Florence, South Carolina – Wednesday, July 22, 2026 – First Reliance Bancshares, Inc. (OTCQX:FSRL), the holding company for First Reliance Bank (collectively, “First Reliance” or the “Company”), today announced its financial results for the second quarter of 2026.
Second Quarter 2026 Highlights
- Net income decreased 23.2% for the second quarter of 2026 to $2.8 million, or $0.34 per diluted share, compared to $3.7 million, or $0.44 per diluted share, for the second quarter of 2025. For the six months ended June 30, 2026, net income totaled $6.2 million, or $0.76 per diluted share, compared to $5.3 million, or $0.63 per diluted share for the same period in 2025. Operating earnings (Non-GAAP) were $3.1 million, or $0.38 per diluted share, for the second quarter of 2026, compared to $2.2 million, or $0.27 per diluted share, for the second quarter of 2025. For the first half of 2026, operating earnings (Non-GAAP) totaled $6.3 million or $0.77 per diluted share, compared to $3.9 million, or $0.47 per diluted share, for the first half of 2025.
- Book value per share rose $1.67, or 15.5%, to $12.47 at June 30, 2026, from $10.80 at June 30, 2025. Tangible book value per share (Non-GAAP) increased $1.67, or 15.6%, to $12.38 from $10.71 over the same period.
- Net interest income totaled $9.9 million for the second quarter of 2026, up $762 thousand, or 8.4%, from the same quarter in 2025 and up $348 thousand, or 3.7%, from the first quarter of 2026.
- Net interest margin decreased during the second quarter of 2026 to 3.74%, compared to 3.77% in the first quarter of 2026, and increased 21 basis points compared to the second quarter of 2025.
- Total loans held for investment increased $19.5 million, or 9.8% annualized, to $820.7 million at June 30, 2026, from $801.2 million at March 31, 2026. Total loan growth for 2026 totaled $40.8 million, or 10.6% annualized.
- Unfunded commitments declined $3.1 million during the quarter, primarily due to construction loans. As a result, the unfunded commitment reserve decreased $99 thousand to $629 thousand from $728 thousand at March 31, 2026.
- Total deposits were $920.3 million at June 30, 2026, down $8.7 million, or 3.8% annualized, from $929.0 million at March 31, 2026.
- Asset quality remained strong as nonperforming assets declined to $626 thousand, or 0.06% of total assets, at June 30, 2026, compared with $2.1 million, or 0.19% of total assets, at March 31, 2026. The decrease was primarily due to the full collection of one loan.
- In June 2026, the Company announced a partnership with Colony Bank (CBAN), headquartered in Fitzgerald, Georgia. The merger is expected to close in the fourth quarter of 2026, with systems conversion planned for the second quarter of 2027. Based on each company’s total assets at June 30, 2026, the combined company will have nearly $5.0 billion in total assets.
Rick Saunders, Chief Executive Officer, commented, “Tangible book value per share increased $1.67, or 15.6%, over the past year to $12.38. Loans grew $19.5 million, or 9.8% annualized, during the second quarter of 2026, while net interest margin expanded 21 basis points year over year to 3.74%. Asset quality remained strong, as nonperforming assets declined significantly following the payoff of our largest nonperforming loan. We were also pleased with our announced partnership with Colony Bank and look forward to joining a team that shares our commitment to exceptional customer service and support for the South Carolina communities that we serve.”
Financial Summary
| Three Months Ended | Six Months Ended | ||||||||
| Jun 30 | Mar 31 | Dec 31 | Sep 30 | Jun 30 | Jun 30 | Jun 30 | |||
| ($ in thousands, except per share data) | 2026 | 2026 | 2025 | 2025 | 2025 | 2026 | 2025 | ||
| Earnings: | |||||||||
| Net income available to common shareholders | $ 2.807 | $ 3.436 | $ 2.926 | $ 2.714 | $ 3.653 | $ 6.243 | $ 5.266 | ||
| Operating earnings (Non-GAAP) | 3.089 | 3.233 | 2.852 | 2.714 | 2.248 | 6.322 | 3.913 | ||
| Earnings per common share, diluted (GAAP) | 0,34 | 0,41 | 0,36 | 0,33 | 0,44 | 0,76 | 0,63 | ||
| Operating earnings per common share, diluted (Non-GAAP) | 0,38 | 0,39 | 0,35 | 0,33 | 0,27 | 0,77 | 0,47 | ||
| Total revenue(1) | 12.803 | 13.025 | 12.353 | 12.238 | 13.920 | 25.828 | 25.078 | ||
| Net interest margin | 3,74% | 3,77% | 3,71% | 3,66% | 3,53% | 3,76% | 3,54% | ||
