FLORENCE, S.C., July 25, 2024 /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 second quarter of 2024.
Second Quarter 2024 Highlights
- Net income increased 91.8% for the second quarter of 2024 to $1.9 million, or $0.24 per diluted share, compared to $1.0 million, or $0.12 per diluted share, for the second quarter of 2023.
- Net interest income for the quarter was $7.7 million, which represents an increase of $444,800, or 6.2%, compared to the same quarter one year ago. On a linked quarter basis, the increase was $458,100, or 6.4%.
- Net interest margin increased during the quarter to 3.20% at June 30, 2024, compared to 3.11% at March 31, 2024, and increased 4 basis points compared to the same period in 2023.
- Total loans held for investment increased $14.2 million, or 7.9% annualized, to $739.4 million at June 30, 2024, from $725.2 million at March 31, 2024.
- Total deposits increased $18.5 million, or 8.4% annualized, to $899.8 million at June 30, 2024, from $881.3 million at March 31, 2024.
- Asset quality remained strong with nonperforming assets totaling $310 thousand, or 0.03% of total assets at June 30, 2024, compared to $282 thousand, or 0.03% of total assets at March 31, 2024.
- Cost of funds for the second quarter of 2024 increased to 2.28% from 2.25% on a linked quarter basis and from 1.67% for the same period in 2023.
- Book value per share increased $1.05, or 12.9%, from $8.17 per share at June 30, 2023, to $9.22 per share at June 30, 2024. Tangible book value per share increased $1.05, or 13.0%, from $8.08 per share at June 30, 2023, to $9.13 per share at June 30, 2024.
- In May 2024, the Company's Board approved a stock repurchase program authorizing the purchase of up to $2.0 million of outstanding common stock through expiration of the program on June 30, 2025. In determining stock repurchases, management will consider the following factors: the Company's stock price, expected growth, capital position, alternative uses of capital, liquidity, financial performance, current and expected macroeconomic environment, regulatory requirements and any other relevant factors.
Rick Saunders, Chief Executive Officer, remarked: "We continue to achieve disciplined growth while also emphasizing expense control and sound asset quality. We're pleased with our slowing deposit betas which helped produce a nine basis point improvement in NIM during the quarter and a 10.69% ROAE. We also increased our tangible book value per share by $0.36 during the quarter. We are blessed to operate in some of the most vibrant markets in the country which are still producing quality opportunities for our commercial and mortgage bankers, additionally, our associates remain highly engaged in providing quality customer service across the markets we serve in North and South Carolina."
Financial Summary | |||||||||
Three Months Ended | Six Months Ended | ||||||||
Jun 30 | Mar 31 | Dec 31 | Sep 30 | Jun 30 | Jun 30 | Jun 30 | |||
($ in thousands, except per share data) | 2024 | 2024 | 2023 | 2023 | 2023 | 2024 | 2023 | ||
Earnings: | |||||||||
Net income available to common shareholders | $ 1,942 | $ 1,238 | $ 776 | $ 1,444 | $ 1,013 | $ 3,180 | $ 2,383 | ||
