First Reliance Bancshares Reports Fourth Quarter 2022 Results
FLORENCE, S.C., Feb. 1, 2023 /PRNewswire/ -- First Reliance Bancshares, Inc. (OTC:FSRL), the holding company for First Reliance Bank (collectively, "First Reliance" or the "Company"), today announced its financial results for the fourth quarter of 2022.
Fourth Quarter and Full Year 2022 Highlights
- Net income for the fourth quarter of 2022 increased 60.2% to $1.5 million, or $0.18 per diluted share, compared to $0.9 million, or $0.12 per diluted share, for the fourth quarter of 2021. Net income for the year ended December 31, 2022 was $5.9 million, or $0.73 per diluted share, compared to $5.3 million, or $0.65 per diluted share, for the year ended December 31, 2021.
- Net interest income for the quarter was $7.9 million, which represents a decrease of $0.4 million, or 4.3%, on a linked quarter basis and an increase of $1.3 million, or 19.1% compared to the same period in 2021. Net interest income for the full year was $30.0 million, which represents an increase of $5.3 million, or 21.6%, compared to the same period in 2021.
- Net interest margin compressed during the quarter to 3.68% at December 31, 2022 compared to 3.71% for the third quarter of 2022, but increased 58 basis points compared to the same period in 2021.
- Total loans increased $14.6 million, or 9.0% annualized, to $661.3 million at December 31, 2022 from $646.6 million at September 30, 2022. For the full year 2022, total loans increased $74.8 million, or 12.8%, from $586.4 million at December 31, 2021. Included in the increase in loans for the year was a $22.7 million decrease to $29.6 million at December 31, 2022 from $52.3 million at December 31, 2021 in the bank's indirect auto loan portfolio.
- Total deposits decreased $42.2 million, or 20.1% annualized, to $798.2 million at December 31, 2022 from $840.4 million at September 30, 2022. While we saw declines in deposit balances for the quarter, a significant portion of the decline was in our real estate trust accounts and internal mortgage servicing accounts which regularly fluctuate. For the full year 2022, total deposits increased $17.4 million, or 2.2%, from $780.8 million at December 31, 2021.
- Asset quality improved with nonperforming assets as a percentage of total assets of 0.05% at December 31, 2022 compared to 0.06% at September 30, 2022. The Company had net charge-offs of $85.4 thousand, or annualized 0.05% of average loans during the quarter compared to net charge-offs of $34.0 thousand, or annualized 0.02% of average loans, for the quarter ended September 30, 2022.
- Cost of funds for the fourth quarter of 2022 increased to 0.71% from 0.33% on a linked quarter basis and from 0.23% for the same period in 2021. Cost of funds for the full year of 2022 increased slightly to 0.37% from 0.27% for the year 2021.
Rick Saunders, Chief Executive Officer, remarked: "2022 has brought rapid improvement in our net interest margin, continued successes in moving new client relationships to our Bank, and an extremely tough environment for the mortgage industry. I am very proud of the accomplishments and resiliency of our team.
As we look forward to 2023, we know that rising deposit competition in the short run will pressure some of the gains made in net interest margin during 2022. Our loan portfolio will reprice over the next couple of years, which will help offset funding cost increases. We will continue to focus on improving our cost structure in order to maximize operating leverage as well as ensuring our risk management framework remains robust."