| Return on average assets(2) | 1,00% | 1,25% | 1,06% | 0,99% | 1,32% | 1,12% | 0,97% | ||
| Return on average assets – Operating Non-GAAP(2) | 1,10% | 1,18% | 1,03% | 0,99% | 0,81% | 1,14% | 0,72% | ||
| Return on average equity(2) | 11,58% | 14,53% | 12,83% | 12,55% | 17,84% | 13,04% | 13,14% | ||
| Return on average equity – Operating Non-GAAP(2) | 12,75% | 13,67% | 12,51% | 12,55% | 10,98% | 13,20% | 9,76% | ||
| Efficiency ratio(3) | 71,44% | 64,84% | 71,08% | 69,61% | 64,61% | 68,11% | 69,46% | ||
| Adjusted efficiency ratio – Non-GAAP(3) | 68,67% | 66,16% | 71,59% | 69,61% | 74,03% | 67,42% | 74,52% | ||
| As of | |||||
| Jun 30 | Mar 31 | Dec 31 | Sep 30 | Jun 30 | |
| ($ in thousands) | 2026 | 2026 | 2025 | 2025 | 2025 |
| Balance Sheet: | |||||
| Total assets | $ 1.126.912 | $ 1.118.388 | $ 1.093.359 | $ 1.097.846 | $ 1.102.203 |
| Total loans receivable | 820.741 | 801.243 | 779.935 | 779.997 | 784.749 |
| Total deposits | 920.329 | 929.045 | 948.120 | 959.300 | 950.339 |
| Total transaction deposits(4) to total deposits | 38,29% | 36,83% | 36,59% | 40,68% | 39,50% |
| Loans to deposits | 89,18% | 86,24% | 82,26% | 81,31% | 82,58% |
| Bank Capital Ratios: | |||||
| Total risk-based capital ratio | 14,26% | 14,15% | 13,82% | 13,58% | 12,88% |
| Tier 1 risk-based capital ratio | 13,16% | 13,04% | 12,72% | 12,48% | 11,84% |
| Tier 1 leverage ratio | 10,53% | 10,53% | 10,16% | 9,94% | 9,74% |
| Common equity tier 1 capital ratio | 13,16% | 13,04% | 12,72% | 12,48% | 11,84% |
| Asset Quality Ratios: | |||||
| Nonperforming assets as a percentage of total assets |
0,06% | 0,19% | 0,23% | 0,03% | 0,02% |
| Allowance for credit losses as a percentage of total loans receivable | 1,14% | 1,14% | 1,13% | 1,12% | 1,09% |
| Annualized net charge-offs as a percentage of average total loan receivables | (0.00%) | (0.01%) | (0.03%) | 0,02% | 0,03% |
Footnotes to tables located at the end of this release.
CONDENSED CONSOLIDATED INCOME STATEMENTS – Unaudited
| Three Months Ended | Six Months Ended | ||||||
| Jun 30 | Mar 31 | Dec 31 | Sep 30 | Jun 30 | Jun 30 | ||
| ($ in thousands, except per share data) | 2026 | 2026 | 2025 | 2025 | 2025 | 2026 | 2025 |
| Interest income | |||||||
| Loans | $ 12.252 | $ 11.534 | $ 11.518 | $ 11.842 | $ 11.657 | $ 23.786 | $ 22.950 |
| Investment securities | 2.292 | 2.413 | 2.302 | 2.300 | 2.145 | 4.705 | 4.311 |
| Other interest income | 307 | 189 | 406 | 323 | 505 | 496 | 823 |
| Total interest income | 14.851 | 14.136 | 14.226 | 14.465 | 14.307 | 28.987 | 28.084 |
| Interest expense | |||||||
| Deposits | 4.065 | 3.930 | 4.215 | 4.536 | 4.703 | 7.995 | 9.171 |
| Other interest expense | 915 | 683 | 393 | 476 | 495 | 1.598 | 1.039 |
| Total interest expense | 4.980 | 4.613 | 4.608 | 5.012 | 5.198 | 9.593 | 10.210 |
| Net interest income | 9.871 | 9.523 | 9.618 | 9.453 | 9.109 | 19.394 | 17.874 |
| Provision for credit losses | 123 | 175 | 76 | 90 | 88 | 298 | 795 |
| Net interest income after provision for credit losses | 9.748 | 9.348 | 9.542 | 9.363 | 9.021 | 19.096 | 17.079 |
| Noninterest income | |||||||
| Mortgage banking income | 1.764 | 2.103 | 1.405 | 1.577 | 1.586 | 3.867 | 2.937 |
| Service fees on deposit accounts | 361 | 366 | 405 | 412 | 299 | 727 | 618 |
| Debit card and other service charges, commissions, and fees |
528 | 506 | 527 | 531 | 543 | 1.034 | 1.072 |
| Income from bank owned life insurance | 107 | 104 | 107 | 108 | 104 | 211 | 206 |
| Loss on sale of securities, net | – | (6) | (294) | – | – | (6) | (182) |
| Gain on sale of branches | – | – | – | – | 2.313 | – | 2.313 |
| Gain on sale of mortgage servicing right (MSR) | – | 266 | 266 | ||||
| Gain on early extinguishment of debt | – | – | – | – | – | – | 140 |
| Gain (loss) on disposal /write down of fixed assets | – | – | 382 | – | (200) | – | (200) |
| Other income | 172 | 163 | 203 | 157 | 166 | 335 | 300 |
| Total noninterest income | 2.932 | 3.502 | 2.735 | 2.785 | 4.811 | 6.434 | 7.204 |
| Noninterest expense | |||||||
| Compensation and benefits | 5.726 | 5.447 | 5.499 | 5.431 | 5.574 | 11.173 | 10.855 |
| Occupancy and equipment | 724 | 796 | 725 | 736 | 770 | 1.520 | 1.561 |
| Data processing, technology, and communications | 1.315 | 1.218 | 1.216 | 1.061 | 1.143 | 2.533 | 2.299 |
| Professional fees | 144 | 77 | 85 | 195 | 248 | 221 | 401 |
| Marketing | 65 | 96 | 71 | 155 | 175 | 161 | 298 |
