First Reliance Announces Strong 1st Quarter Results

FLORENCE, SC – First Reliance Bancshares, Inc.  announced that it had net income of $513,427, for the quarter ended March 31, 2015.  This compares to a net income of $346,357, for the quarter ended March 31, 2014.  The increase in net income from March 31, 2014 to March 31, 2015 is primarily attributed to an increase in net interest income of $217,673, supported by no-cost/low-cost annual deposit growth of $10.3 million, and an increase in noninterest income of $142,481. The Company’s operating results for the quarter were positively impacted by annual asset growth of $8.2 million, annual consumer loan growth of $5.4 million, and annual non performing asset reduction of $3.7 million.

Net interest income increased $217,673, and totaled $3.5 million for the quarter ended March 31, 2015, compared to $3.2 million for the quarter ended March 31, 2014.  Interest income increased $79,206 while interest expense was reduced by $138,465.  The indirect auto finance business line launched last year is strategically positioned for a slow to moderate growth; primarily focused on high quality loan customers and transacting business only in the markets we currently are serving.  This line has reached profitability and is now contributing positively to the bottom line.

Noninterest income increased $142,481, and totaled $1.1 million for the quarter ended March 31, 2015compared to $1 million for the first quarter of 2014.  The increase in noninterest income was primarily attributable to a year over year increase of $128,875 in gain on sale of mortgage loans.

Noninterest expense levels increased $91,949, and totaled $4.0 million for the quarter ended March 31, 2015compared to $3.9 million for 2014.  Contributing to this increase is expense associated with the expansion of our mortgage division, where we’ve added approximately 20 new associates as part of our strategic plan to diversify  our revenue. As this business line grows, we expect noninterest income to be positively impacted.

Total assets increased 2.25% to $376 million as of March 31, 2015, compared to $367.8 million as ofDecember 31, 2014.

Loans increased $1.1 million, excluding loans held for sale, to $256.5 million as of March 31, 2015, from $255.4 million as of December 31, 2014.  The Company continues to focus efforts on its strategic initiatives of diversifying revenue streams, expanding its consumer lending platform, increasing its portfolio of 1-4 family mortgage loans, and further expanding its Charleston and Columbia market presence.

Deposits increased by $6.3 million, or 2.21%, to $291.6 million at March 31, 2015, from $285.3 million atDecember 31, 2014.  The increase in deposits was primarily due to the increase in core non-time deposits.  No-cost/low-cost deposits increased 4.86%, to $221.8 million as of March 31, 2015, compared to $211.5 million atDecember 31, 2014.

The Company continues to show improvement in asset quality.  The ratio of nonperforming assets to total assets was 1.60% as of March 31, 2015, compared to 4.24% as of March 31, 2014.  The allowance for loan losses as a percentage of loans was 1.05% as of March 31, 2015, compared to 1.15% as of March 31, 2014.  For the three months ended March 31, 2015, additions to the allowance for loan losses were minimal at$78,827.

“We are pleased that First Reliance Bank is off to a good start in 2015, realizing profits in our first quarter,” saysRick Saunders, President and CEO of First Reliance Bank. “The bank continues to be well capitalized and in excess of regulatory requirements, and has strong liquidity,” he adds. Saunders noted that during the first quarter of 2015, First Reliance also benefitted from lower cost of funds.

“Additionally, credit quality is stabilizing,” says Saunders. “We have a sound credit review process and aggressive risk review methodology. 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. The indirect finance business line has reached profitability and we are on target for our mortgage line of business profitability projections.”

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 120 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 year quarter ended March 31, 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.