Earnings per common share, diluted | 0.24 | 0.15 | 0.10 | 0.18 | 0.12 | 0.39 | 0.29 | ||
Total revenue(1) | 10,226 | 9,690 | 8,285 | 9,219 | 8,959 | 19,916 | 18,389 | ||
Net interest margin | 3.20 % | 3.11 % | 3.16 % | 3.11 % | 3.16 % | 3.16 % | 3.25 % | ||
Return on average assets(2) | 0.75 % | 0.49 % | 0.32 % | 0.58 % | 0.41 % | 0.63 % | 0.49 % | ||
Return on average equity(2) | 10.69 % | 7.01 % | 4.70 % | 8.68 % | 6.13 % | 8.93 % | 7.31 % | ||
Efficiency ratio(3) | 75.21 % | 81.04 % | 89.83 % | 80.35 % | 82.50 % | 78.05 % | 80.81 % | ||
As of | |||||
Jun 30 | Mar 31 | Dec 31 | Sep 30 | Jun 30 | |
($ in thousands) | 2024 | 2024 | 2023 | 2023 | 2023 |
Balance Sheet: | |||||
Total assets | $ 1,058,395 | $ 1,027,616 | $ 974,157 | $ 991,721 | $ 992,596 |
Total loans receivable | 739,433 | 725,234 | 705,672 | 706,596 | 694,130 |
Total deposits | 899,799 | 881,309 | 858,597 | 861,229 | 830,085 |
Total transaction deposits(4) to total deposits | 39.18 % | 39.86 % | 41.31 % | 43.55 % | 44.00 % |
Loans to deposits | 82.18 % | 82.29 % | 82.19 % | 82.05 % | 83.62 % |
Bank Capital Ratios: | |||||
Total risk-based capital ratio | 13.34 % | 13.46 % | 13.86 % | 13.54 % | 13.57 % |
Tier 1 risk-based capital ratio | 12.28 % | 12.37 % | 12.75 % | 12.43 % | 12.43 % |
Tier 1 leverage ratio | 10.01 % | 10.16 % | 10.32 % | 10.11 % | 9.95 % |
Common equity tier 1 capital ratio | 12.28 % | 12.37 % | 12.75 % | 12.43 % | 12.43 % |
Asset Quality Ratios: | |||||
Nonperforming assets as a percentage of | 0.03 % | 0.03 % | 0.03 % | 0.05 % | 0.05 % |
Allowance for credit losses as a percentage of | 1.15 % | 1.17 % | 1.19 % | 1.19 % | 1.19 % |
Net charge-offs as a percentage of average total loans receivable | 0.05 % | 0.06 % | 0.00 % | 0.01 % | 0.07 % |
Footnotes to table located at the end of this release.
CONDENSED CONSOLIDATED INCOME STATEMENTS - Unaudited | |||||||
Three Months Ended | Six Months Ended | ||||||
Jun 30 | Mar 31 | Dec 31 | Sep 30 | Jun 30 | Jun 30 | ||
($ in thousands, except per share data) | 2024 | 2024 | 2023 | 2023 | 2023 | 2024 | 2023 |
Interest income | |||||||
Loans | $ 10,746 | $ 10,085 | $ 9,678 | $ 9,394 | $ 8,837 | $ 20,831 | $ 17,097 |
Investment securities | 1,875 | 1,972 | 1,832 | 1,596 | 1,371 | 3,847 | 2,714 |
Other interest income | 419 | 291 | 396 | 536 | 782 | 710 | 1,144 |
Total interest income | 13,040 | 12,348 | 11,906 | 11,526 | 10,990 | 25,388 | 20,955 |
Interest expense | |||||||
Deposits | 4,652 | 4,332 | 4,076 | 3,671 | 2,876 | 8,984 | 4,799 |
Other interest expense | 722 | 808 | 558 | 651 | 893 | 1,530 | 1,661 |
Total interest expense | 5,374 | 5,140 | 4,634 | 4,322 | 3,769 | 10,514 | 6,460 |
Net interest income | 7,666 | 7,208 | 7,272 | 7,204 | 7,221 | 14,874 | 14,495 |
Provision for credit losses | 55 | 207 | (118) | (42) | 280 | 262 | 528 |
Net interest income after provision for loan | 7,611 | 7,001 | 7,390 | 7,246 | 6,941 | 14,612 | 13,967 |
Noninterest income | |||||||
Mortgage banking income | 1,416 | 1,375 | 694 | 1,147 | 1,063 | 2,791 | 1,979 |
Service fees on deposit accounts | 307 | 336 | 336 | 371 | 341 | 643 | 668 |
Debit card and other service charges, | 568 | 519 | 544 | 537 | 563 | 1,087 | 1,080 |
Income from bank owned life insurance | 103 | 102 | 99 | 95 | 91 | 205 | 335 |
