First Reliance Bancshares Reports Fourth Quarter 2025 Results
First Reliance Bancshares Reports Fourth Quarter 2025 Results |
| [29-January-2026] |
FLORENCE, S.C., Jan. 29, 2026 /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 2025 and calendar year 2025.
Fourth Quarter 2025 Highlights
Rick Saunders, Chief Executive Officer, stated, "We are excited as we head into 2026 given our teams performance in 2025 and the momentum created. In summary, our calendar year 2025 results included operating earnings per share improvement of 39% to $1.14 per diluted share compared to $0.82 per diluted share in 2024. Our net interest margin increased 36 basis points to 3.61% and our adjusted efficiency ratio improved to 72.5% in 2025, down from 77.6% in 2024. Tangible book value per share grew $2.20 per share, an increase of 23%, to $11.79, in 2025. Loan growth exceeded $53.7 million, or 7.1%, excluding the decline from the loan portfolios in North Carolina and from indirect automobiles. Credit quality remained sound with low nonperforming assets and low net charge-offs. It is truly rewarding to see the First Reliance Bank team perform well for our customers and communities, resulting in strong financial results and momentum for 2026."
Net income for the three months ended December 31, 2025, was $2.9 million, or $0.36 per diluted common share, compared to $0.9 million, or $0.11 per diluted common share, for the three months ended December 31, 2024. Operating net income (Non-GAAP), for the three months ended December 31, 2025, was $2.9 million, or $0.35 per diluted common share, compared to $1.7 million, or $0.21 per diluted common share for the three months ended December 31, 2024. Net income for the year ended December 31, 2025, totaled $10.9 million, or $1.31 per diluted common share, compared to $5.9 million, or $0.71 per diluted common share for the year ended December 31, 2024. On an operating basis, diluted EPS (Non-GAAP) was $1.14 per diluted common share, for the year ended December 31, 2025, which includes adding back the impact of securities losses, 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, the impact of net gain from the sale of fixed assets, net of tax and the gain from the early extinguishment of debt, net of tax, compared to $0.82 per operating earnings per diluted common share, for the year ended December 31, 2024. Noninterest income, for the three months ended December 31, 2025, was $2.7 million, an increase of $1.3 million from $1.4 million for the same period in 2024. Noninterest income was primarily driven by mortgage banking income which totaled $1.4 million in the fourth quarter of 2025 compared to $1.2 million in the fourth quarter of 2024 and increase of $200 thousand. In addition, fixed assets were written down $838 thousand in the fourth quarter of 2024 compared to a gain on the sale of fixed assets of $382 thousand, an increase of $1.2 million in the fourth quarter of 2025. These increases were partially offset by $148 thousand increase in securities losses. For the year ended December 31, 2025, noninterest income increased by $4.5 million, driven primarily by improved mortgage banking income of $1.1 million, gain on sale of branches of $2.3 million, increase in gain/loss on disposal / write downs of fixed assets of $1.0 million and gain on the early extinguishment of debt of $140 thousand. These increases were partially offset by the increase in securities losses of $168 thousand. Noninterest expense, for the three months ended December 31, 2025, was $8.8 million, an increase of $303 thousand from $8.5 million for the same period in 2024. This increase in expense was primarily driven by an increase in compensation and benefits of $471 thousand due primarily to mortgage commissions and incentive compensation expense, and the increase in other expense of $182 thousand which was associated with the expense of state income tax credits purchased in the fourth quarter of 2025 of $336 thousand. This increase (of $336 thousand) was partially offset by the reduction of various expenses including lower fraud and forgery losses, lower legal fees associated with loan closings, and lower costs related to branches sold. The increases discussed above were partially offset by lower occupancy and equipment expense of $165 thousand, primarily related to reduced expense due to the disposal of the North Carolina branch locations and lower professional fees of $183 thousand, due primarily to the lower audit expense associated with FDICIA compliance and lower consultant fees. Noninterest expense, for year-end December 31, 2025, was $34.7 million and increased $3.1 million from the calendar year 2024. This increase in noninterest expense was primarily related to the increase in compensation and benefits of $2.5 million attributable to increases in salaries of $662 thousand, mortgage commissions of $692 thousand, incentive / bonus expense of $278 thousand and performance-based stock compensation expense of $917 thousand. Other expense increased by $736 thousand, which was primarily attributable to the expense for purchased state income tax credit of $336 thousand and increased expenses related to the sale of the two branches in North Carolina of $258 thousand. The other categories of noninterest expense resulted in a net $120 thousand reduction in expense. During the fourth quarter of 2025, the company purchased state income tax credits (discussed above). These credits reduced state income tax expense by $400 thousand in the fourth quarter of 2025. This impact was reflected in income tax expense of $570 thousand in the fourth quarter of 2025 compared to $915 thousand in the third quarter of 2025. Operating adjustments – 4Q 2025 During the fourth quarter, the company sold a property in Florence which resulted in a gain of $382 thousand and sold five securities resulting in a net loss of $294,000. 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:
Net interest income, for the three months ended December 31, 2025, was $9.6 million compared to $8.4 million for the three months ended December 31, 2024. This increase was the result of an increase in interest income of $646 thousand and a decrease in interest expense of $569 thousand. This resulted in an improved net interest margin to 3.71% from 3.38% 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. 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 1.83% in the fourth quarter of 2025, compared to 2.13% in the fourth quarter of 2024.
