First Reliance Bancshares Reports Third Quarter 2025 Results

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Oct 24, 2025, 09:00 ET

FLORENCE, S.C., Oct. 24, 2025 /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 third quarter of 2025.

Third Quarter 2025 Highlights

Net income increased 48.8% for the third quarter of 2025 to $2.7 million, or $0.33 per diluted share, compared to $1.8 million, or $0.22 per diluted share, for the third quarter of 2024. For the nine months ended September 30, 2025, net income totaled $8.0 million, or $0.96 per diluted share, compared to $5.0 million, or $0.61 per diluted share for the same period in 2024. Operating earnings (Non-GAAP) increased 39.2% for the third quarter of 2025 to $2.7 million, or $0.33 per diluted share, compared to $2.0 million, or $0.24 per diluted share, for the third quarter of 2024. For the nine months ended September 30, 2025, operating earnings (Non-GAAP) totaled $6.6 million or $0.79 per diluted share, compared to $5.1 million, or $0.63 per diluted share, for the comparable period of 2024.
Book value per share increased $1.44, or 14.4%, from $9.98 per share at September 30, 2024, to $11.42 per share at September 30, 2025. Tangible book value per share (Non-GAAP) increased $1.44, or 14.6%, from $9.89 per share at September 30, 2024, to $11.33 per share at September 30, 2025.
Net interest income for the third quarter of 2025 was $9.5 million, which represents an increase of $1.3 million, or 16.7%, compared to the same quarter one year ago. Compared to the second quarter of 2025, the increase was $344,000, or 3.8%.
Net interest margin increased during the third quarter of 2025 to 3.66%, compared to 3.53% in the second quarter of 2025, and increased 39 basis points compared to the third quarter of 2024.
The third quarter of 2025 efficiency ratio improved to 69.61% down from 76.90% one year ago. The adjusted efficiency ratio (Non-GAAP) improved from 72.82% in the third quarter of 2024 to 69.61% in the third quarter of 2025.
Total loans held for investment decreased $4.8 million, or 2.4% annualized, to $780.0 million at September 30, 2025, from $784.7 million at June 30, 2025. This decrease was the result of the decline in the loan portfolio associated with the North Carolina branches (deposits and locations sold in the second quarter of 2025), which totaled approximately $9.8 million.
Total deposits increased $9.0 million, or 3.8% annualized, to $959.3 million at September 30, 2025, from $950.3 million at June 30, 2025.
Asset quality remains strong. Nonperforming assets increased to $369 thousand, or 0.03% of total assets at September 30, 2025, compared to $205 thousand, or 0.02% of total assets at June 30, 2025. This increase was related to one mortgage loan that is fully collateralized.
In June 2025, the Company's Board approved a stock repurchase program authorizing the purchase of up to $3.0 million of outstanding common stock through expiration of the program on June 30, 2026. The repurchase program does not obligate the Company to purchase any particular number of shares and may be modified or terminated by the Company's Board of Directors at any time. During the third quarter of 2025, the Company repurchased 122,316 shares at a weighted-average cost per share of $9.71.

Rick Saunders, Chief Executive Officer, commented, "Operating earnings per share improved 22%, in the third quarter of 2025, from the second quarter of 2025. Our net interest margin increased 13 basis points and our adjusted efficiency ratio improved to 69.6%. Tangible book value per share grew by $1.44 per share over the past year to $11.33, an increase of 14.6%. We grew deposit balances by $9.0 million, or 3.8% annualized. Loan growth remained muted in the third quarter of 2025, primarily from the loans paid down and paid off associated with the sale of the North Carolina branches. Credit quality remains strong with low nonperforming assets and low net charge offs. Our return on average tangible equity was 10.83% thus far in 2025, excluding nonrecurring items. Our bankers and teams are executing high quality service for our customers through relationship banking throughout our markets in South Carolina."

