FLORENCE, S.C., April 28, 2017 /PRNewswire/ -- First Reliance Bancshares, Inc. (OTC: FSRL), the holding company (the "Company") for First Reliance Bank (the "Bank"), reported first quarter 2017 net income after tax of $634,042.  Profitability continues to be led by strong loan and deposit growth, and expanding operating efficiencies.  In the first quarter of 2017, net income after tax is up 23.32% compared to $514,138 in the first quarter a year ago.  Net income to common shareholders improved 329.9% in the first quarter of 2017 to $634,042 compared to $147,499 in the first quarter one year ago.  Diluted EPS grew 347.9% to $0.13 as of March 31, 2017 from $0.03 one year ago as a result of redeeming 100% of the TARP funds in the third quarter of 2016.    

"Our strong performance in growing low cost deposits and loan production provides opportunities to increase our brand presence throughout South Carolina with further expansions into the Midlands and Coastal regions.  We have recently expanded our footprint in Dorchester County with a Loan Production Office in Summerville which is pending regulatory approval to be a full service branch.  Given that capital markets are responding positively to our industry, we are giving strong consideration to raising additional capital to fund our growth initiatives," said Rick Saunders, President and CEO.

Financial Highlights (at or for the periods ended March 31, 2017, except as noted)

• Diluted EPS grew 347.9% to $0.13 as of March 31, 2017 from $0.03 one year ago.
• Book value per share is $5.90, up 12% from one year ago
• Return on Assets of 0.61% and Return on Equity of 9.33%
• Completion of Series A and B -Preferred Stock (TARP) redemption in third quarter 2016 with anticipated improvement in earnings per share of $0.21
• Branch expansion into Summerville and Dorchester County
• Loan growth is up $37.4 million or 14.04% from one year ago while earning asset yields remained stable at 4.54%.
• Non Interest Bearing checking accounts increased $9.2 million to 24.7% of total deposits from one year ago as we attract new customers through unique programs and the convenience of digital banking
• Total revenues increased 10.1% to $5.7 million in 1Q17 from $5.2 million in 1Q16 reflecting balance sheet growth
• Mortgage production volume reached record levels of $56.2 million for 1Q2017 compared to $48.2 million one year ago
• Net interest margin (NIM) was 4.26% as the Company continues to leverage its low cost of funds at 28bp
• Bank Tier 1 Leverage ratio improved to 10.12% from 9.97% a quarter earlier and remains well-capitalized

Review of Income Statement
Net interest income remained relatively flat at $3.4 million compared to a year ago despite increased interest expense of $174,125, associated with the secured loan and subordinated debt used to refinance higher cost Series A and B Preferred stock (TARP) and growth in interest-bearing deposit balances.  The Company continues to leverage its low cost of funds at 28bp.

Noninterest income increased 41.9% to $2.4 million for the first quarter of 2017, compared to $1.7 million for the first quarter 2016.  The increase in noninterest income was largely due to the increase in gains on sales of mortgage loans, growth in service charges on deposit accounts, and growth in debit card income. Mortgage originations from combined retail and correspondent divisions totaled $56.2 million on 291 loans originated as of March 31. 2017 compared to $48.2 million on 267 loans originated one year ago. 

Balance Sheet and Asset Quality
Total assets increased $39.6 million, or 10.4% to $420 million at March 31, 2017, compared to $380.3 million from March 31, 2016.   

Loans receivable grew by $37.4 million, or 14%, at March 31. 2017, compared to $266.6 million, at March 31, 2016 largely due to continued growth in all our markets including commercial portfolio, 1-4 family mortgage portfolio and our consumer loan portfolios.  1-4 Family mortgage portfolio loans are up 96.7% year-over-year and Consumer loans are up 31.2%. We have recruited multiple bankers in the Charleston market from some of the recent bank consolidations and they've been a contributing factor to our additional growth. "Our strategic focus has been on revenue diversification through growth in 1-4 mortgage and consumer loan channels and continued emphasis on small business lending.  We've seen steady growth in these sectors as the economies in our markets improve in job growth, housing sales and new construction and manufacturing growth.  Focus on these sectors allows for better asset yields, improved margins, along with a better diversified loan portfolio which reduces risk," added Saunders  