| Other | 1.172 | 812 | 1.185 | 941 | 1.083 | 1.984 | 2.006 |
| Total noninterest expense | 9.146 | 8.446 | 8.781 | 8.519 | 8.993 | 17.592 | 17.420 |
| Income before provision for income taxes | 3.534 | 4.404 | 3.496 | 3.629 | 4.839 | 7.938 | 6.863 |
| Income tax expense | 727 | 968 | 570 | 915 | 1.186 | 1.695 | 1.597 |
| Net income available to common shareholders | $ 2.807 | $ 3.436 | $ 2.926 | $ 2.714 | $ 3.653 | $ 6.243 | $ 5.266 |
| (Subtract gain) / addback loss on fixed assets, net of tax | – | – | (320) | – | 151 | – | 151 |
| Subtract gain on sale of branches, net of tax | – | – | – | – | (1.746) | – | (1.746) |
| Subtract gain on sale of MSR, net of tax | – | (208) | (208) | ||||
| Subtract gain on early extinguishment of debt, net of tax | – | – | – | – | – | – | (111) |
| Addback expenses related to merger/branch sale, net of tax | 282 | – | – | – | 190 | 282 | 208 |
| Addback securities losses, net of tax | – | 5 | 246 | – | – | 5 | 145 |
| Operating net income (non-GAAP) | $ 3.089 | $ 3.233 | $ 2.852 | $ 2.714 | $ 2.248 | $ 6.322 | $ 3.913 |
| Weighted average common shares – basic | 7.784 | 7.866 | 7.745 | 7.902 | 7.892 | 7.825 | 7.880 |
| Weighted average common shares – diluted | 8.210 | 8.302 | 8.218 | 8.349 | 8.350 | 8.259 | 8.342 |
| Basic net income per common share* | $ 0,36 | $ 0,44 | $ 0,38 | $ 0,34 | $ 0,46 | $ 0,80 | $ 0,67 |
| Diluted net income per common share* | $ 0,34 | $ 0,41 | $ 0,36 | $ 0,33 | $ 0,44 | $ 0,76 | $ 0,63 |
| Operating basic net income per common share (nonGAAP)* | $ 0,40 | $ 0,41 | $ 0,37 | $ 0,34 | $ 0,28 | $ 0,81 | $ 0,50 |
| Operating diluted net income per common share (nonGAAP)* | $ 0,38 | $ 0,39 | $ 0,35 | $ 0,33 | $ 0,27 | $ 0,77 | $ 0,47 |
*Note that the sum of the quarters may not equal the YTD result due to rounding of earnings per share each quarter, given the weighted average shares outstanding basic and/or diluted.
Footnotes to table located at the end of this release.
Net income for the three months ended June 30, 2026, was $2.8 million, or $0.34 per diluted common share, compared to $3.7 million, or $0.44 per diluted common share, for the three months ended June 30, 2025. Operating net income (Non-GAAP), for the three months ended June 30, 2026, was $3.1 million, or $0.38 per diluted common share, compared to $2.2 million, or $0.27 per diluted common share for the three months ended June 30, 2025. Net income for the six months ended June 30, 2026, totaled $6.2 million, or $0.76 per diluted common share, compared to $5.3 million, or $0.63 per diluted common share, at June 30, 2025. On an operating basis, diluted EPS (Non-GAAP) was $0.77 per diluted common share, for the six months ended June 30, 2026, which includes adding back the impact of securities losses, net of tax, subtracting the gain on the sale of mortgage servicing rights, net of tax, and adding back the impact of merger related expenses, net of tax. The items affecting June 30, 2025, net of tax, include the following: the addback of loss on fixed asset write downs, adding back the impact of expenses related to the branch sales, adding back securities losses, offset by subtracting the gain recognized on the sale of branches and the gain from the early extinguishment of debt, which resulted in $0.47 per diluted common share, for the six months ended June 30, 2025.
Noninterest income, for the three months ended June 30, 2026, was $2.9 million, a decrease of $1.9 million from $4.8 million for the same period in 2025. Mortgage banking income totaled $1.8 million in the second quarter of 2026 compared to $1.6 million in the second quarter of 2025. In the second quarter of 2025, the Company sold its two branches in NC recognizing a gain of $2.3 million and wrote down a parcel of land by $200 thousand.
For the six months ended June 30, 2026, noninterest income decreased $770 thousand compared with the same period in 2025. The decline was due to the $2.3 million gain on the sale of branches and the $140 thousand gain on early debt extinguishment recognized in 2025. These two items were partially offset by a $930 thousand increase in mortgage banking income, a $266 thousand gain on the sale of mortgage servicing rights, a $109 thousand increase in deposit account service fees, no fixed-asset write-down in 2026, and a $176 thousand reduction in losses on securities sold.