Financial Summary

	Three Months Ended					Nine Months Ended
	Sep 30	Jun 30	Mar 31	Dec 31	Sep 30	Sep 30	Sep 30
($ in thousands, except per share data)	2025	2025	2025	2024	2024	2025	2024
Earnings:
Net income available to common shareholders	$ 2,714	$ 3,653	$ 1,613	$ 918	$ 1,825	$ 7,980	$ 5,005
Operating earnings (Non-GAAP)	2,714	2,248	1,665	1,698	1,950	6,627	5,130
Earnings per common share, diluted (GAAP)	0.33	0.44	0.19	0.11	0.22	0.96	0.61
Operating earnings per common share, diluted (Non-GAAP)	0.33	0.27	0.20	0.21	0.24	0.79	0.63
Total revenue⁽¹⁾	12,238	13,920	11,158	9,809	9,855	37,316	29,771
Net interest margin	3.66 %	3.53 %	3.49 %	3.38 %	3.27 %	3.58 %	3.20 %
Return on average assets⁽²⁾	0.99 %	1.32 %	0.59 %	0.35 %	0.69 %	0.97 %	0.65 %
Return on average assets - Operating Non-GAAP⁽²⁾	0.99 %	0.81 %	0.61 %	0.64 %	0.74 %	0.81 %	0.66 %
Return on average equity⁽²⁾	12.55 %	17.84 %	8.15 %	4.66 %	9.60 %	12.93 %	9.16 %
Return on average equity - Operating Non-GAAP⁽²⁾	12.55 %	10.98 %	8.41 %	8.62 %	10.26 %	10.74 %	9.39 %
Efficiency ratio⁽³⁾	69.61 %	64.61 %	75.52 %	86.42 %	76.90 %	69.51 %	77.67 %
Adjusted efficiency ratio - Non-GAAP⁽³⁾	69.61 %	74.03 %	75.04 %	78.29 %	75.66 %	72.82 %	77.25 %

	As of
	Sep 30	Jun 30	Mar 31	Dec 31	Sep 30
($ in thousands)	2025	2025	2025	2024	2024
Balance Sheet:
Total assets	$ 1,097,846	$ 1,102,203	$ 1,097,389	$ 1,067,104	$ 1,071,480
Total loans receivable	779,997	784,749	784,469	753,738	739,219
Total deposits	959,300	950,339	978,667	951,411	951,948
Total transaction deposits⁽⁴⁾ to total deposits	40.68 %	39.50 %	39.46 %	38.64 %	38.82 %
Loans to deposits	81.31 %	82.58 %	80.16 %	79.22 %	77.65 %
Bank Capital Ratios:
Total risk-based capital ratio	13.58 %	12.88 %	12.99 %	13.48 %	13.56 %
Tier 1 risk-based capital ratio	12.48 %	11.84 %	11.92 %	12.43 %	12.51 %
Tier 1 leverage ratio	9.94 %	9.74 %	9.80 %	9.96 %	9.87 %
Common equity tier 1 capital ratio	12.48 %	11.84 %	11.92 %	12.43 %	12.51 %
Asset Quality Ratios:
Nonperforming assets as a percentage of total assets	0.03 %	0.02 %	0.09 %	0.11 %	0.09 %
Allowance for credit losses as a percentage of total loans receivable	1.12 %	1.09 %	1.10 %	1.12 %	1.13 %
Annualized net charge-offs as a percentage of average total loan receivables	0.02 %	0.03 %	0.08 %	0.00 %	0.03 %