Net interest income for calendar year 2025, $36.9 million compared to $31.4 million for calendar year 2024, an increase of $5.6 million. The net interest margin was 3.61% for 2025 compared to 3.25% for 2024. The yield on interest-earning assets improved by 11 basis points to 5.55%, led by loans and investment securities. Yields on all interest-bearing liabilities have declined in all categories, with total yield on interest-bearing liabilities declining by 25 basis points. The total cost of funds, including noninterest-bearing deposits was 1.99% in 2025 compared to 2.23% in 2024.
First Reliance cash and cash equivalents totaled $32.1 million at December 31, 2025, compared to $31.8 million at September 30, 2025. Cash with the Federal Reserve Bank totaled $27.8 million compared to $41.8 million at December 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 $196.0 million and $199.7 million, at December 31, 2025 and September 30, 2025, respectively. The unrealized loss recorded on these securities totaled $5.9 million as of December 31, 2025, compared to $6.5 million at September 30, 2025, a decrease in the unrealized loss during the fourth quarter of $0.6 million (before taxes). During the quarter ended December 31, 2025, deposits decreased by $11.2 million, or 4.6% annualized. During the fourth quarter of 2025, the bank experienced significant movement of deposits from noninterest-bearing transaction accounts and other interest-bearing accounts to money market accounts. See the table on page 11 for detail. The Company had $20.0 million in outstanding borrowings with the Federal Home Loan Bank (FHLB) of Atlanta at December 31, 2025, up from $15.0 million at September 30, 2025. The Company had remaining credit availability in excess of $298.8 million with the FHLB of Atlanta, subject to collateral requirements. First Reliance also has access to approximately $19.0 million through the Federal Reserve Bank discount window with posted collateral. There are currently no borrowings against the Federal Reserve Bank discount window.
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. During the fourth quarter of 2025, the Company repurchased 13,678 shares at a weighted-average cost per share of $10.73.
Asset quality reflected an increase of $2.1 million in nonperforming assets during the fourth quarter of 2025, with nonperforming assets increasing to $2.5 million, which represents 0.23% of total assets. This increase was attributable to a $1.4 million loan in North Carolina that is supported by strong collateral, and two mortgage loans that are 90 days past due and still accruing interest totaling $744 thousand. There was no individual reserve for credit loss assigned to any of these loans at December 31, 2025. The allowance for credit losses as a percentage of total loans receivable increased to 1.13% at December 31, 2025, compared to 1.12% at September 30, 2025, and 1.12% at December 31, 2024. The allowance for credit losses increased by a provision for credit losses of $21 thousand and increased by net recoveries of $65 thousand, during the fourth quarter of 2025. For the full year of 2025, the company recorded $174 thousand in net charge-offs, or 2 basis points of average loans, compared to $259 thousand in net charge-offs, or 4 basis points of average loans, in 2024. Footnotes to table located at the end of this release.
ABOUT FIRST RELIANCE Founded in 1999, First Reliance Bancshares, Inc. (OTCQX: FSRL) is committed to improving the lives of our customers, associates, and the communities in South Carolina that we serve. We achieve this by delivering a better banking experience characterized by exceptional service. With $1.1 billion in assets, we employ 161 professionals across nine locations throughout South Carolina. First Reliance offers a wide range of consumer and business banking solutions, as well as mortgage services. 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 20 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:
SOURCE First Reliance Bancshares, Inc. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Company Codes: OTC-PINK:FSRL,OTC-BB:FSRL,OTCQX:FSRL | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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