Financial Summary | ||||||||
Three Months Ended | Twelve Months Ended | |||||||
Dec 31 | Sep 30 | Jun 30 | Mar 31 | Dec 31 | Dec 31 | Dec 31 | ||
($ in thousands, except per share data) | 2022 | 2022 | 2022 | 2022 | 2021 | 2022 | 2021 | |
Earnings: | ||||||||
Net income available to common shareholders | $ 1,493 | $ 2,522 | $ 1,064 | $ 852 | $ 932 | $ 5,931 | $ 5,276 | |
Earnings per common share, diluted | 0.18 | 0.31 | 0.13 | 0.11 | 0.12 | 0.73 | 0.65 | |
Total revenue(1) | 9,417 | 11,103 | 9,404 | 9,097 | 9,253 | 39,021 | 38,907 | |
Net interest margin | 3.68 % | 3.71 % | 3.39 % | 3.12 % | 3.10 % | 3.48 % | 3.25 % | |
Return on average assets(2) | 0.65 % | 1.06 % | 0.45 % | 0.37 % | 0.41 % | 0.63 % | 0.64 % | |
Return on average equity(2) | 9.78 % | 15.60 % | 6.60 % | 4.85 % | 5.28 % | 9.11 % | 7.56 % | |
Efficiency ratio(3) | 78.14 % | 69.40 % | 84.49 % | 87.50 % | 88.45 % | 79.37 % | 82.75 % | |
As of | |||||
Dec 31 | Sep 30 | Jun 30 | Mar 31 | Dec 31 | |
(dollars in thousands) | 2022 | 2022 | 2022 | 2022 | 2021 |
Balance Sheet: | |||||
Total assets | $ 937,113 | $ 946,437 | $ 946,853 | $ 953,784 | $ 910,797 |
Total loans receivable | 661,251 | 646,634 | 637,953 | 592,089 | 586,446 |
Total deposits | 798,184 | 840,392 | 830,992 | 837,663 | 780,833 |
Total transaction deposits(4) to total deposits | 51.05 % | 51.42 % | 51.14 % | 52.71 % | 50.19 % |
Loans to deposits | 82.84 % | 76.94 % | 76.77 % | 70.68 % | 75.11 % |
Bank Capital Ratios: | |||||
Total risk-based capital ratio | 13.43 % | 13.47 % | 12.97 % | 13.67 % | 14.07 % |
Tier 1 risk-based capital ratio | 12.43 % | 12.45 % | 11.98 % | 12.65 % | 13.03 % |
Tier 1 leverage ratio | 10.37 % | 9.84 % | 9.66 % | 9.67 % | 9.66 % |
Common equity tier 1 capital ratio | 12.43 % | 12.45 % | 11.98 % | 12.65 % | 13.03 % |
Asset Quality Ratios: | |||||
Nonperforming assets as a percentage of | 0.05 % | 0.06 % | 0.06 % | 0.11 % | 0.10 % |
Allowance for loan losses as a percentage of | 1.16 % | 1.18 % | 1.17 % | 1.22 % | 1.20 % |
Footnotes to table located at the end of this release. | |||||
CONDENSED CONSOLIDATED INCOME STATEMENTS – Unaudited | ||||||||
Three Months Ended | Twelve Months Ended | |||||||
Dec 31 | Sep 30 | Jun 30 | Mar 31 | Dec 31 | Dec 31 | |||
($ in thousands, except per share data) | 2022 | 2022 | 2022 | 2022 | 2021 | 2022 | 2021 | |
Interest income | ||||||||
Loans | $ 7,848 | $ 7,555 | $ 6,781 | $ 6,380 | $ 6,663 | $ 28,565 | $ 25,286 | |
Investment securities | 1,247 | 1,097 | 840 | 571 | 359 | 3,755 | 1,203 | |
Other interest income | 316 | 321 | 176 | 73 | 79 | 886 | 234 | |
Total interest income | 9,411 | 8,973 | 7,797 | 7,024 | 7,101 | 33,206 | 26,723 | |
Interest expense | ||||||||
Deposits | 1,106 | 446 | 212 | 197 | 224 | 1,961 | 1,022 | |
Other interest expense | 417 | 283 | 252 | 252 | 256 | 1,204 | 996 | |
Total interest expense | 1,523 | 729 | 464 | 449 | 480 | 3,165 | 2,018 | |
Net interest income | 7,888 | 8,244 | 7,333 | 6,575 | 6,621 | 30,041 | 24,705 | |
Provision for loan losses | 115 | 170 | 110 | 85 | 95 | 480 | 303 | |
Net interest income after provision for loan | 7,773 | 8,074 | 7,223 | 6,490 | 6,526 | 29,561 | 24,402 | |
Noninterest income | ||||||||
Mortgage banking income | 378 | 1,721 | 897 | 1,420 | 1,407 | 4,416 | 9,531 | |