Noninterest expense was $9.1 million for the three months ended June 30, 2026, up $152 thousand from $9.0 million for the same period in 2025. The increase was driven by a $152 thousand rise in compensation and benefits, primarily due to higher incentives and mortgage commissions, partially offset by lower salaries, payroll taxes, and insurance benefits. All other expense categories offset one another.
Noninterest expense was $17.6 million for the six months ended June 30, 2026, up $172 thousand from the prior-year period. The increase was primarily driven by a $318 thousand rise in compensation and benefits related to mortgage commissions, incentives, and stock compensation expense, partially offset by lower salaries, payroll taxes, and benefits. Data processing, technology, and communications expense increased $234 thousand. These increases were partially offset by a $137 thousand decrease in marketing expense and $181 thousand decrease in professional fees related to FDICIA compliance audit and legal costs.
Operating adjustments – 2Q 2026
During the second quarter of 2026, the Company announced the partnership with Colony Bank (CBAN) headquartered in Fitzgerald, Georgia. The Company incurred $354 thousand of merger related expenses.
Operating adjustments – 1Q 2026
During the first quarter of 2026, the Company sold mortgage servicing rights (MSRs) related to approximately $565.9 million of underlying mortgage loans for an initial gain of $266 thousand, net of direct expenses. The Company also sold securities at a net loss of $6 thousand.
Operating adjustments – 4Q 2025
During the fourth quarter of 2025, the Company sold a property in Florence which resulted in a gain of $382 thousand and sold five securities resulting in a net loss of $294 thousand.
There were no operating adjustments in 3Q 2025.
Operating adjustments – 2Q 2025
During the second quarter of 2025, the Company sold the two North Carolina locations to Carter Bank from Virginia. This sale resulted in a gain of $2.3 million on the deposits assumed by Carter Bank, before expenses. Expenses directly related to the branches sold totaled $252 thousand in the second quarter of 2025. Operating net income reflects the removal of these two items. Total deposits assumed by Carter Bank were $55.9 million. No loans were acquired in this transaction by Carter Bank.
Additionally, the Company wrote down a parcel of land in North Charleston by $200 thousand. This parcel is currently under contract to be sold. Operating net income reflects the add back of this item, net of tax, totaling $151 thousand.
NET INTEREST INCOME AND MARGIN – Unaudited – QTD
| For the Three Months Ended | |||||||||||
| June 30, 2026 | March 31, 2026 | June 30, 2025 | |||||||||
| Average | Income/ | Yield/ | Average | Income/ | Yield/ | Average | Income/ | Yield/ | |||
| ($ in thousands) | Balance | Expense | Rate | Balance | Expense | Rate | Balance | Expense | Rate | ||
| Assets | |||||||||||
| Interest-earning assets | |||||||||||
| Federal funds sold and interest-bearing deposits | $ 31.859 | $ 261 | 3,28% | $ 23.893 | $ 166 | 2,82% | $ 46.216 | $ 478 | 4,15% | ||
| Investment securities | 194.063 | 2.292 | 4,74% | 197.798 | 2.413 | 4,95% | 186.573 | 2.145 | 4,61% | ||
| Nonmarketable equity securities | 4.147 | 46 | 4,49% | 2.994 | 24 | 3,21% | 1.665 | 28 | 6,65% | ||
| Loans held for sale | 16.354 | 318 | 7,80% | 10.469 | 163 | 6,34% | 16.269 | 353 | 8,70% | ||
| Loans | 811.650 | 11.934 | 5,90% | 788.645 | 11.370 | 5,85% | 783.489 | 11.304 | 5,79% | ||
| Total interest-earning assets | 1.058.073 | 14.851 | 5,63% | 1.023.799 | 14.136 | 5,60% | 1.034.212 | 14.307 | 5,55% | ||
| Allowance for credit losses | (9.181) | (8.886) | (8.652) | ||||||||
| Noninterest-earning assets | 78.237 | 82.451 | 80.987 | ||||||||
| Total assets | $ 1.127.129 | $ 1.097.364 | $ 1.106.547 | ||||||||
| Liabilities and Shareholders’ Equity | |||||||||||
| Interest-bearing liabilities | |||||||||||
| NOW accounts | $ 101.523 | $ 163 | 0,64% | $ 94.858 | $ 155 | 0,66% | $ 158.726 | $ 242 | 0,61% | ||
| Savings & money market | 429.446 | 2.679 | 2,50% | 429.693 | 2.612 | 2,47% | 435.548 | 3.127 | 2,88% | ||
| Time deposits | 152.404 | 1.223 | 3,22% | 153.746 | 1.163 | 3,07% | 158.378 | 1.334 | 3,38% | ||
