- interest income. Specifically, interest income increased 37% to $32 million for the year ended December 31, 2006, while non-interest income increased by 60% to $4.6 million. Basic earnings per share were $0.96, an increase of 60% from $0.60 reported in the prior-year period. The earnings per share for the year ending December 31, 2006 is based on average shares of 3,388,457 compared to 3,251,457 shares reported in the prior-year period.
“2006 was a year of stellar performance as we reached record high growth in all banking facets,” said Rick Saunders, President and CEO. “Low Cost/No Cost deposits increased to 20% of our total deposits, improving our funding cost and enhancing our core client base. Total loans grew by $42 million to reach an outstanding high of $353 million. Total deposits grew by an astonishing $39 million to $373 million, providing us with the leverage needed to expand our growing loan portfolio.
“Continuing to focus on our vision to be the most profitable bank in South Carolina while remaining committed to providing superior customer service will be a major objective in 2007. Our Easy-To-Do-Business-With(TM) and There’s More to Banking Than Money(TM) service excellence initiatives recently proved to be effective when our customers rated us with a satisfaction rating of 95%. 2006 saw a record number of account openings and a continuous growth in services per household, which can be attributed to our focus on these service excellence initiatives.”
“This is an exciting time for our company fueled much by tremendous loan and deposit growth and expansion into new markets,” commented Jeff Paolucci, Senior Vice President and CFO. “2007 will unveil not only a new state-of-the- art regional facility in Lexington, SC, but new branches in Irmo and Mt. Pleasant and a training facility in Florence. Additional sites for expansion will also be announced throughout the year. As an effort to remain Easy-To- Do-Business-With(TM), our 8-8 M-F New Bankers Hours(TM) will now be available at not only our Palmetto Street location, but our Second Loop location as well.”
Net Income for the three months ended December 31, 2006 was $984,377 an increase of $342,261 or 53% from the level reported in the prior year three- month period. As was the case with the year-end results, the higher profitability was driven primarily by higher interest income, which increased 29%, and non-interest income, which increased 42%. Basic earnings per share were $0.29 compared to $0.20 for the prior-year period, an increase of 45%.
At December 31, 2006, total assets were $456 million, an increase of $53 million, or 13% over the $403 million reported for December 31, 2005. Loans increased $42 million, or 13%, to $353 million, funded primarily by growth in deposits. Deposits increased to $372 million, up 12% from $334 million reported the prior year period.
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 $456 million in assets as of December 31, 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
First Reliance Bancshares,Inc.
Consolidated Reports of Income
Twelve Months Ended Three Months Ended
December 31 December 31
2006 2005 2006 2005
(Unaudited) (Audited) (Unaudited) (Audited)
Interest Income
Loans and Fees 29,222,425 21,236,608 7,947,680 5,990,150
Taxable Securities 1,029,560 770,863 246,960 240,890
Nontaxable Securities 639,710 553,993 162,250 153,070
Fed Funds Sold 687,352 478,597 172,436 238,363
Other Interest Income 137,538 91,050 42,236 27,207
Total 31,716,585 23,131,112 8,571,562 6,649,681
Interest Expense
Time Deposits $100,000 and
over 4,747,646 3,485,397 1,351,983 998,215
Other Deposits 7,748,193 4,097,836 2,188,075 1,325,680
Other interest expense 1,717,860 1,395,446 461,207 411,644
Total 14,213,699 8,978,679 4,001,265 2,735,539
Net Interest Income 17,502,886 14,152,433 4,570,297 3,914,141
Provision for loan losses (1,392,491) (1,811,317) (224,500) (794,772)
Net Interest Income after
provision 16,110,395 12,341,116 4,345,797 3,119,369
Noninterest Income
Service charges on
deposit accounts 1,691,913 1,357,214 466,115 336,806
Gain on sale of
mortgage loans 1,901,967 877,843 456,076 306,546
Brokerage fees 138,340 160,569 41,114 38,275
Gain (loss) on Sale of
Other Real Estate 7,387 (66,815) (16,142) 0
Gain (loss) on Sale
of Fixed Assets (14) (287) (14) (287)
Credit life insurance
commissions 23,175 32,606 3,809 10,008
Other 564,316 303,374 144,880 74,288
Other charges,
commissions and fees 263,610 206,783 70,737 58,305
Total 4,590,694 2,871,287 1,166,575 823,941
Noninterest Expense
Salaries and
employee benefits 9,487,388 7,136,376 2,614,438 1,649,569
Occupancy expense 1,130,705 919,584 286,552 276,746
Furniture and
equipment expense 727,457 712,308 214,466 188,446
Other operating expenses 4,926,836 3,707,173 1,225,157 934,922
Total 16,272,386 12,475,441 4,340,613 3,049,683
Income before tax 4,428,704 2,736,962 1,171,759 893,627
Income tax expense 1,182,796 789,416 187,382 251,511
Net Income 3,245,908 1,947,546 984,377 642,116
Basic earnings per share 0.96 0.60 0.29 0.20
Diluted earnings per share 0.91 0.57 0.28 0.18
First Reliance Bancshares,Inc.
Balance Sheet
December 31 December 31
2006 2005
Unaudited Audited
Assets:
Cash and Cash Equivalents
Cash and Due Froms 17,328,075 7,264,897
Federal funds sold 14,135,000 22,442,000
Total cash and cash equivalents 31,463,075 29,706,897
Investment securities
Securities available for sale 35,931,271 37,121,479
Nonmarketable equity securities 2,187,600 1,745,850
Investment in Jr Subordinated Debt 310,000 310,000
Total investment securities 38,428,871 39,177,329
Loans held for sale 6,632,010 7,994,603
Loans receivable 353,491,036 311,544,385
Less allowance for loan losses (4,001,881) (3,419,368)
Loans, net 349,489,155 308,125,017
Premises, furniture, and equipment, net 13,770,135 10,020,537
Accrued interest receivable 2,464,531 2,189,742
Other real estate owned 1,386,380 345,550
Cash surrender value life insurance 10,134,036 3,752,165
Other assets 2,442,529 1,726,044
Total Assets 456,210,722 403,037,885
Liabilities:
Deposits:
Noninterest bearing
transaction accounts 42,107,434 39,222,574
Interest bearing
transaction accounts 33,243,099 29,437,107
Savings 78,831,730 79,663,175
Time deposits $100,000 and over 111,991,864 113,268,921
Other time deposits 106,763,956 72,845,121
Total deposits 372,938,083 334,436,898
Securities sold under agreements to
repurchase 8,120,014 3,859,904
Federal funds purchased - -
Advances from Federal Home Loan Bank 28,500,000 23,500,000
Junior Subordinated Debentures 10,310,000 10,310,000
Accrued interest payable 766,276 446,303
Other liabilities 1,483,085 834,145
Total Liabilities 422,117,458 373,387,249
Shareholders' Equity:
Common Stock 34,249 33,061
Capital Surplus 25,258,185 24,127,329
Treasury Stock - (9,896)
Retained Earnings 8,857,756 5,611,847
Accumulated other comprehensive income 9,576 (111,706)
Restricted Stock (66,502) -
Total Equity 34,093,264 29,650,635
Total Liabilities and Shareholders Equity 456,210,722 403,037,885
SOURCE First Reliance Bancshares, Inc.
Contact: Jeffrey A. Paolucci, Senior Vice President and Chief Financial Officer of First Reliance Bank, +1-843-674-3250, jpaolucci@firstreliance.com