CONDENSED CONSOLIDATED INCOME STATEMENTS – Unaudited

	Three Months Ended					Nine Months Ended
	Sep 30	Jun 30	Mar 31	Dec 31	Sep 30	Sep 30
($ in thousands, except per share data)	2025	2025	2025	2024	2024	2025	2024
Interest income
Loans	$ 11,842	$ 11,657	$ 11,293	$ 11,053	$ 10,930	$ 34,792	$ 31,761
Investment securities	2,300	2,145	2,166	2,015	1,969	6,611	5,816
Other interest income	323	505	318	512	623	1,146	1,333
Total interest income	14,465	14,307	13,777	13,580	13,522	42,549	38,910
Interest expense
Deposits	4,536	4,703	4,468	4,613	4,833	13,707	13,817
Other interest expense	476	495	544	564	585	1,515	2,115
Total interest expense	5,012	5,198	5,012	5,177	5,418	15,222	15,932
Net interest income	9,453	9,109	8,765	8,403	8,104	27,327	22,978
Provision for credit (recovery of) losses	90	88	707	141	(83)	885	179
Net interest income after provision for credit losses	9,363	9,021	8,058	8,262	8,187	26,442	22,799
Noninterest income
Mortgage banking income	1,577	1,586	1,351	1,207	805	4,514	3,596
Service fees on deposit accounts	412	299	319	327	327	1,030	970
Debit card and other service charges, commissions, and fees	531	543	529	550	528	1,603	1,615
Income from bank owned life insurance	108	104	102	108	105	314	310
Loss on sale of securities, net	-	-	(182)	(146)	(162)	(182)	(162)
Gain on sale of branches	-	2,313	-	-	-	2,313	-
Gain on early extinguishment of debt	-	-	140	-	-	140	-
Gain (loss) on disposal /write down of fixed assets	-	(200)	-	(838)	-	(200)	20
Other income	157	166	134	198	148	457	444
Total noninterest income	2,785	4,811	2,393	1,406	1,751	9,989	6,793
Noninterest expense
Compensation and benefits	5,431	5,574	5,281	5,028	4,682	16,286	14,253
Occupancy and equipment	736	770	791	890	848	2,297	2,526
Data processing, technology, and communications	1,061	1,143	1,156	1,184	994	3,360	3,152
Professional fees	195	248	153	268	265	596	471
Marketing	155	175	123	103	66	453	328
Other	941	1,083	923	1,003	723	2,947	2,393
Total noninterest expense	8,519	8,993	8,427	8,476	7,578	25,939	23,123
Income before provision for income taxes	3,629	4,839	2,024	1,192	2,360	10,492	6,469
Income tax expense	915	1,186	411	273	535	2,512	1,464
Net income available to common shareholders	$ 2,714	$ 3,653	$ 1,613	$ 919	$ 1,825	$ 7,980	$ 5,005
Addback loss on fixed assets, net of tax	-	151	-	646	-	151	-
Subtract gain on sale of branches, net of tax	-	(1,746)	-	-	-	(1,746)	-
Subtract gain on early extinguishment of debt, net of tax	-	-	(111)	-	-	(111)	-
Addback expenses related to branch sale, net of tax	-	190	18	21	-	208	-
Addback securities losses, net of tax	-	-	145	113	125	145	125
Operating net income (non-GAAP)	2,714	2,248	1,665	1,699	1,950	6,627	5,130
Weighted average common shares - basic	7,902	7,892	7,868	7,851	7,847	7,887	7,845
Weighted average common shares - diluted	8,349	8,350	8,331	8,274	8,221	8,344	8,255
Basic net income per common share*	$ 0.34	$ 0.46	$ 0.21	$ 0.21	$ 0.23	$ 1.01	$ 0.64
Diluted net income per common share*	$ 0.33	$ 0.44	$ 0.19	$ 0.11	$ 0.22	$ 0.96	$ 0.61
Operating basic net income per common share (non-GAAP)*	$ 0.34	$ 0.28	$ 0.21	$ 0.22	$ 0.25	$ 0.84	$ 0.66
Operating diluted net income per common share (non-GAAP)*	$ 0.33	$ 0.27	$ 0.20	$ 0.21	$ 0.24	$ 0.79	$ 0.63

*Note that the sum of the quarter may not equal the YTD result due to rounding of earnings per share each quarter, given the weighted average shares outstanding basic and diluted.

Footnotes to table located at the end of this release.