Loss on sale of securities, net | - | - | (802) | (268) | (455) | - | (455) |
Gain on disposal of fixed assets | - | 20 | 11 | - | - | 20 | 19 |
Other income | 166 | 130 | 132 | 132 | 134 | 296 | 267 |
Total noninterest income | 2,560 | 2,482 | 1,014 | 2,014 | 1,737 | 5,042 | 3,893 |
Noninterest expense | |||||||
Compensation and benefits | 4,693 | 4,878 | 4,558 | 4,603 | 4,461 | 9,571 | 9,113 |
Occupancy and equipment | 837 | 841 | 798 | 882 | 856 | 1,678 | 1,748 |
Data processing, technology, and communications | 1,119 | 1,039 | 985 | 923 | 942 | 2,158 | 1,811 |
Professional fees | 96 | 110 | 56 | 58 | 111 | 206 | 307 |
Marketing | 102 | 160 | 104 | 151 | 206 | 262 | 432 |
Other | 844 | 826 | 942 | 790 | 815 | 1,670 | 1,449 |
Total noninterest expense | 7,691 | 7,854 | 7,443 | 7,407 | 7,391 | 15,545 | 14,860 |
Income before provision for income taxes | 2,480 | 1,629 | 961 | 1,853 | 1,287 | 4,109 | 3,000 |
Income tax expense | 538 | 391 | 185 | 409 | 274 | 929 | 617 |
Net income available to common shareholders | $ 1,942 | $ 1,238 | $ 776 | $ 1,444 | $ 1,013 | $ 3,180 | $ 2,383 |
Addback securities losses, net of tax | - | - | 648 | 209 | 358 | - | 358 |
Adjusted net income (nonGAAP) | 1,942 | 1,238 | 1,424 | 1,653 | 1,371 | 3,180 | 2,741 |
Weighted average common shares - basic | 7,851 | 7,837 | 7,826 | 7,834 | 7,825 | 7,844 | 7,816 |
Weighted average common shares - diluted | 8,260 | 8,217 | 8,164 | 8,149 | 8,142 | 8,273 | 8,173 |
Basic income per common share | $ 0.25 | $ 0.16 | $ 0.10 | $ 0.18 | $ 0.13 | $ 0.41 | $ 0.30 |
Diluted income per common share | $ 0.24 | $ 0.15 | $ 0.10 | $ 0.18 | $ 0.12 | $ 0.39 | $ 0.29 |
Adjusted basic net income per common share (nonGAAP) | $ 0.25 | $ 0.16 | $ 0.18 | $ 0.21 | $ 0.18 | $ 0.41 | $ 0.35 |
Adjusted diluted net income per common share (nonGAAP) | $ 0.24 | $ 0.15 | $ 0.17 | $ 0.20 | $ 0.17 | $ 0.39 | $ 0.34 |
Net income for the three months ended June 30, 2024, was $1.9 million, or $0.24 per diluted common share, compared to $1.0 million, or $0.12 per diluted common share, for the three months ended June 30, 2023. On an adjusted basis, second quarter of 2023 diluted EPS was $0.17, which includes adding back the impact of securities losses, after tax. Net income for the six months ended June 30, 2024, totaled $3.2 million, or $0.39 per diluted common share, compared to $2.4 million, or $0.29 per diluted common share. On an adjusted basis, diluted EPS was $0.34 per diluted common share, for the six months ended June 30, 2023, which includes adding back the impact of securities losses, after tax.
Noninterest income for the three months ended June 30, 2024, was $2.6 million, an increase of $0.9 million from $1.7 million for the same period in 2023. Noninterest income was primarily driven by mortgage banking income and totaled $1.4 million in the second quarter of 2024 compared to $1.1 million in the second quarter of 2023. This increase is the result of more sales volume from new producers hired in the last six months and a diversification of our third party originated (TPO) base. In the second quarter of 2023, the Company recognized a loss of $455 thousand on certain securities sold, and no such losses in 2024.