No-cost/low cost deposits increased by $17.2 million, or 10.2%, to $186 million at March 31, 2017, from $168.7 million at March 31, 2016.  The Company grew household checking accounts by a strong 5.3% year to date as the Company continues to attract new customers through unique programs such as Hometown Heroes, Moms First and iMatter Programs and with its convenient digital banking services including a new mobile mortgage application. "By delivering exceptional customer service we are able to attract new customers primarily through word of mouth from our satisfied and loyal customers resulting in approximately 30% of our new accounts, said Saunders.

Nonperforming assets declined $1.3 million to $4.9 million at March 31, 2017 compared to one year ago.  The ratio of nonperforming assets to total assets declined to 1.16% at March 31, 2017, compared to 1.63% one year earlier.  The allowance for loan losses as a percentage of loans was 0.90% at March 31, 2017, compared to 0.97% one year earlier.  For the first quarter of 2017, loan charge offs were nominal and largely offset by the bank recoveries. 

Capital
First Reliance Bank continues to remain well capitalized under all regulatory measures, with capital ratios exceeding the statutory well-capitalized thresholds by an ample margin.  For the quarter ended December 31, 2016, capital ratios were as follows:

First Reliance's tangible book value was $5.90, at March 31, 2017, up 12% from $5.28, at March 31, 2016.  The Company currently trades at 114.4% of book value as of March 31, 2017.

Providing an incredible experience remains the focus of the bank and the customer satisfaction score of 95%, which is well above bank industry satisfaction scores of 80%, is a strong indication of their commitment to excellence. Customer satisfaction in retail banking in today's world is tied to providing a great digital experience backed by personal service.  First Reliance continues to enhance its online banking services and recently added mobile mortgage application to its digital services. The Bank will expand customer payment systems for both consumer and business customers this year.

First Reliance Bank was named among the top 1% most extraordinary banks in the U.S. by the Institute of Extraordinary Banking.  We are proud of our culture and our associates who are committed to our communities and making the lives of our customers better.

Regional Economic Conditions – April 2017
According to recent reports, South Carolina's economy continues to show positive trends with the unemployment rate 4.3% as of the end of February.   Employment on a year-over-year basis, expanded 1.6 percent, which was on pace with national growth. South Carolina new residential permits in February are up 1.9 percent from the prior month and up 26.8 percent from February 2016 indicating a strong housing demand.  For more information on labor markets, household conditions and housing markets in South Carolina, please visit the link below:
https://www.richmondfed.org/~/media/richmondfedorg/research/regional_economy/reports/snapshot/pdf/snapshot_sc.pdf

First Reliance is headquartered in Florence County, which is a proven, successful location for business and industry and home to over 130 companies that have a manufacturing presence including companies like ESAB, Heinz, Honda, GE Healthcare, Johnson Controls, Monster.com, QVC, Roche, and OTIS Elevator. Florence County is world class, with one of the best business climates in the southeast. It has recently been named among America's top 50 cities for business relocation and expansion by Expansion Management Magazine. The business climate of Florence County has brought more than $1 billion in capital investments in the commercial, industrial, institutional arts sectors in the past eight years alone. The South Carolina Arts Commission has recently named downtown Florence as the newest state-recognized cultural district.

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 130 highly-talented associates and serves the Columbia, Lexington, Charleston, Mount Pleasant, Summerville, Loris, North Myrtle Beach, 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, Mobile mortgage applications, 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%.

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 three and six months ended June 30, 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.

Contact Jeffrey A. Paolucci, Executive Vice President and Chief Financial Officer, (888)543-5510.

Contact: 
Jeffrey A. Paolucci, EVP & CFO
(888) 543-5510
[email protected]

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SOURCE First Reliance Bancshares, Inc.