Net income for the three months ended September 30, 2025, was $2.7 million, or $0.33 per diluted common share, compared to $1.8 million, or $0.22 per diluted common share, for the three months ended September 30, 2024. Operating net income (Non-GAAP), for the three months ended September 30, 2025, was $2.7 million, or $0.33 per diluted common share, compared to $2.0 million, or $0.24 per diluted common share for the three months ended September 30, 2024. Net income for the nine months ended September 30, 2025, totaled $8.0 million, or $0.96 per diluted common share, compared to $5.0 million, or $0.61 per diluted common share for the comparable period of 2024. On an operating basis, diluted EPS (Non-GAAP) was $0.79 per diluted common share, for the nine months ended September 30, 2025, which includes adding back the impact of securities losses, net of tax, the impact of fixed asset write downs, net of tax, and the impact of expenses related to the branch sales, net of tax, offset by subtracting the gain recognized on the sale of branches, net of tax and the gain from the early extinguishment of debt, net of tax, compared to $0.63 per diluted common share, for the nine months ended September 30, 2024.

Noninterest income, for the three months ended September 30, 2025, was $2.8 million, an increase of $1.0 million from $1.8 million for the same period in 2024. Noninterest income was primarily driven by mortgage banking income and totaled $1.6 million in the third quarter of 2025 compared to $805 thousand in the third quarter of 2024. In addition, all of the other categories of noninterest income increased.

For the nine months ended September 30, 2025, noninterest income increased by $3.2 million, driven by improved mortgage banking income of $918 thousand, gain on sale of branches of $2.3 million, and gain on the early extinguishment of debt of $140 thousand. These improvements were partially offset by the write down of fixed assets of $200 thousand, compared to a $20 thousand gain in the same period of 2024.

Noninterest expense, for the three months ended September 30, 2025, was $8.5 million, an increase of $941 thousand from $7.6 million for the same period in 2024. This increase in expense was primarily driven by an increase in compensation and benefits of $749 thousand due primarily to mortgage commissions, salaries and stock compensation expense, and $218 thousand in other expense primarily associated with costs related ATM and debit card losses, a contract cancellation and receipt of lawsuit settlement in 2024.

Noninterest expense, for the nine months ended September 30, 2025, was $25.9 million and increased $2.8 million from the same period in 2024. This increase in noninterest expense was primarily related to compensation and benefits of $2.0 million attributable to salaries, mortgage commissions and stock compensation expense, an increase in professional fees of $125 thousand related to audit expense associated with FDICIA compliance, an increase in marketing of $125 thousand, and $554 thousand increase in other expense, which includes $336 thousand associated with costs related to the sale of the two branches in North Carolina.

There were no operating adjustments in 3Q 2025.

Operating adjustments – 2Q 2025

During the second quarter of 2025, the Company sold the two North Carolina locations to Carter Bank from Virginia. This sale resulted in a gain of $2.3 million on the deposits assumed by Carter Bank, before expenses. Expenses directly related to the branches sold totaled $252 thousand in the second quarter of 2025. Operating net income reflects the removal of these two items. Total deposits assumed by Carter Bank were $55.9 million. No loans were acquired in this transaction by Carter Bank.

Additionally, the Company wrote down a parcel of land in North Charleston by $200 thousand. This parcel remains for sale. Operating net income reflects the add back of this item, net of tax, totaling $151 thousand.

Operating adjustments - 1Q 2025

During the first quarter of 2025, the Company recorded the following non-recurring transactions:

Paid off subordinated indebtedness of $1.0 million with $860 thousand, resulting in a pre-tax gain of $140 thousand,
Recorded pre-tax securities losses of $182 thousand, and
Recorded pre-tax branch disposal related costs of $23 thousand.