For the six months ended June 30, 2024, noninterest income increased by $1.2 million, driven by improved mortgage banking income of $812 thousand discussed above and no securities loss in 2024 compared to the $455 thousand loss recorded in 2023.
Noninterest expense for the three months ended June 30, 2024, was $7.7 million, an increase of $0.3 million from $7.4 million for the same period in 2023. This increase in expense was primarily driven by an increase in compensation and benefits of $232 thousand due primarily to mortgage commissions and employee medical benefits, and an increase in data processing and technology of $177 thousand related to core processing cost and other software maintenance. These increases in expense were partially offset by declines in professional fees expense and marketing expense.
Noninterest expense, for the six months ended June 30, 2024, was $15.5 million and increased $685 thousand over the same period one year ago. This increase in noninterest expense was primarily related to compensation and benefits of $458 thousand attributable to mortgage commissions and an increase in employee medical benefits, and an increase in data processing and technology totaling $347 thousand resulting from higher core processor cost and software expense. These increases were partially offset by lower professional fees and marketing cost.
NET INTEREST INCOME AND MARGIN - Unaudited - QTR | |||||||
For the Three Months Ended | |||||||
June 30, 2024 | June 30, 2023 | ||||||
Average | Income/ | Yield/ | Average | Income/ | Yield/ | ||
($ in thousands) | Balance | Expense | Rate | Balance | Expense | Rate | |
Assets | |||||||
Interest-earning assets | |||||||
Federal funds sold and interest-bearing deposits | $ 29,743 | $ 379 | 5.13 % | $ 60,416 | $ 750 | 4.98 % | |
Investment securities | 168,826 | 1,875 | 4.47 % | 160,245 | 1,371 | 3.43 % | |
Nonmarketable equity securities | 2,037 | 40 | 7.82 % | 2,186 | 31 | 5.75 % | |
Loans held for sale | 24,965 | 446 | 7.19 % | 16,864 | 295 | 7.00 % | |
Loans | 736,944 | 10,300 | 5.62 % | 677,668 | 8,543 | 5.06 % | |
Total interest-earning assets | 962,515 | 13,040 | 5.45 % | 917,379 | 10,990 | 4.81 % | |
Allowance for credit losses | (8,508) | (8,073) | |||||
Noninterest-earning assets | 79,658 | 77,561 | |||||
Total assets | $ 1,033,665 | $ 986,867 | |||||
Liabilities and Shareholders' Equity | |||||||
Interest-bearing liabilities | |||||||
NOW accounts | $ 140,821 | $ 247 | 0.70 % | $ 138,167 | $ 132 | 0.38 % | |
Savings & money market | 366,431 | 2,712 | 2.98 % | 314,091 | 1,860 | 2.37 % | |
Time deposits | 179,539 | 1,694 | 3.79 % | 139,501 | 884 | 2.54 % | |
Total interest-bearing deposits | 686,792 | 4,652 | 2.72 % | 591,759 | 2,876 | 1.95 % | |
FHLB advances and other borrowings | 26,917 | 356 | 5.32 % | 51,207 | 532 | 4.17 % | |
Subordinated debentures | 25,737 | 366 | 5.72 % | 25,703 | 361 | 5.62 % | |
Total interest-bearing liabilities | 739,446 | 5,374 | 2.92 % | 668,669 | 3,769 | 2.26 % | |
Noninterest bearing deposits | 207,573 | 238,295 | |||||
Other liabilities | 13,971 | 13,802 | |||||
Shareholders' equity | 72,674 | 66,101 | |||||
Total liabilities and shareholders' equity | $ 1,033,665 | $ 986,867 | |||||
Net interest income (tax equivalent) / interest | $ 7,666 | 2.53 % | $ 7,221 | 2.54 % | |||
Net Interest Margin | 3.20 % | 3.16 % | |||||
Cost of funds, including noninterest-bearing deposits | 2.28 % | 1.67 % | |||||
Net interest income for the three months ended June 30, 2024, was $7.7 million compared to $7.2 million for the three months ended June 30, 2023. This increase was the result of a larger increase in interest income of $2.050 million than the increase in interest expense of $1.605 million. This resulted in an improved net interest margin to 3.20% from 3.16% one year ago. All categories of interest-earning assets reflected higher yields as was the case for all categories of interest-bearing liabilities. In addition, the total cost of funds, including noninterest-bearing deposits, increased to 2.28% in the second quarter of 2024, compared to 1.67% in the second quarter of 2023.