| Total interest-bearing deposits | 683.373 | 4.065 | 2,39% | 678.297 | 3.930 | 2,35% | 752.652 | 4.703 | 2,51% | ||
| FHLB advances and other borrowings | 69.780 | 673 | 3,87% | 45.861 | 439 | 3,88% | 17.913 | 191 | 4,29% | ||
| Subordinated debentures | 19.799 | 242 | 4,90% | 19.791 | 244 | 5,00% | 23.228 | 304 | 5,25% | ||
| Total interest-bearing liabilities | 772.952 | 4.980 | 2,58% | 743.949 | 4.613 | 2,51% | 793.793 | 5.198 | 2,63% | ||
| Noninterest bearing deposits | 244.109 | 246.142 | 217.979 | ||||||||
| Other liabilities | 13.139 | 12.659 | 12.885 | ||||||||
| Shareholders’ equity | 96.929 | 94.614 | 81.890 | ||||||||
| Total liabilities and shareholders’ equity | $ 1.127.129 | $ 1.097.364 | $ 1.106.547 | ||||||||
| Net interest income (tax equivalent) / interest rate spread |
$ 9.871 | 3,05% | $ 9.523 | 3,09% | $ 9.109 | 2,92% | |||||
| Net Interest Margin | 3,74% | 3,77% | 3,53% | ||||||||
| Cost of funds, including noninterest-bearing deposits | 1,96% | 1,89% | 2,06% | ||||||||
Net interest income for the three months ended June 30, 2026, was $9.9 million, compared with $9.1 million for the same period in 2025. The increase reflected a $544 thousand rise in interest income and a $218 thousand decrease in interest expense. Net interest margin improved to 3.74% from 3.53% a year earlier. Loans and securities generated the largest increases in both income and yields compared with the prior year, while lower yields on most interest-bearing liabilities, excluding NOW accounts, also contributed to the margin improvement. In addition, the total cost of funds, including noninterest-bearing deposits, decreased to 1.96% in the second quarter of 2026, compared to 2.06% in the second quarter of 2025.
NET INTEREST INCOME AND MARGIN – Unaudited – YTD
| For the Six Months Ended | |||||||
| June 30, 2026 | June 30, 2025 | ||||||
| Average | Income/ | Yield/ | Average | Income/ | Yield/ | ||
| ($ in thousands) | Balance | Expense | Rate | Balance | Expense | Rate | |
| Assets | |||||||
| Interest-earning assets | |||||||
| Federal funds sold and interest-bearing deposits | $ 27.898 | $ 427 | 3,08% | $ 39.262 | $ 769 | 3,95% | |
| Investment securities | 195.921 | 4.704 | 4,84% | 183.408 | 4.311 | 4,74% | |
| Nonmarketable equity securities | 3.574 | 70 | 3,95% | 1.676 | 54 | 6,45% | |
| Loans held for sale | 13.428 | 482 | 7,24% | 17.937 | 717 | 8,06% | |
| Loans | 800.211 | 23.304 | 5,87% | 776.521 | 22.233 | 5,77% | |
| Total interest-earning assets | 1.041.032 | 28.987 | 5,62% | 1.018.804 | 28.084 | 5,56% | |
| Allowance for credit losses | (9.035) | (8.593) | |||||
| Noninterest-earning assets | 80.332 | 80.765 | |||||
| Total assets | $ 1.112.329 | $ 1.090.976 | |||||
| Liabilities and Shareholders’ Equity | |||||||
| Interest-bearing liabilities | |||||||
| NOW accounts | $ 98.209 | $ 318 | 0,65% | $ 152.565 | $ 473 | 0,62% | |
| Savings & money market | 429.569 | 5.291 | 2,48% | 427.502 | 5.998 | 2,83% | |
| Time deposits | 153.071 | 2.386 | 3,14% | 157.773 | 2.700 | 3,45% | |
| Total interest-bearing deposits | 680.849 | 7.995 | 2,37% | 737.840 | 9.171 | 2,51% | |
| FHLB advances and other borrowings | 57.887 | 1.112 | 3,88% | 18.732 | 404 | 4,35% | |
| Subordinated debentures | 19.795 | 486 | 4,95% | 24.111 | 635 | 5,31% | |
| Total interest-bearing liabilities | 758.531 | 9.593 | 2,55% | 780.683 | 10.210 | 2,64% | |
| Noninterest bearing deposits | 245.120 | 217.556 | |||||
| Other liabilities | 12.900 | 12.585 | |||||
| Shareholders’ equity | 95.778 | 80.152 | |||||
| Total liabilities and shareholders’ equity | $ 1.112.329 | $ 1.090.976 | |||||
| Net interest income (tax equivalent) / interest rate spread |
$ 19.394 | 3,07% | $ 17.874 | 2,92% | |||
| Net Interest Margin | 3,76% | 3,54% | |||||
| Cost of funds,including noninterest bearing deposits | 1,93% | 2,06% | |||||
Net interest income was $19.4 million for the six months ended June 30, 2026, an increase of $1.5 million from $17.9 million for the same period in 2025. Net interest margin rose year over year to 3.76% from 3.54%. Yields improved on investment securities and loans, while yields declined across all interest-bearing liability categories except NOW accounts. The total cost of funds, including noninterest-bearing deposits, decreased to 1.93% from 2.06% in 2025.