Service fees on deposit accounts | 330 | 343 | 357 | 362 | 356 | 1,392 | 1,221 | |
Debit card and other service charges, | 500 | 536 | 559 | 498 | 543 | 2,093 | 2,038 | |
Income from bank owned life insurance | 92 | 91 | 89 | 88 | 93 | 360 | 374 | |
Gain on sale of securities, net | - | - | - | - | - | - | 81 | |
Gain on sale of loans | - | - | - | - | - | - | 326 | |
Gain (Loss) on disposal of fixed assets | 24 | (10) | - | 10 | 69 | 23 | 69 | |
Other income | 205 | 178 | 168 | 144 | 164 | 696 | 562 | |
Total noninterest income | 1,529 | 2,859 | 2,070 | 2,522 | 2,632 | 8,980 | 14,202 | |
Noninterest expense | ||||||||
Compensation and benefits | 4,364 | 4,505 | 5,059 | 5,079 | 4,965 | 19,006 | 20,742 | |
Occupancy and equipment | 883 | 923 | 890 | 893 | 862 | 3,589 | 3,221 | |
Data processing, technology, and communications | 878 | 846 | 789 | 837 | 920 | 3,351 | 3,554 | |
Professional fees | 207 | 185 | 180 | 180 | 202 | 751 | 916 | |
Marketing | 279 | 206 | 184 | 74 | 150 | 744 | 419 | |
Other | 748 | 1,040 | 843 | 897 | 1,085 | 3,529 | 3,345 | |
Total noninterest expense | 7,359 | 7,705 | 7,945 | 7,960 | 8,184 | 30,970 | 32,197 | |
Income before provision for income taxes | 1,943 | 3,228 | 1,348 | 1,052 | 974 | 7,571 | 6,407 | |
Income tax expense | 450 | 706 | 284 | 200 | 42 | 1,640 | 1,131 | |
Net income available to common shareholders | $ 1,493 | $ 2,522 | $ 1,064 | $ 852 | $ 932 | $ 5,931 | $ 5,276 | |
Weighted average common shares - basic | 7,775 | 7,777 | 7,782 | 7,784 | 7,785 | 7,779 | 7,749 | |
Weighted average common shares - diluted | 8,152 | 8,073 | 8,094 | 8,100 | 8,096 | 8,127 | 8,142 | |
Basic income per common share | $ 0.19 | $ 0.32 | $ 0.32 | $ 0.14 | $ 0.12 | $ 0.76 | $ 0.68 | |
Diluted income per common share | $ 0.18 | $ 0.31 | $ 0.31 | $ 0.13 | $ 0.12 | $ 0.73 | $ 0.65 | |
Net income for the three months ended December 31, 2022 was $1.5 million, or $0.18 per diluted common share, compared to $0.9 million, or $0.12 per diluted common share, for the three months ended December 31, 2021. Net income for the twelve months ended December 31, 2022 totaled $5.9 million, or $0.73 per diluted common share, compared to $5.3 million, or $0.65 per diluted common share for the twelve months ended December 31, 2021.
Noninterest income for the three months ended December 31, 2022 was $1.5 million, a decrease of $1.1 million from $2.6 million for the same period in 2021. Noninterest income is largely driven by the Company's mortgage banking division, which produced net revenue of $0.4 million during the three months ended December 31, 2022 and $4.4 million during the twelve months ended December 31, 2022. The decrease in mortgage noninterest income is primarily due to a decrease in sales volume compared to the prior year quarter in 2021. Additionally, the Bank has chosen to portfolio select loans out of the higher margin retail channel which has also contributed to reduced gain on sale proceeds.
Noninterest expense for the three months ended December 31, 2022 was $7.4 million, a decrease of $0.8 million from $8.2 million for the same period in 2021. This decrease was primarily driven by a decrease in compensation and benefits data processing, technology, and communications somewhat offset by an increase in marketing expense compared to fourth quarter 2021.