NET INTEREST INCOME AND MARGIN – Unaudited - QTD

	For the Three Months Ended
	September 30, 2025			June 30, 2025			September 30, 2024
	Average	Income/	Yield/	Average	Income/	Yield/	Average	Income/	Yield/
($ in thousands)	Balance	Expense	Rate	Balance	Expense	Rate	Balance	Expense	Rate
Assets
Interest-earning assets
Federal funds sold and interest- bearing deposits	$ 35,237	$ 296	3.33 %	$ 46,216	$ 478	4.15 %	$ 50,030	$ 588	4.68 %
Investment securities	193,519	2,300	4.72 %	186,573	2,145	4.61 %	173,728	1,969	4.51 %
Nonmarketable equity securities	1,795	26	5.84 %	1,665	28	6.65 %	1,509	35	9.19 %
Loans held for sale	12,381	301	9.65 %	16,269	353	8.70 %	21,629	347	6.38 %
Loans	780,426	11,541	5.87 %	783,489	11,304	5.79 %	737,666	10,583	5.71 %
Total interest-earning assets	1,023,358	14,465	5.61 %	1,034,212	14,307	5.55 %	984,562	13,522	5.46 %
Allowance for credit losses	(8,508)			(8,652)			(8,491)
Noninterest-earning assets	80,739			80,987			78,402
Total assets	$ 1,095,588			$ 1,106,547			$ 1,054,473

Liabilities and Shareholders' Equity
Interest-bearing liabilities
NOW accounts	$ 123,107	$ 230	0.74 %	$ 158,726	$ 242	0.61 %	$ 138,726	$ 236	0.68 %
Savings & money market	410,051	2,893	2.80 %	435,548	3,127	2.88 %	384,155	2,941	3.05 %
Time deposits	168,116	1,413	3.33 %	158,378	1,334	3.38 %	175,921	1,656	3.74 %
Total interest-bearing deposits	701,274	4,536	2.57 %	752,652	4,703	2.51 %	698,802	4,833	2.75 %
FHLB advances and other borrowings	20,652	217	4.17 %	17,913	191	4.29 %	15,979	226	5.63 %
Subordinated debentures	19,775	259	5.19 %	23,228	304	5.25 %	25,743	359	5.55 %
Total interest-bearing liabilities	741,701	5,012	2.68 %	793,793	5,198	2.63 %	740,524	5,418	2.91 %
Noninterest bearing deposits	253,702			217,979			224,121
Other liabilities	13,666			12,885			13,807
Shareholders' equity	86,519			81,890			76,021
Total liabilities and shareholders' equity	$ 1,095,588			$ 1,106,547			$ 1,054,473

Net interest income (tax equivalent) / interest rate spread		$ 9,453	2.93 %		$ 9,109	2.92 %		$ 8,104	2.55 %
Net Interest Margin			3.66 %			3.53 %			3.27 %

Cost of funds, including noninterest-bearing deposits			2.00 %			2.06 %			2.23 %

Net interest income, for the three months ended September 30, 2025, was $9.5 million compared to $8.1 million for the three months ended September 30, 2024. This increase was the result of an increase in interest income of $943 thousand and a decrease in interest expense of $406 thousand. This resulted in an improved net interest margin to 3.66% from 3.27% one year ago. Loans and securities had the largest gains in income and in yields compared to the prior year, partially offset by interest- bearing cash and fed funds sold and nonmarketable equity securities. While lower yields in all categories of interest-bearing liabilities, except NOW accounts, contributed to the improved net interest margin. In addition, the total cost of funds, including noninterest-bearing deposits, decreased to 2.00% in the third quarter of 2025, compared to 2.23% in the third quarter of 2024.

NET INTEREST INCOME AND MARGIN – Unaudited - YTD

	For the Nine Months Ended
	September 30, 2025			September 30, 2024
	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	$ 37,905	$ 1,066	3.76 %	$ 36,339	$ 1,233	4.53 %
Investment securities	186,815	6,611	4.73 %	170,643	5,816	4.55 %
Nonmarketable equity securities	1,716	80	6.24 %	1,897	100	7.02 %
Loans held for sale	16,065	1,018	8.47 %	20,563	1,047	6.80 %
Loans	777,837	33,774	5.81 %	728,337	30,714	5.63 %
Total interest-earning assets	1,020,339	42,549	5.58 %	957,779	38,910	5.43 %
Allowance for credit losses	(8,564)			(8,464)
Noninterest-earning assets	80,756			79,272
Total assets	$ 1,092,531			$ 1,028,587