CONDENSED CONSOLIDATED BALANCE SHEETS – Unaudited
| As of | |||||
| Jun 30 | Mar 31 | Dec 31 | Sep 30 | Jun 30 | |
| ($ in thousands) | 2026 | 2026 | 2025 | 2025 | 2025 |
| Assets | |||||
| Cash and cash equivalents: | |||||
| Cash and due from banks | $ 4.036 | $ 4.236 | $ 4.031 | $ 5.072 | $ 4.066 |
| Interest-bearing deposits with banks | 22.991 | 26.477 | 28.101 | 26.695 | 29.487 |
| Total cash and cash equivalents | 27.027 | 30.713 | 32.132 | 31.767 | 33.553 |
| Investment securities: | |||||
| Investment securities available for sale | 188.825 | 200.886 | 196.043 | 199.674 | 194.136 |
| Other investments | 4.400 | 3.682 | 1.764 | 1.527 | 2.497 |
| Total investment securities | 193.225 | 204.568 | 197.807 | 201.201 | 196.633 |
| Mortgage loans held for sale | 18.135 | 15.636 | 12.280 | 13.336 | 14.944 |
| Loans receivable: | |||||
| Loans | 820.741 | 801.243 | 779.935 | 779.997 | 784.749 |
| Less allowance for credit losses | (9.334) | (9.105) | (8.827) | (8.741) | (8.535) |
| Loans receivable, net | 811.407 | 792.138 | 771.108 | 771.256 | 776.214 |
| Property and equipment, net | 24.321 | 24.454 | 24.348 | 23.313 | 22.469 |
| Mortgage servicing rights | 9.481 | 8.728 | 14.656 | 14.421 | 14.093 |
| Bank owned life insurance | 19.240 | 19.134 | 19.029 | 18.922 | 18.815 |
| Deferred income taxes | 6.944 | 6.438 | 6.117 | 6.221 | 6.510 |
| Other assets | 17.132 | 16.579 | 15.882 | 17.409 | 18.972 |
| Total assets | $ 1.126.912 | 1.118.388 | 1.093.359 | 1.097.846 | 1.102.203 |
| Liabilities | |||||
| Deposits | $ 920.329 | $ 929.045 | $ 948.120 | $ 959.300 | $ 950.339 |
| Federal Home Loan Bank advances | 75.000 | 60.000 | 20.000 | 15.000 | 32.500 |
| Federal funds and repurchase agreements | – | – | – | – | 207 |
| Subordinated debentures | 9.492 | 9.484 | 9.476 | 9.469 | 9.461 |
| Junior subordinated debentures | 10.310 | 10.310 | 10.310 | 10.310 | 10.310 |
| Reserve for unfunded commitments | 629 | 728 | 822 | 767 | 925 |
| Other liabilities | 12.736 | 12.937 | 11.565 | 13.498 | 12.560 |
| Total liabilities | 1.028.496 | 1.022.504 | 1.000.293 | 1.008.344 | 1.016.302 |
| Shareholders’ equity | |||||
| Preferred stock – Series D non-cumulative, no par value |
1 | 1 | 1 | 1 | 1 |
| Common Stock – $.01 par value; 20,000,000 shares authorized |
89 | 89 | 88 | 88 | 88 |
| Treasury stock, at cost | (8.635) | (8.536) | (8.085) | (7.883) | (6.654) |
| Nonvested restricted stock | (1.241) | (1.592) | (1.949) | (2.359) | (2.536) |
| Additional paid-in capital | 57.041 | 57.026 | 56.869 | 56.931 | 56.708 |
| Retained earnings | 56.821 | 54.014 | 50.578 | 47.652 | 44.937 |
| Accumulated other comprehensive loss | (5.660) | (5.118) | (4.436) | (4.928) | (6.643) |
| Total shareholders’ equity | 98.416 | 95.884 | 93.066 | 89.502 | 85.901 |
| Total liabilities and shareholders’ equity | $ 1.126.912 | $ 1.118.388 | $ 1.093.359 | $ 1.097.846 | $ 1.102.203 |
Cash and cash equivalents totaled $27.0 million at June 30, 2026, compared with $30.7 million at March 31, 2026. Cash held at the Federal Reserve Bank was $22.4 million, compared with $26.3 million at March 31, 2026.
First Reliance had no held-to-maturity (HTM) securities for any reported period. All debt securities were classified as available-for-sale (AFS), with balances of $188.8 million at June 30, 2026, and $194.1 million at June 30, 2025. The unrealized loss on these securities was $7.5 million at June 30, 2026, compared with $6.8 million at March 31, 2026, an increase of $700 thousand before taxes during the second quarter of 2026.
Deposits decreased $8.7 million, or 3.8% annualized, as of June 30, 2026, primarily due to lower money market account balances. The decline was partially offset by increases in noninterest-bearing deposits, DDA and NOW accounts, and time deposits under $250 thousand. See the table on page 10 for details.
The Company had $75.0 million in outstanding borrowings with the Federal Home Loan Bank (FHLB) of Atlanta at June 30, 2026, up from $60.0 million at March 31, 2026. The Company had remaining credit availability in excess of $245.0 million with the FHLB of Atlanta, subject to collateral requirements.
First Reliance also has access to approximately $17.9 million through the Federal Reserve Bank discount window with posted collateral. There are currently no borrowings against the Federal Reserve Bank discount window.