NET INTEREST INCOME AND MARGIN - Unaudited - YTD | |||||||
For the Six Months Ended | |||||||
June 30, 2024 | June 30, 2023 | ||||||
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 | $ 29,419 | $ 645 | 4.40 % | $ 50,345 | $ 1,100 | 4.41 % | |
Investment securities | 169,084 | 3,846 | 4.56 % | 161,627 | 2,714 | 3.39 % | |
Nonmarketable equity securities | 2,093 | 65 | 6.21 % | 2,100 | 44 | 4.27 % | |
Loans held for sale | 20,025 | 700 | 7.01 % | 13,289 | 450 | 6.83 % | |
Loans | 723,620 | 20,131 | 5.58 % | 673,229 | 16,647 | 4.99 % | |
Total interest-earning assets | 944,241 | 25,388 | 5.39 % | 900,590 | 20,955 | 4.69 % | |
Allowance for loan losses | (8,450) | (7,955) | |||||
Noninterest-earning assets | 79,851 | 78,225 | |||||
Total assets | $ 1,015,641 | $ 970,860 | |||||
Liabilities and Shareholders' Equity | |||||||
Interest-bearing liabilities | |||||||
NOW accounts | $ 142,005 | $ 538 | 0.76 % | $ 139,746 | $ 237 | 0.34 % | |
Savings & money market | 352,219 | 5,156 | 2.94 % | 308,178 | 3,277 | 2.14 % | |
Time deposits | 176,923 | 3,290 | 3.73 % | 124,811 | 1,284 | 2.07 % | |
Total interest-bearing deposits | 671,147 | 8,984 | 2.68 % | 572,735 | 4,798 | 1.69 % | |
FHLB advances and other borrowings | 28,538 | 793 | 5.57 % | 47,839 | 963 | 4.06 % | |
Subordinated debentures | 25,731 | 737 | 5.75 % | 25,699 | 699 | 5.48 % | |
Total interest-bearing liabilities | 725,416 | 10,514 | 2.91 % | 646,273 | 6,460 | 2.02 % | |
Noninterest bearing deposits | 205,301 | 245,738 | |||||
Other liabilities | 13,694 | 13,658 | |||||
Shareholders' equity | 71,230 | 65,191 | |||||
Total liabilities and shareholders' equity | $ 1,015,641 | $ 970,860 | |||||
Net interest income (tax equivalent) / interest | $ 14,874 | 2.49 % | $ 14,495 | 2.68 % | |||
Net Interest Margin | 3.16 % | 3.25 % | |||||
Cost of funds,including noninterest bearing deposits | 2.27 % | 1.46 % | |||||
Net interest income for the six months ended June 30, 2024, totaled $14.9 million compared to $14.5 million in the first six months of 2023, an increase of $0.4 million. The net interest margin was 3.16% for the first six months of 2024 compared to 3.25% for the same period in 2023. All of the yields on interest-earning assets, except fed funds sold and interest-bearing deposits, and interest-bearing liabilities have increased from the same period one year ago. The total cost of funds, including noninterest-bearing deposits was 2.27% compared to 1.46% in 2023.