NET INTEREST INCOME AND MARGIN – Unaudited | |||||||
For the Three Months Ended | |||||||
December 31, 2022 | December 31, 2021 | ||||||
Average | Income/ | Yield/ | Average | Income/ | Yield/ | ||
(dollars in thousands) | Balance | Expense | Rate | Balance | Expense | Rate | |
Assets | |||||||
Interest-earning assets | |||||||
Federal funds sold and interest-bearing deposits | $ 33,754 | $ 310 | 3.64 % | $ 170,402 | $ 72 | 0.17 % | |
Investment securities | 158,204 | 1,247 | 3.13 % | 71,327 | 359 | 2.00 % | |
Nonmarketable equity securities | 871 | 6 | 2.82 % | 837 | 7 | 3.44 % | |
Loans held for sale | 4,767 | 83 | 6.91 % | 29,269 | 253 | 3.43 % | |
Loans | 654,285 | 7,765 | 4.71 % | 575,351 | 6,410 | 4.42 % | |
Total interest-earning assets | 851,881 | 9,411 | 4.38 % | 847,186 | 7,101 | 3.33 % | |
Allowance for loan losses | (7,665) | (6,973) | |||||
Noninterest-earning assets | 78,848 | 76,359 | |||||
Total assets | $ 923,064 | $ 916,572 | |||||
Liabilities and Shareholders' Equity | |||||||
Interest-bearing liabilities | |||||||
NOW accounts | $ 146,865 | $ 67 | 0.18 % | $ 143,784 | $ 18 | 0.05 % | |
Savings & money market | 290,709 | 858 | 117.00 % | 267,404 | 86 | 0.13 % | |
Time deposits | 99,847 | 181 | 0.72 % | 129,717 | 120 | 0.37 % | |
Total interest-bearing deposits | 537,421 | 1,106 | 0.82 % | 540,905 | 224 | 0.16 % | |
FHLB advances and other borrowings | 14,330 | 96 | 2.67 % | 17,995 | 47 | 1.05 % | |
Subordinated debentures | 25,687 | 321 | 4.95 % | 25,654 | 209 | 3.23 % | |
Total interest-bearing liabilities | 577,438 | 1,523 | 1.05 % | 584,554 | 480 | 0.33 % | |
Noninterest bearing deposits | 270,975 | 249,831 | |||||
Other liabilities | 13,551 | 11,549 | |||||
Shareholders' equity | 61,100 | 70,638 | |||||
Total liabilities and shareholders' equity | $ 923,064 | $ 916,572 | |||||
Net interest income (tax equivalent) / interest | $ 7,888 | 3.34 % | $ 6,621 | 3.00 % | |||
Net Interest Margin | 3.67 % | 3.10 % | |||||
For the Twelve Months Ended | |||||||
December 31, 2022 | December 31, 2021 | ||||||
Average | Income/ | Yield/ | Average | Income/ | Yield/ | ||
(dollars in thousands) | Balance | Expense | Rate | Balance | Expense | Rate | |
Assets | |||||||
Interest-earning assets | |||||||
Federal funds sold and interest-bearing deposits | $ 81,509 | $ 863 | 1.06 % | $ 139,380 | $ 181 | 0.13 % | |
Investment securities | 145,694 | 3,755 | 2.58 % | 55,480 | 1,203 | 2.17 % | |
Nonmarketable equity securities | 632 | 23 | 3.69 % | 891 | 53 | 5.97 % | |
Loans held for sale | 14,218 | 647 | 4.55 % | 33,296 | 993 | 2.98 % | |
Loans | 622,418 | 27,918 | 4.49 % | 532,090 | 24,293 | 4.57 % | |
Total interest-earning assets | 864,471 | 33,206 | 3.84 % | 761,137 | 26,723 | 3.51 % | |
Allowance for loan losses | (7,415) | (6,602) | |||||
Noninterest-earning assets | 80,187 | 74,896 | |||||
Total assets | $ 937,243 | $ 829,431 | |||||
Liabilities and Shareholders' Equity | |||||||
Interest-bearing liabilities | |||||||
NOW accounts | $ 158,135 | $ 136 | 0.09 % | $ 133,350 | $ 62 | 0.05 % | |
Savings & money market | 289,213 | 1,364 | 0.47 % | 225,021 | 350 | 0.16 % | |
Time deposits | 110,028 | 461 | 0.42 % | 134,582 | 610 | 0.45 % | |
Total interest-bearing deposits | 557,376 | 1,961 | 0.35 % | 492,953 | 1,022 | 0.21 % | |
FHLB advances and other borrowings | 13,367 | 131 | 0.98 % | 17,748 | 188 | 1.06 % | |
Subordinated debentures | 25,675 | 1,073 | 4.18 % | 21,351 | 808 | 3.79 % | |
Total interest-bearing liabilities | 596,418 | 3,165 | 0.53 % | 532,052 | 2,018 | 0.38 % | |
Noninterest bearing deposits | 263,085 | 216,697 | |||||
Other liabilities | 12,656 | 10,910 | |||||
Shareholders' equity | 65,084 | 69,772 | |||||
Total liabilities and shareholders' equity | $ 937,243 | $ 829,431 | |||||
Net interest income (tax equivalent) / interest | $ 30,041 | 3.31 % | $ 24,705 | 3.13 % | |||
Net Interest Margin | 3.48 % | 3.25 % | |||||
Net interest income for the three months ended December 31, 2022 was $7.9 million compared to $6.6 million for the three months ended December 31, 2021. This increase was primarily driven by an increase in interest-earning assets, as well as an increase in interest rates. Yield on interest-earning assets increased to 4.38% for the three months ended December 31, 2022 from 3.33% for the same period in 2021.