COMMON STOCK SUMMARY – Unaudited
| As of | |||||
| Jun 30 | Mar 31 | Dec 31 | Sep 30 | Jun 30 | |
| (shares in thousands) | 2026 | 2026 | 2025 | 2025 | 2025 |
| Voting common shares outstanding | 8.905 | 8.896 | 8.804 | 8.794 | 8.787 |
| Treasury shares outstanding | (1.010) | (1.003) | (972) | (954) | (830) |
| Total common shares outstanding | 7.895 | 7.893 | 7.832 | 7.840 | 7.957 |
| Book value per common share | $ 12,47 | $ 12,15 | $ 11,88 | $ 11,42 | $ 10,80 |
| Tangible book value per common share – Non-GAAP(5) | $ 12,38 | $ 12,06 | $ 11,79 | $ 11,33 | $ 10,71 |
| Stock price: | |||||
| High | $ 18,75 | $ 16,03 | $ 13,70 | $ 10,21 | $ 10,00 |
| Low | $ 13,03 | $ 12,00 | $ 10,00 | $ 9,36 | $ 9,00 |
| Period end | $ 18,43 | $ 13,90 | $ 12,26 | $ 10,10 | $ 9,60 |
ASSET QUALITY MEASURES – Unaudited
| As of | |||||
| Jun 30 | Mar 31 | Dec 31 | Sep 30 | Jun 30 | |
| ($ in thousands) | 2026 | 2026 | 2025 | 2025 | 2025 |
| Nonperforming Assets | |||||
| Commercial | |||||
| Owner occupied RE | $ 332 | $ 1.357 | $ 1.573 | $ 36 | $ 39 |
| Non-owner occupied RE | – | – | – | – | – |
| Construction | – | – | – | – | – |
| Commercial business | 24 | 27 | 31 | 38 | 43 |
| Consumer | |||||
| Real estate | 208 | 69 | 36 | 226 | 39 |
| Home equity | – | – | – | – | – |
| Construction | – | – | – | – | – |
| Other | 62 | 65 | 71 | 69 | 84 |
| Nonaccruing loan modifications | – | – | – | – | – |
| Total nonaccrual loans | $ 626 | $ 1.518 | $ 1.711 | $ 369 | $ 205 |
| Loans past due 90 days or more & accruing interest | – | $ 592 | $ 744 | $ – | |
| Other assets repossessed | – | – | 6 | – | – |
| Total nonperforming assets | $ 626 | $ 2.110 | $ 2.461 | $ 369 | $ 205 |
| Nonperforming assets as a percentage of: | |||||
| Total assets | 0,06% | 0,19% | 0,23% | 0,03% | 0,02% |
| Total loans receivable | 0,08% | 0,26% | 0,32% | 0,05% | 0,03% |
| Accruing loan modifications | $ 526 | $ 555 | $ 668 | $ 683 | $ 797 |
| Three Months Ended | |||||
| Jun 30 | Mar 31 | Dec 31 | Sep 30 | Jun 30 | |
| ($ in thousands) | 2026 | 2026 | 2025 | 2025 | 2025 |
| Allowance for Credit Losses | |||||
| Balance, beginning of period | $ 9.105 | $ 8.827 | $ 8.741 | $ 8.535 | $ 8.654 |
| Loans charged-off | 10 | 8 | 15 | 48 | 110 |
| Recoveries of loans previously charged-off | 17 | 17 | 80 | 6 | 57 |
| Net charge-offs (recoveries) | (7) | (9) | (65) | 42 | 53 |
| Provision for credit losses | 222 | 269 | 21 | 248 | (66) |
| Balance, end of period | $ 9.334 | $ 9.105 | $ 8.827 | $ 8.741 | $ 8.535 |
| Allowance for credit losses to gross loans receivable | 1,14% | 1,14% | 1,13% | 1,12% | 1,09% |
| Allowance for credit losses to nonaccrual loans | 1491,67% | 599,78% | 515,87% | 2368,83% | 4163,41% |
Asset quality improved in the second quarter of 2026, as nonperforming assets declined to $626 thousand, or 0.06% of total assets, primarily due to the payoff of one nonaccrual loan. The allowance for credit losses was 1.14% of total loans receivable at June 30, 2026, unchanged from March 31, 2026, and up from 1.09% at June 30, 2025. During the second quarter of 2026, the allowance increased $229 thousand, reflecting a $222 thousand provision for credit losses and $7 thousand in net recoveries. In the second quarter of 2025, the Company recorded $53 thousand in net charge-offs and reduced the allowance through a $66 thousand provision for credit losses. The allowance was 1.09% of total loans at June 30, 2025.
Footnotes to table located at the end of this release.