Liabilities and Shareholders' Equity
Interest-bearing liabilities
NOW accounts	$ 142,638	$ 702	0.66 %	$ 140,904	$ 774	0.73 %
Savings & money market	421,621	8,892	2.82 %	362,942	8,097	2.98 %
Time deposits	161,259	4,113	3.41 %	176,586	4,946	3.74 %
Total interest-bearing deposits	725,518	13,707	2.53 %	680,432	13,817	2.71 %
FHLB advances and other borrowings	19,407	622	4.28 %	24,322	1,019	5.59 %
Subordinated debentures	22,649	893	5.27 %	25,735	1,096	5.69 %
Total interest-bearing liabilities	767,574	15,222	2.65 %	730,489	15,932	2.91 %
Noninterest bearing deposits	229,737			211,620
Other liabilities	12,922			13,639
Shareholders' equity	82,298			72,839
Total liabilities and shareholders' equity	$ 1,092,531			$ 1,028,587

Net interest income (tax equivalent) / interest rate spread		$ 27,327	2.93 %		$ 22,978	2.52 %
Net Interest Margin			3.58 %			3.20 %

Cost of funds, including noninterest bearing deposits			2.04 %			2.26 %

Net interest income for the nine months ended September 30, 2025, totaled $27.3 million compared to $23.0 million for the nine months ended September 30, 2024, an increase of $4.3 million. The net interest margin was 3.58% for the first nine months of 2025 compared to 3.20% for the same period in 2024. The yield on interest-earning assets improved by 14 basis points to 5.57%, led by loans and investment securities. Yields on all interest-bearing liabilities have also declined in all categories, with total yield on interest-bearing liabilities declining by 26 basis points. The total cost of funds, including noninterest-bearing deposits was 2.04% compared to 2.26% in 2024.

CONDENSED CONSOLIDATED BALANCE SHEETS – Unaudited

	As of
	Sep 30	Jun 30	Mar 31	Dec 31	Sep 30
($ in thousands)	2025	2025	2025	2024	2024
Assets
Cash and cash equivalents:
Cash and due from banks	$ 5,072	$ 4,066	$ 5,011	$ 4,604	$ 4,730
Interest-bearing deposits with banks	26,695	29,487	32,922	42,623	61,934
Total cash and cash equivalents	31,767	33,553	37,933	47,227	66,664
Investment securities:
Investment securities available for sale	199,674	194,136	181,596	175,846	177,641
Other investments	1,527	2,497	950	886	883
Total investment securities	201,201	196,633	182,546	176,732	178,524
Mortgage loans held for sale	13,336	14,944	22,424	20,974	19,929
Loans receivable:
Loans	779,997	784,749	784,469	753,738	739,219
Less allowance for credit losses	(8,741)	(8,535)	(8,654)	(8,434)	(8,317)
Loans receivable, net	771,256	776,214	775,815	745,304	730,902
Property and equipment, net	23,313	22,469	21,987	21,353	21,861
Mortgage servicing rights	14,421	14,093	13,614	13,410	12,690
Bank owned life insurance	18,922	18,815	18,710	18,608	18,501
Deferred income taxes	6,221	6,510	6,938	7,709	6,292
Other assets	17,409	18,972	17,422	15,787	16,117
Total assets	1,097,846	1,102,203	1,097,389	1,067,104	1,071,480
Liabilities
Deposits	$ 959,300	$ 950,339	$ 978,667	$ 951,411	$ 951,948
Federal Home Loan Bank advances	15,000	32,500	-	-	-
Federal funds and repurchase agreements	-	207	-	-	-
Subordinated debentures	9,469	9,461	14,453	15,444	15,436
Junior subordinated debentures	10,310	10,310	10,310	10,310	10,310
Reserve for unfunded commitments	767	925	771	428	410
Other liabilities	13,498	12,560	11,972	11,755	12,866
Total liabilities	1,008,344	1,016,302	1,016,173	989,348	990,970
Shareholders' equity
Preferred stock - Series D non-cumulative, no par value	1	1	1	1	1
Common Stock - $.01 par value; 20,000,000 shares authorized	88	88	88	88	88
Treasury stock, at cost	(7,883)	(6,654)	(6,458)	(5,699)	(5,285)
Nonvested restricted stock	(2,359)	(2,536)	(2,566)	(2,340)	(2,444)
Additional paid-in capital	56,931	56,708	56,408	55,789	55,763
Retained earnings	47,652	44,937	41,284	39,671	38,753
Accumulated other comprehensive loss	(4,928)	(6,643)	(7,541)	(9,754)	(6,366)
Total shareholders' equity	89,502	85,901	81,216	77,756	80,510
Total liabilities and shareholders' equity	$ 1,097,846	$ 1,102,203	$ 1,097,389	$ 1,067,104	$ 1,071,480