Net interest income was $30.0 million for the twelve months ended December 31, 2022, an increase of $5.3 million over the same period in 2021. Increases in average loans and investments contributed to a majority of the increase in net interest income somewhat offset by an increase in yield on interest bearing liabilities.
CONDENSED CONSOLIDATED BALANCE SHEETS – Unaudited | |||||
As of | |||||
Dec 31 | Sep 30 | Jun 30 | Mar 31 | Dec 31 | |
(dollars in thousands) | 2022 | 2022 | 2022 | 2022 | 2021 |
Assets | |||||
Cash and cash equivalents: | |||||
Cash and due from banks | $ 3,917 | $ 4,147 | $ 7,702 | $ 4,672 | $ 5,299 |
Interest-bearing deposits with banks | 29,880 | 60,537 | 45,683 | 116,192 | 144,825 |
Total cash and cash equivalents | 33,797 | 64,684 | 53,385 | 120,864 | 150,124 |
Time deposits in other banks | 259 | 259 | 257 | 257 | 257 |
Investment securities: | |||||
Investment securities available for sale | 162,097 | 160,504 | 164,440 | 144,422 | 81,917 |
Other investments | 1,921 | 658 | 657 | 521 | 837 |
Total investment securities | 164,018 | 161,162 | 165,097 | 144,943 | 82,754 |
Mortgage loans held for sale | 7,940 | 4,599 | 19,648 | 23,528 | 23,844 |
Loans receivable: | |||||
Loans | 661,251 | 646,634 | 637,953 | 592,089 | 586,446 |
Less allowance for loan losses | (7,660) | (7,630) | (7,494) | (7,206) | (7,040) |
Loans receivable, net | 653,591 | 639,004 | 630,459 | 584,883 | 579,406 |
Property and equipment, net | 22,811 | 22,868 | 23,100 | 23,222 | 22,805 |
Mortgage servicing rights | 10,441 | 10,182 | 14,893 | 14,536 | 14,057 |
Bank owned life insurance | 18,836 | 18,744 | 18,653 | 18,564 | 18,476 |
Deferred income taxes | 8,629 | 8,629 | 7,376 | 5,862 | 4,128 |
Other assets | 16,791 | 16,306 | 13,985 | 17,125 | 14,946 |
Total assets | 937,113 | 946,437 | 946,853 | 953,784 | 910,797 |
Liabilities | |||||
Deposits | $ 798,184 | $ 840,392 | $ 830,992 | $ 837,663 | $ 780,833 |
Federal Home Loan Bank advances | 30,000 | - | - | - | 10,000 |
Federal funds and repurchase agreements | 7,368 | 3,726 | 13,805 | 11,886 | 11,372 |
Subordinated debentures | 15,381 | 15,373 | 15,365 | 15,357 | 15,349 |
Junior subordinated debentures | 10,310 | 10,310 | 10,310 | 10,310 | 10,310 |
Other liabilities | 12,574 | 14,472 | 12,412 | 11,937 | 12,131 |
Total liabilities | 873,817 | 884,273 | 882,884 | 887,153 | 839,995 |
Shareholders' equity | |||||
Preferred stock - Series D non-cumulative, no par | 1 | 1 | 1 | 1 | 1 |
Common Stock - $.01 par value; 20,000,000 shares | 87 | 88 | 88 | 88 | 88 |
Treasury stock, at cost | (4,502) | (4,364) | (4,333) | (4,419) | (4,323) |
Nonvested restricted stock | (2,121) | (2,291) | (2,500) | (2,572) | (2,668) |
Additional paid-in capital | 53,968 | 54,013 | 54,088 | 53,980 | 53,856 |
Retained earnings | 29,916 | 28,423 | 25,901 | 24,837 | 23,985 |
Accumulated other comprehensive (loss) income | (14,053) | (13,706) | (9,276) | (5,284) | (137) |
Total shareholders' equity | 63,296 | 62,164 | 63,969 | 66,631 | 70,802 |
Total liabilities and shareholders' equity | $ 937,113 | $ 946,437 | $ 946,853 | $ 953,784 | $ 910,797 |