LOAN COMPOSITION – Unaudited
| As of | |||||
| Jun 30 | Mar 31 | Dec 31 | Sep 30 | Jun 30 | |
| ($ in thousands) | 2026 | 2026 | 2025 | 2025 | 2025 |
| Commercial real estate | $ 480.996 | $ 475.483 | $ 466.293 | $ 471.002 | $ 483.278 |
| Consumer real estate | 251.864 | 238.369 | 230.379 | 220.767 | 223.310 |
| Commercial and industrial | 78.375 | 76.142 | 71.212 | 71.802 | 61.255 |
| Consumer and other | 9.506 | 11.249 | 12.051 | 16.426 | 16.906 |
| Total loans, net of deferred fees | 820.741 | 801.243 | 779.935 | 779.997 | 784.749 |
| Less allowance for credit losses | 9.334 | 9.105 | 8.827 | 8.741 | 8.535 |
| Total loans, net | $ 811.407 | $ 792.138 | $ 771.108 | $ 771.256 | $ 776.214 |
DEPOSIT COMPOSITION – Unaudited
| As of | |||||
| Jun 30 | Mar 31 | Dec 31 | Sep 30 | Jun 30 | |
| ($ in thousands) | 2026 | 2026 | 2025 | 2025 | 2025 |
| Noninterest-bearing | $ 249.674 | $ 247.577 | $ 254.618 | $ 292.107 | $ 219.352 |
| Interest-bearing: | |||||
| DDA and NOW accounts | 102.681 | 94.579 | 92.310 | 98.135 | 156.062 |
| Money market accounts | 368.363 | 394.279 | 419.683 | 360.621 | 379.078 |
| Savings | 35.206 | 36.168 | 37.416 | 38.279 | 38.995 |
| Time, less than $250,000 | 120.402 | 103.678 | 104.671 | 126.195 | 125.607 |
| Time, $250,000 and over | 44.003 | 52.764 | 39.422 | 43.963 | 31.245 |
| Total deposits | $ 920.329 | $ 929.045 | $ 948.120 | $ 959.300 | $ 950.339 |
Footnotes to tables:
- Total revenue is the sum of net interest income and noninterest income.
- Annualized for the respective period.
- Noninterest expense divided by the sum of net interest income and noninterest income.
- Includes noninterest-bearing and interest-bearing DDA and NOW accounts.
- The tangible book value per share is calculated as total shareholders’ equity less intangible assets, divided by period-end outstanding common shares.
ABOUT FIRST RELIANCE
Founded in 1999, First Reliance Bancshares, Inc. (OTCQX: FSRL), is based in Florence, South Carolina and has assets of approximately $1.13 billion. The Company employs approximately 160 professionals and has locations throughout South Carolina. First Reliance has redefined community banking with a commitment to making customers’ lives better, its founding principle. Customers of the Company have given it a 92% customer satisfaction rating, well above the bank industry average of 82%. First Reliance is also one of two companies throughout South Carolina to receive the Best Places to Work in South Carolina award all 20 years since the program began. We believe that this recognition confirms that our associates are engaged and committed to our brand and the communities we serve. The Company offers a full range of personalized community banking products and services for individuals, small businesses, and corporations. The Company also offers a full suite of digital banking services, Treasury Services, a Customer Service Guaranty, a Mortgage Service Guaranty, and First Reliance Wealth Strategies.
FORWARD-LOOKING STATEMENTS
Certain statements in this news release contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, such as statements relating to future plans and expectations, and are thus prospective. Such forward-looking statements include, but are not limited to, statements with respect to our plans, objectives, expectations and intentions and other statements that are not historical facts, and other statements identified by words such as “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “targets,” and “projects,” as well as similar expressions. Such statements are subject to risks, uncertainties, and other factors which could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Although we believe that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove to be inaccurate. Therefore, we can give no assurance that the results contemplated in the forward-looking statements will be realized. The inclusion of this forward-looking information should not be construed as a representation by the Company or any person that the future events, plans, or expectations contemplated by the Company will be achieved.
The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: (1) competitive pressures among depository and other financial institutions may increase significantly and have an effect on pricing, spending, third-party relationships and revenues; (2) the strength of the United States economy in general and the strength of the local economies in which we conduct operations may be different than expected resulting in, among other things, a deterioration in the credit quality or a reduced demand for credit, including the resultant effect on the Company’s loan portfolio and allowance for credit losses; (3) the rate of delinquencies and amounts of charge-offs, the level of allowance for credit loss, the rates of loan growth, or adverse changes in asset quality in our loan portfolio, which may result in increased credit risk-related losses and expenses; (4) the risk that the preliminary financial information reported herein and our current preliminary analysis will be different when our review is finalized; (5) changes in the U.S. legal and regulatory framework including, but not limited to, the Dodd-Frank Act and regulations adopted thereunder; (6) adverse conditions in the stock market, the public debt market and other capital markets (including changes in interest rate conditions) could have a negative impact on the Company, including the value of its MSR asset; (7) the business related to acquisitions may not be integrated successfully or such integration may take longer to accomplish than expected; (8) the expected cost savings and any revenue synergies from acquisitions may not be fully realized within expected timeframes; and (9) disruption from acquisitions may make it more difficult to maintain relationships with clients, associates or suppliers. Moreover, a trade war or other governmental action related to tariffs or international trade agreements or policies, as well as other potential epidemics or pandemics, have the potential to negatively impact ours and/or our customers’ costs, demand for our customers’ products, and/or the U.S. economy or certain sectors thereof and, thus, adversely affect our business, financial condition, and results of operations. All subsequent written and oral forward-looking statements concerning the Company or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements above. We do not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statements are made.