CONDENSED CONSOLIDATED BALANCE SHEETS - Unaudited | |||||
As of | |||||
Jun 30 | Mar 31 | Dec 31 | Sep 30 | Jun 30 | |
($ in thousands) | 2024 | 2024 | 2023 | 2023 | 2023 |
Assets | |||||
Cash and cash equivalents: | |||||
Cash and due from banks | $ 5,669 | $ 5,482 | $ 4,354 | $ 3,158 | $ 3,748 |
Interest-bearing deposits with banks | 41,391 | 36,173 | 17,590 | 32,835 | 55,496 |
Total cash and cash equivalents | 47,060 | 41,655 | 21,944 | 35,993 | 59,244 |
Investment securities: | |||||
Investment securities available for sale | 173,298 | 171,075 | 171,400 | 162,573 | 158,143 |
Other investments | 2,788 | 2,548 | 1,078 | 2,025 | 2,563 |
Total investment securities | 176,087 | 173,623 | 172,478 | 164,598 | 160,706 |
Mortgage loans held for sale | 25,776 | 18,307 | 7,156 | 17,506 | 12,485 |
Loans receivable: | |||||
Loans | 739,433 | 725,234 | 705,672 | 706,596 | 694,130 |
Less allowance for credit losses | (8,498) | (8,497) | (8,393) | (8,430) | (8,229) |
Loans receivable, net | 730,935 | 716,737 | 697,279 | 698,166 | 685,901 |
Property and equipment, net | 22,040 | 22,185 | 22,298 | 22,505 | 22,588 |
Mortgage servicing rights | 12,680 | 12,226 | 11,638 | 11,394 | 10,893 |
Bank owned life insurance | 18,396 | 18,293 | 18,191 | 18,092 | 17,997 |
Deferred income taxes | 7,612 | 7,990 | 7,775 | 9,184 | 8,534 |
Other assets | 17,809 | 16,600 | 15,398 | 14,283 | 14,248 |
Total assets | 1,058,395 | 1,027,616 | 974,157 | 991,721 | 992,596 |
Liabilities | |||||
Deposits | $ 899,799 | $ 881,309 | $ 858,597 | $ 861,229 | $ 830,085 |
Federal Home Loan Bank advances | 40,000 | 35,000 | 5,000 | 25,000 | 45,000 |
Federal funds and repurchase agreements | 408 | - | 307 | 81 | 11,910 |
Subordinated debentures | 15,428 | 15,421 | 15,413 | 15,405 | 15,397 |
Junior subordinated debentures | 10,310 | 10,310 | 10,310 | 10,310 | 10,310 |
Reserve for unfunded commitments | 364 | 398 | 407 | 488 | 740 |
Other liabilities | 17,590 | 13,070 | 12,727 | 13,186 | 12,616 |
Total liabilities | 983,899 | 955,508 | 902,761 | 925,699 | 926,058 |
Shareholders' equity | |||||
Preferred stock - Series D non-cumulative, no par | 1 | 1 | 1 | 1 | 1 |
Common Stock - $.01 par value; 20,000,000 shares | 88 | 88 | 88 | 88 | 88 |
Treasury stock, at cost | (5,216) | (4,965) | (4,821) | (4,750) | (4,666) |
Nonvested restricted stock | (2,463) | (2,900) | (2,518) | (2,387) | (2,542) |
Additional paid-in capital | 55,645 | 56,134 | 55,471 | 55,068 | 54,972 |
Retained earnings | 36,928 | 34,986 | 33,748 | 32,972 | 31,626 |
Accumulated other comprehensive (loss) income | (10,487) | (11,236) | (10,573) | (14,970) | (12,941) |
Total shareholders' equity | 74,496 | 72,108 | 71,396 | 66,022 | 66,538 |
Total liabilities and shareholders' equity | $ 1,058,395 | $ 1,027,616 | $ 974,157 | $ 991,721 | $ 992,596 |
First Reliance cash and cash equivalents totaled $47.1 million at June 30, 2024, compared to $41.7 million at March 31, 2024. Cash with the Federal Reserve Bank totaled $41.3 million compared to $36.2 million at March 31, 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 $173.3 million and $171.1 million, at June 30, 2024 and March 31, 2024, respectively. The unrealized loss recorded on these securities totaled $13.9 million as of June 30, 2024, compared to $14.9 million at March 31, 2024, a decrease in the unrealized loss during the second quarter of $1.0 million (before taxes).
