First Reliance 3Q15 pre-tax income more than triples

FLORENCE, SC – First Reliance Bancshares, Inc. (OTC: FSRL), the holding company (the “Company”) for First Reliance Bank (the “Bank”), reported third quarter 2015 pre-tax profits reached the highest levels since 2008, fueled by strong loan and deposit growth, and expanding operating efficiencies.  In the third quarter of 2015, pre-tax income more than tripled to $997,430 from $234,117 in the third quarter a year ago.  Net income totaled $670,574 for the quarter ended September 30, 2015, compared to $3.4 million, which includes a deferred tax asset recapture of $3.6 million for the third quarter of 2014.  After preferred dividends, third quarter 2015 net income available to common shareholders was $307,964, or $0.07 per diluted share, compared to $3.1 million, or $0.66 per diluted share, in the third quarter a year ago.

Net income for the first nine months of 2015, was $8.2 million, which included a $6.9 million deferred tax asset recapture, compared to $4.2 million, which included a $3.2 million deferred tax asset recapture for the first nine months of 2014. Year-to-date, net income available to common shareholders was $7.1 million, or $1.47 per diluted share, compared to $3.3 million, or $0.70 per diluted share, in the year ago period.  Operating results improved reflecting the 5.3% asset growth over the past twelve months, generated by robust mortgage production and continued growth in consumer loan and 1-4 family mortgage originations.

“We’re excited to report one of the most profitable quarters since we opened our doors sixteen years ago.  We continue to focus on growing 1-4 family mortgage loans and consumer loans, along with the expansion of the mortgage and indirect dealer finance channels, which have produced steady growth in loans and revenues. We are also generating strong growth in no-cost/low-cost deposits and customer acquisition as the South Carolinaeconomy expands.  Our primary focus is to diversify our revenue channels, manage expenses, and improve our capital composition,” said Rick Saunders, President and CEO.

Financial Highlights (at or for the periods ended September 30, 2015, except as noted)

• For the first nine months of 2015, net income to common shareholders more than doubled to $7.1 million, or $1.47 per diluted share.
• Total revenues, (net interest income plus noninterest income), increased 5% to $5.6 million in 3Q15 from$5.3 million in 2Q15 and grew 19% from $4.7 million in 3Q14, reflecting balance sheet growth.
• Net interest income grew 2% in the third quarter from both the preceding and year ago quarters, reflecting increased loan volumes and a declining cost of funds.  Year-to-date, net interest income increased 5% to$10.7 million from the like period in 2014.
• Mortgage loans held for sale increased 22% to $17.0 million from the second quarter 2015, and grew over 561% from a year ago, reflecting organic loan growth and steady demand in the housing market.
• Net interest margin (NIM) was 4.54%
• First Reliance Bancshares remains well-capitalized with Total risk-based capital ratio of 13.8%

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