COMMON STOCK SUMMARY - Unaudited | |||||
As of | |||||
Dec 31 | Sep 30 | Jun 30 | Mar 31 | Dec 31 | |
(shares in thousands) | 2022 | 2022 | 2022 | 2022 | 2021 |
Voting common shares outstanding | 8,730 | 8,793 | 8,801 | 8,782 | 8,793 |
Treasury shares outstanding | (590) | (575) | (571) | (545) | (535) |
Total common shares outstanding | 8,140 | 8,218 | 8,230 | 8,237 | 8,258 |
Tangible book value per common share(5) | $ 7.67 | $ 7.46 | $ 7.66 | $ 7.98 | $ 8.46 |
Stock price: | |||||
High | $ 9.50 | $ 9.40 | $ 9.85 | $ 10.20 | $ 10.74 |
Low | $ 8.60 | $ 9.00 | $ 9.25 | $ 9.75 | $ 9.95 |
Period end | $ 8.72 | $ 9.14 | $ 9.25 | $ 9.85 | $ 10.20 |
ASSET QUALITY MEASURES – Unaudited | |||||
As of | |||||
Dec 31 | Sep 30 | Jun 30 | Mar 31 | Dec 31 | |
(dollars in thousands) | 2022 | 2022 | 2022 | 2022 | 2021 |
Nonperforming Assets | |||||
Commercial | |||||
Owner occupied RE | $ 134 | $ 135 | $ 140 | $ 144 | $ 152 |
Non-owner occupied RE | - | - | - | 295 | - |
Construction | - | - | - | - | - |
Commercial business | 76 | 146 | 81 | - | - |
Consumer | |||||
Real estate | 1 | 2 | 3 | 343 | 341 |
Home equity | - | - | - | - | - |
Construction | - | - | - | - | - |
Other | 119 | 130 | 160 | 104 | 84 |
Nonaccruing troubled debt restructurings | 143 | 160 | 173 | 190 | 205 |
Total nonaccrual loans | $ 473 | $ 573 | $ 557 | $ 1,076 | $ 782 |
Other real estate owned | - | - | - | - | 135 |
Total nonperforming assets | $ 473 | $ 573 | $ 557 | $ 1,076 | $ 917 |
Nonperforming assets as a percentage of: | |||||
Total assets | 0.05 % | 0.06 % | 0.06 % | 0.11 % | 0.10 % |
Total loans receivable | 0.07 % | 0.09 % | 0.09 % | 0.18 % | 0.16 % |
Accruing troubled debt restructurings | $ 1,151 | $ 1,312 | $ 1,349 | $ 1,393 | $ 1,405 |
Three Months Ended | |||||
Dec 31 | Sep 30 | Jun 30 | Mar 31 | Dec 31 | |
(dollars in thousands) | 2022 | 2022 | 2022 | 2022 | 2021 |
Allowance for Loan Losses | |||||
Balance, beginning of period | $ 7,630 | $ 7,494 | $ 7,206 | $ 7,040 | $ 6,934 |
Loans charged-off | 101 | 76 | 11 | 19 | 5 |
Recoveries of loans previously charged-off | 16 | 42 | 189 | 100 | 16 |
Net charge-offs (recoveries) | 85 | 34 | (178) | (81) | (11) |
Provision for loan losses | 115 | 170 | 110 | 85 | 95 |
Balance, end of period | $ 7,660 | $ 7,630 | $ 7,494 | $ 7,206 | $ 7,040 |
Allowance for loan losses to gross loans receivable | 1.16 % | 1.18 % | 1.17 % | 1.22 % | 1.20 % |
Allowance for loan losses to nonaccrual loans | 1619.45 % | 1331.59 % | 1345.42 % | 669.70 % | 900.26 % |
Footnotes to table located at the end of this release. | |||||
Our asset quality improved through December 31, 2022, with nonperforming assets decreasing $100 thousand to $0.5 million, which represents 0.05% of total assets, compared to $0.6 million or 0.06% of total assets at September 30, 2022. The allowance for loan losses as a percentage of total loans receivable decreased to 1.16% at December 31, 2022, compared to 1.18% at September 30, 2022. The Company had net charge-offs of $85 thousand for the three months ended December 31, 2022 compared to net recoveries of $11 thousand for the same period in 2021.
