First Reliance Announces Unaudited Year End Operating Results

FLORENCE, SC – First Reliance Bancshares, Inc (OTC: FSRL) today announced unaudited results for the year ended December 31, 2014.  The Company earned net income of $4,407,611, or$0.68 per diluted share, for the year ended December 31, 2014.  This compares to a net loss of $7,736,530, or$2.07 per diluted share, for the year ended December 31, 2013.  The increase in unaudited net income from 2013 to 2014 is attributed primarily to an increase in net interest income of $1.6 million, a reduction in noninterest expense of $6.1 million, and a tax benefit of $3.1 million derived from the recapture of a portion of the Company’s deferred tax asset (DTA) in the third quarter of 2014.  The Company had a remaining DTA valuation allowance of $6.6 million as of December 31, 2014.  Net income per share for the year endedDecember 31, 2014 is based on 4,688,981 diluted average shares, compared to 4,294,105 diluted average shares for 2013.  Income before income taxes increased to $1.3 million for the year ended December 31, 2014, versus a loss before income taxes of $6.3 million for the year ended December 31, 2013.  The Company’s 2014 pre-tax operating results were positively impacted by an increase in net interest income, and significant reductions in noninterest expense.

Net interest income increased $1,656,687, and totaled $13,914,475 for the year ended December 31, 2014, compared to $12,257,788 for the year ended December 31, 2013.  Interest income increased $367,971, while interest expense was reduced by $1,288,716.  The Company continues to withstand competitive pressures regarding loan yields and has lowered its cost of funds, resulting in an increase in net interest margin from 3.74% in 2013 to 4.35% for 2014.

Noninterest income remained relatively flat, and totaled $4,436,645 for the year ended December 31, 2014compared to $4,405,750 for 2013.

Noninterest expense levels decreased $6,075,398, and totaled $16,317,862 for the year ended December 31, 2014 compared to $22,393,260 for 2013.  Contributing to this decrease were significant reductions in overhead expenses on other real estate owned, totaling $6,087,147, and salary and benefits reductions.

Total assets increased 3.47% to $367.8 million as of December 31, 2014, compared to $355.4 million as ofDecember 31, 2013.

Loans increased 7.08%, or $16.9 million, excluding loans held for sale, to $255.4 million as of December 31, 2014, from $238.5 million as of December 31, 2013.  The Company continues to focus efforts on its strategic initiatives of diversifying revenue streams, expanding its consumer lending platform, increasing its portfolio 1-4 family mortgage loans, and further expanding its Charleston presence.

Deposits increased by $2.9 million, or 1.03%, to $285.3 million at December 31, 2014, from $282.4 million atDecember 31, 2013.  The increase in loans was funded primarily by an increase in core non-time deposits.  No-cost / low-cost deposits increased 8.71%, to $147.7 million as of December 31, 2014, compared to $136.0 million at the prior year-end.

The Company continues to show improvement in asset quality.   The ratio of nonperforming assets to total assets was 1.87% as of December 31, 2014, compared to 4.97% as of December 31, 2013.  The allowance for loan losses as a percentage of loans was 1.18% as of December 31, 2014, compared to 1.22% as of December 31, 2013.  For the year ended December 31, 2014, additions to the allowance for loan losses were minimal at$108,769.  The decrease in provisions for loan losses is attributed to increased recoveries, reduced non-performing assets, declining delinquencies and reduced classified loans.

“We are extremely pleased with our Company’s year-end results as our asset quality continues to strengthen and we grow revenues and profits in each business line,” said Jeffrey Paolucci, Executive Vice President and Chief Financial Officer.

“We believe that the Company’s year-end results demonstrate our ability to execute on our strategic plan and expand our products and services.  We continue to grow our consumer lending platform and will expand further within the Charleston market with a focus on mortgage lending.  Additionally, we are expanding convenient platforms for mobile banking to meet the needs of customers who want banking on the go.  We are the community bank of choice in our local markets as many people have discovered the exceptional service they receive and recognize us for our support of the communities we serve,” said Rick Saunders, President and CEO.

 

 

 

 

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 100 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 ended December 31, 2014 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.