First Reliance cash and cash equivalents totaled $31.8 million at September 30, 2025, compared to $33.6 million at June 30, 2025. Cash with the Federal Reserve Bank totaled $26.5 million compared to $61.6 million at September 30, 2024.

First Reliance does not have any Held-to-Maturity (HTM) securities for any reported period. All debt securities were classified as Available-For-Sale (AFS) securities with balances of $199.7 million and $194.1 million, at September 30, 2025 and June 30, 2025, respectively. The unrealized loss recorded on these securities totaled $6.5 million as of September 30, 2025, compared to $8.8 million at June 30, 2025, a decrease in the unrealized loss during the third quarter of $2.3 million (before taxes).

As of September 30, 2025, deposits increased by $9.0 million, or 3.8% annualized. During the third quarter, the bank reclassified certain interest-bearing transactional accounts (money market accounts) to non-interest-bearing demand deposit accounts. See the table on page 10 for detail.

The Company had $15.0 million in outstanding borrowings with the Federal Home Loan Bank (FHLB) of Atlanta at September 30, 2025, down from $32.5 million at June 30, 2025. The Company had remaining credit availability in excess of $304.9 million with the FHLB of Atlanta, subject to collateral requirements.

First Reliance also has access to approximately $23.1 million through the Federal Reserve Bank discount window with posted collateral. There are currently no borrowings against the Federal Reserve Bank discount window.

COMMON STOCK SUMMARY - Unaudited

			As of
	Sep 30	Jun 30	Mar 31	Dec 31	Sep 30
(shares in thousands)	2025	2025	2025	2024	2024
Voting common shares outstanding	8,794	8,787	8,786	8,764	8,820
Treasury shares outstanding	(954)	(830)	(809)	(731)	(751)
Total common shares outstanding	7,840	7,957	7,977	8,033	8,069

Book value per common share	$ 11.42	$ 10.80	$ 10.18	$ 9.68	$ 9.98
Tangible book value per common share - Non-GAAP(5)	$ 11.33	$ 10.71	$ 10.09	$ 9.59	$ 9.89

Stock price:
High	$ 10.21	$ 10.00	$ 9.98	$ 10.24	$ 10.59
Low	$ 9.36	$ 9.00	$ 9.35	$ 9.16	$ 7.60
Period end	$ 10.10	$ 9.60	$ 9.45	$ 9.59	$ 10.14

ASSET QUALITY MEASURES – Unaudited

	As of
	Sep 30	Jun 30	Mar 31	Dec 31	Sep 30
($ in thousands)	2025	2025	2025	2024	2024
Nonperforming Assets
Commercial
Owner occupied RE	$ 36	$ 39	$ 42	$ 44	$ 46
Non-owner occupied RE	-	-	655	646	701
Construction	-	-	-	66	-
Commercial business	38	43	146	328	57
Consumer
Real estate	226	39	40	42	44
Home equity	-	-	-	-	-
Construction	-	-	-	-	-
Other	69	84	50	64	61
Nonaccruing loan modifications	-	-	-	-	-
Total nonaccrual loans	$ 369	$ 205	$ 933	$ 1,190	$ 909
Other assets repossessed	-	-	-	11	15
Total nonperforming assets	$ 369	$ 205	$ 933	$ 1,201	$ 924
Nonperforming assets as a percentage of:
Total assets	0.03 %	0.02 %	0.09 %	0.11 %	0.09 %
Total loans receivable	0.05 %	0.03 %	0.12 %	0.16 %	0.12 %
Accruing loan modifications	$ 683	$ 797	$ 369	$ 400	$ 428