LOAN COMPOSITION – Unaudited | |||||
As of | |||||
Dec 31 | Sep 30 | Jun 30 | Mar 31 | Dec 31 | |
(dollars in thousands) | 2022 | 2022 | 2022 | 2022 | 2021 |
Commercial real estate | $ 391,661 | $ 378,589 | $ 368,316 | $ 334,508 | $ 333,060 |
Consumer real estate | 151,533 | 147,110 | 142,711 | 123,908 | 120,079 |
Commercial and industrial | 69,243 | 67,200 | 67,239 | 66,285 | 60,687 |
Consumer and other | 48,814 | 53,735 | 59,687 | 67,388 | 72,620 |
Total loans, net of deferred fees | 661,251 | 646,634 | 637,953 | 592,089 | 586,446 |
Less allowance for loan losses | 7,660 | 7,630 | 7,494 | 7,206 | 7,040 |
Total loans, net | $ 653,591 | $ 639,004 | $ 630,459 | $ 584,883 | $ 579,406 |
DEPOSIT COMPOSITION – Unaudited | |||||
As of | |||||
Dec 31 | Sep 30 | Jun 30 | Mar 31 | Dec 31 | |
(dollars in thousands) | 2022 | 2022 | 2022 | 2022 | 2021 |
Noninterest-bearing | $ 255,427 | $ 277,587 | $ 265,049 | $ 273,118 | $ 238,019 |
Interest-bearing: | |||||
DDA and NOW accounts | 152,012 | 154,550 | 159,939 | 168,401 | 153,889 |
Money market accounts | 221,550 | 232,711 | 230,840 | 217,812 | 204,432 |
Savings | 65,494 | 71,929 | 66,727 | 61,246 | 58,566 |
Time, less than $250,000 | 80,549 | 76,530 | 78,735 | 84,874 | 99,059 |
Time, $250,000 and over | 23,152 | 27,085 | 29,702 | 32,212 | 26,868 |
Total deposits | $ 798,184 | $ 840,392 | $ 830,992 | $ 837,663 | $ 780,833 |
Footnotes to tables: | |
(1) | Total revenue is the sum of net interest income and noninterest income. |
(2) | Annualized for the respective period. |
(3) | Noninterest expense divided by the sum of net interest income and noninterest income. |
(4) | Includes noninterest-bearing and interest-bearing DDA and NOW accounts. |
(5) | 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. (OTC: FSRL.OB), is based in Florence, South Carolina and has assets of approximately $937 million. The company employs more than 180 professionals and has locations throughout South Carolina and central North 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 93% customer satisfaction rating well above the bank industry average of 81%. First Reliance is also one of two companies throughout South Carolina to receive the Best Places to Work in South Carolina award all 17 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 loan losses; (3) the rate of delinquencies and amounts of charge-offs, the level of allowance for loan 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 Covid-19 or 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.
Contact:
Robert Haile
SEVP & Chief Financial Officer
(843) 656-5000
[email protected]
SOURCE First Reliance Bancshares
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