As of June 30, 2024, deposits increased by $18.5 million, or 8.4% annualized. The deposit growth was in money market accounts, time deposits less than $250,000 accounts, and noninterest bearing deposit accounts (see table on page 10 for detail).
The Company had $40.0 million in outstanding borrowings with the Federal Home Loan Bank (FHLB) of Atlanta at June 30, 2024, up from $35.0 million at March 31, 2024. The Company had remaining credit availability in excess of $257.7 million with the FHLB of Atlanta, subject to collateral requirements.
First Reliance also has access to approximately $34.7 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 | |||||
Jun 30 | Mar 31 | Dec 31 | Sep 30 | Jun 30 | |
(shares in thousands) | 2024 | 2024 | 2023 | 2023 | 2023 |
Voting common shares outstanding | 8,819 | 8,785 | 8,772 | 8,754 | 8,752 |
Treasury shares outstanding | (743) | (649) | (633) | (623) | (612) |
Total common shares outstanding | 8,076 | 8,136 | 8,139 | 8,131 | 8,140 |
Book value per common share | $ 9.22 | $ 8.86 | $ 8.77 | $ 8.12 | $ 8.17 |
Tangible book value per common share(5) | $ 9.13 | $ 8.77 | $ 8.68 | $ 8.02 | $ 8.08 |
Stock price: | |||||
High | $ 8.30 | $ 8.65 | $ 9.00 | $ 7.40 | $ 8.80 |
Low | $ 7.60 | $ 7.70 | $ 6.91 | $ 6.30 | $ 6.00 |
Period end | $ 7.90 | $ 8.15 | $ 8.57 | $ 7.20 | $ 6.37 |
ASSET QUALITY MEASURES - Unaudited | |||||
As of | |||||
Jun 30 | Mar 31 | Dec 31 | Sep 30 | Jun 30 | |
($ in thousands) | 2024 | 2024 | 2023 | 2023 | 2023 |
Nonperforming Assets | |||||
Commercial | |||||
Owner occupied RE | $ 49 | $ - | $ - | $ - | $ - |
Non-owner occupied RE | - | - | 86 | 86 | 82 |
Construction | 62 | - | - | - | - |
Commercial business | 12 | 12 | 99 | 164 | 159 |
Consumer | |||||
Real estate | 46 | 48 | - | - | - |
Home equity | - | - | - | 145 | 145 |
Construction | - | - | - | - | - |
Other | 66 | 52 | 8 | 14 | 94 |
Nonaccruing loan modifications | - | 56 | 56 | 65 | 65 |
Total nonaccrual loans | $ 235 | $ 168 | $ 249 | $ 474 | $ 545 |
Other assets repossessed | 75 | 114 | 47 | 45 | - |
Total nonperforming assets | $ 310 | $ 282 | $ 296 | $ 519 | $ 545 |
Nonperforming assets as a percentage of: | |||||
Total assets | 0.03 % | 0.03 % | 0.03 % | 0.05 % | 0.05 % |
Total loans receivable | 0.04 % | 0.04 % | 0.04 % | 0.07 % | 0.08 % |
Accruing loan modifications | $ 460 | $ 970 | $ 947 | $ 1,027 | $ 1,059 |
Three Months Ended | |||||
Jun 30 | Mar 31 | Dec 31 | Sep 30 | Jun 30 | |
($ in thousands) | 2024 | 2024 | 2023 | 2023 | 2023 |
Allowance for Credit Losses | |||||
Balance, beginning of period | $ 8,497 | $ 8,393 | $ 8,430 | $ 8,229 | $ 8,052 |
CECL adoption | - | - | - | - | - |
Loans charged-off | 102 | 195 | 108 | 41 | 145 |
Recoveries of loans previously charged-off | 14 | 82 | 109 | 31 | 28 |
Net charge-offs (recoveries) | 88 | 113 | (1) | 10 | 117 |