	Three Months Ended
	Sep 30	Jun 30	Mar 31	Dec 31	Sep 30
($ in thousands)	2025	2025	2025	2024	2024
Allowance for Credit Losses
Balance, beginning of period	$ 8,535	$ 8,654	$ 8,434	$ 8,317	$ 8,498
Loans charged-off	48	110	163	24	69
Recoveries of loans previously charged-off	6	57	19	18	17
Net charge-offs	42	53	144	6	52
Provision for credit (recovery of) losses	248	(66)	364	123	(129)
Balance, end of period	$ 8,741	$ 8,535	$ 8,654	$ 8,434	$ 8,317
Allowance for credit losses to gross loans receivable	1.12 %	1.09 %	1.10 %	1.12 %	1.13 %
Allowance for credit losses to nonaccrual loans	2368.83 %	4163.41 %	927.54 %	708.74 %	914.96 %

Asset quality remained strong during the third quarter of 2025, with nonperforming assets increasing to $369 thousand, which represents 0.03% of total assets. The allowance for credit losses as a percentage of total loans receivable increased to 1.12% at September 30, 2025, compared to 1.09% at June 30, 2025, and 1.12% at December 31, 2024. The allowance for credit losses increased by a provision for credit losses of $248 thousand and decreased by net charge-offs of $42 thousand, during the third quarter of 2025. In the third quarter of 2024, the Company experienced net charge-offs of $52 thousand and decreased the ACL with a release of the provision for credit losses of $129 thousand. The ACL was 1.13% of total loans at September 30, 2024.

Footnotes to table located at the end of this release.

LOAN COMPOSITION – Unaudited

	As of
	Sep 30	Jun 30	Mar 31	Dec 31	Sep 30
($ in thousands)	2025	2025	2025	2024	2024
Commercial real estate	$ 471,002	$ 483,278	$ 482,201	$ 463,301	$ 456,775
Consumer real estate	220,767	223,310	216,964	204,303	193,362
Commercial and industrial	71,802	61,255	65,573	65,980	66,561
Consumer and other	16,426	16,906	19,731	20,154	22,521
Total loans, net of deferred fees	779,997	784,749	784,469	753,738	739,219
Less allowance for credit losses	8,741	8,535	8,654	8,434	8,317
Total loans, net	$ 771,256	$ 776,214	$ 775,815	$ 745,304	$ 730,902

DEPOSIT COMPOSITION – Unaudited

	As of
	Sep 30	Jun 30	Mar 31	Dec 31	Sep 30
($ in thousands)	2025	2025	2025	2024	2024
Noninterest-bearing	$ 292,107	$ 219,352	$ 224,031	$ 227,471	$ 219,279
Interest-bearing:
DDA and NOW accounts	98,135	156,062	162,129	140,116	150,312
Money market accounts	360,621	379,078	393,736	381,602	362,834
Savings	38,279	38,995	39,719	40,627	41,184
Time, less than $250,000	126,195	125,607	122,613	120,397	133,940
Time, $250,000 and over	43,963	31,245	36,439	41,198	44,399
Total deposits	$ 959,300	$ 950,339	$ 978,667	$ 951,411	$ 951,948


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 $1.098 billion. The Company employs approximately 166 professionals and has locations throughout South 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 92% customer satisfaction rating, well above the bank industry average of 82%. First Reliance is also one of two companies throughout South Carolina to receive the Best Places to Work in South Carolina award all 19 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 credit losses; (3) the rate of delinquencies and amounts of charge-offs, the level of allowance for credit 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 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, Inc.