First Reliance Bancshares Reports Third Quarter 2023 Results

FLORENCE, S.C., Oct. 26, 2023

Third Quarter 2023 Highlights

• Net income for the third quarter of 2023 was $1.4 million, or $0.18 per diluted share, compared to $2.5 million, or $0.31 per diluted share, for the third quarter of 2022.
• During the third quarter of 2023, the Company recorded a loss on the sale of securities of $209 thousand, net of tax, or $0.03 per diluted share. The proceeds from the security sold have been reinvested with an expected earn back of less than six months, which should continue to improve margins and net interest income.
• Net interest income for the quarter was $7.2 million, which is the same as the second quarter of 2023, and a decrease of $1.0 million, or 12.6% compared to the same period in 2022.
• Net interest margin decreased during the quarter to 3.11% at September 30, 2023, compared to 3.16% for the second quarter of 2023, and decreased 60 basis points, from 3.71%, compared to the same period in 2022.
• Total loans increased $12.5 million, or 7.2% annualized, to $706.6 million at September 30, 2023, from $694.1 million at June 30, 2023.
• Total deposits increased $31.1 million, or 14.9% annualized, to $861.2 million at September 30, 2023, from $830.1 million at June 30, 2023.
• During the third quarter of 2023, the Allowance for credit losses (ACL) was 1.19% of loans, or $8.4 million, compared to the second quarter where the ACL was 1.19% of loans, or $8.2 million. The ACL was increased with a $210 thousand charge to the provision for credit losses during the third quarter of 2023.
• Asset quality remained steady with nonperforming assets as a percentage of total assets of 0.05% at September 30, 2023, and June 30, 2023. The Company had net charge-offs of $10 thousand or annualized 0.01% of average loans, during the 3^rd quarter of 2023, compared to net charge-offs of $117 thousand, or annualized 0.07% of average loans, for the quarter ended June 30, 2023.
• Cost of funds, including noninterest-bearing deposits, for the third quarter of 2023 increased to 1.89% from 1.67% on a linked quarter basis and from 0.33% for the same period in 2022.

Rick Saunders, Chief Executive Officer, remarked: "The third quarter continued to provide an uncertain economic environment. Rising interest rates impacted both our net interest margin and our mortgage business, while deposit betas have slowed relative to prior quarters.  Our company was successful in holding expenses flat from the second quarter of 2023, while credit quality remained strong with low net charge offs, nonaccrual loans, and nonperforming assets."