Provision for credit losses | 89 | 217 | (38) | 211 | 294 |
Balance, end of period | $ 8,498 | $ 8,497 | $ 8,393 | $ 8,430 | $ 8,229 |
Allowance for credit losses to gross loans receivable | 1.15 % | 1.17 % | 1.19 % | 1.19 % | 1.19 % |
Allowance for credit losses to nonaccrual loans | 3616.17 % | 5057.74 % | 3370.68 % | 1778.48 % | 1509.91 % |
Asset quality remained consistent during the second quarter of 2024, with nonperforming assets remaining at $0.3 million, which represents 0.03% of total assets. The allowance for credit losses as a percentage of total loans receivable decreased to 1.15% at June 30, 2024, compared to 1.17% at March 31, 2024, and 1.19% at December 31, 2023. The allowance for credit losses was increased by a provision for credit losses of $89 thousand offset by net charge-offs of $88 thousand, during the second quarter of 2024. In the second quarter of 2023, the Company experienced net charge-offs of $117 thousand, and increased the ACL with a provision for credit losses of $294 thousand. The ACL was 1.19% of total loans at June 30, 2023.
Footnotes to table located at the end of this release.
LOAN COMPOSITION - Unaudited | |||||
As of | |||||
Jun 30 | Mar 31 | Dec 31 | Sep 30 | Jun 30 | |
($ in thousands) | 2024 | 2024 | 2023 | 2023 | 2023 |
Commercial real estate | $ 450,936 | $ 434,743 | $ 433,687 | $ 430,825 | $ 415,616 |
Consumer real estate | 188,759 | 184,969 | 177,102 | 172,702 | 168,227 |
Commercial and industrial | 76,149 | 77,023 | 63,946 | 67,740 | 71,345 |
Consumer and other | 23,589 | 28,499 | 30,937 | 35,329 | 38,942 |
Total loans, net of deferred fees | 739,433 | 725,234 | 705,672 | 706,596 | 694,130 |
Less allowance for credit losses | 8,498 | 8,497 | 8,393 | 8,430 | 8,229 |
Total loans, net | $ 730,935 | $ 716,737 | $ 697,279 | $ 698,166 | $ 685,901 |
DEPOSIT COMPOSITION - Unaudited | |||||
As of | |||||
Jun 30 | Mar 31 | Dec 31 | Sep 30 | Jun 30 | |
($ in thousands) | 2024 | 2024 | 2023 | 2023 | 2023 |
Noninterest-bearing | $ 220,330 | $ 212,083 | $ 210,604 | $ 231,672 | $ 230,153 |
Interest-bearing: | |||||
DDA and NOW accounts | 132,186 | 139,229 | 144,039 | 143,393 | 135,071 |
Money market accounts | 325,769 | 307,696 | 289,158 | 281,325 | 264,130 |
Savings | 42,479 | 44,191 | 45,558 | 47,422 | 51,029 |
Time, less than $250,000 | 128,869 | 125,248 | 121,035 | 117,989 | 113,536 |
Time, $250,000 and over | 50,166 | 52,862 | 48,203 | 39,428 | 36,166 |
Total deposits | $ 899,799 | $ 881,309 | $ 858,597 | $ 861,229 | $ 830,085 |
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 $1.058 billion. The Company employs approximately 170 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 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 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, Inc.
