FIRST RELIANCE BANCSHARES INC (SUTHCRLN) FLORENCE, S.C., April 28, 2017 /PRNewswire/ -- First Reliance Bancshares, Inc. (OTC: FSRL), the holding company (the "Company") for First Reliance Bank (the "Bank"), reported first quarter 2017 net income after tax of $634,042. Profitability continues to be led by strong loan and deposit growth, and expanding operating efficiencies. In the first quarter of 2017, net income after tax is up 23.32% compared to $514,138 in the first quarter a year ago. Net income to common shareholders improved 329.9% in the first quarter of 2017 to $634,042 compared to $147,499 in the first quarter one year ago. Diluted EPS grew 347.9% to $0.13 as of March 31, 2017 from $0.03 one year ago as a result of redeeming 100% of the TARP funds in the third quarter of 2016.
"Our strong performance in growing low cost deposits and loan production provides opportunities to increase our brand presence throughout South Carolina with further expansions into the Midlands and Coastal regions. We have recently expanded our footprint in Dorchester County with a Loan Production Office in Summerville which is pending regulatory approval to be a full service branch. Given that capital markets are responding positively to our industry, we are giving strong consideration to raising additional capital to fund our growth initiatives," said Rick Saunders, President and CEO.
Financial Highlights (at or for the periods ended March 31, 2017, except as noted)
-- Diluted EPS grew 347.9% to $0.13 as of March 31, 2017 from $0.03 one
year ago.
-- Book value per share is $5.90, up 12% from one year ago
-- Return on Assets of 0.61% and Return on Equity of 9.33%
-- Completion of Series A and B -Preferred Stock (TARP) redemption in third
quarter 2016 with anticipated improvement in earnings per share of $0.21
-- Branch expansion into Summerville and Dorchester County
-- Loan growth is up $37.4 million or 14.04% from one year ago while
earning asset yields remained stable at 4.54%.
-- Non Interest Bearing checking accounts increased $9.2 million to 24.7%
of total deposits from one year ago as we attract new customers through
unique programs and the convenience of digital banking
-- Total revenues increased 10.1% to $5.7 million in 1Q17 from $5.2 million
in 1Q16 reflecting balance sheet growth
-- Mortgage production volume reached record levels of $56.2 million for
1Q2017 compared to $48.2 million one year ago
-- Net interest margin (NIM) was 4.26% as the Company continues to leverage
its low cost of funds at 28bp
-- Bank Tier 1 Leverage ratio improved to 10.12% from 9.97% a quarter
earlier and remains well-capitalized
Review of Income Statement
Net interest income remained relatively flat at $3.4 million compared to a year ago despite increased interest expense of $174,125, associated with the secured loan and subordinated debt used to refinance higher cost Series A and B Preferred stock (TARP) and growth in interest-bearing deposit balances. The Company continues to leverage its low cost of funds at 28bp.
Noninterest income increased 41.9% to $2.4 million for the first quarter of 2017, compared to $1.7 million for the first quarter 2016. The increase in noninterest income was largely due to the increase in gains on sales of mortgage loans, growth in service charges on deposit accounts, and growth in debit card income. Mortgage originations from combined retail and correspondent divisions totaled $56.2 million on 291 loans originated as of March 31. 2017 compared to $48.2 million on 267 loans originated one year ago.
Balance Sheet and Asset Quality
Total assets increased $39.6 million, or 10.4% to $420 million at March 31, 2017, compared to $380.3 million from March 31, 2016.
Loans receivable grew by $37.4 million, or 14%, at March 31. 2017, compared to $266.6 million, at March 31, 2016 largely due to continued growth in all our markets including commercial portfolio, 1-4 family mortgage portfolio and our consumer loan portfolios. 1-4 Family mortgage portfolio loans are up 96.7% year-over-year and Consumer loans are up 31.2%. We have recruited multiple bankers in the Charleston market from some of the recent bank consolidations and they've been a contributing factor to our additional growth. "Our strategic focus has been on revenue diversification through growth in 1-4 mortgage and consumer loan channels and continued emphasis on small business lending. We've seen steady growth in these sectors as the economies in our markets improve in job growth, housing sales and new construction and manufacturing growth. Focus on these sectors allows for better asset yields, improved margins, along with a better diversified loan portfolio which reduces risk," added Saunders
No-cost/low cost deposits increased by $17.2 million, or 10.2%, to $186 million at March 31, 2017, from $168.7 million at March 31, 2016. The Company grew household checking accounts by a strong 5.3% year to date as the Company continues to attract new customers through unique programs such as Hometown Heroes, Moms First and iMatter Programs and with its convenient digital banking services including a new mobile mortgage application. "By delivering exceptional customer service we are able to attract new customers primarily through word of mouth from our satisfied and loyal customers resulting in approximately 30% of our new accounts, said Saunders.
Nonperforming assets declined $1.3 million to $4.9 million at March 31, 2017 compared to one year ago. The ratio of nonperforming assets to total assets declined to 1.16% at March 31, 2017, compared to 1.63% one year earlier. The allowance for loan losses as a percentage of loans was 0.90% at March 31, 2017, compared to 0.97% one year earlier. For the first quarter of 2017, loan charge offs were nominal and largely offset by the bank recoveries.
Capital
First Reliance Bank continues to remain well capitalized under all regulatory measures, with capital ratios exceeding the statutory well-capitalized thresholds by an ample margin. For the quarter ended December 31, 2016, capital ratios were as follows:
Ratio First Reliance Bank Well-capitalized Minimum
----- ------------------- ------------------------
Tier 1 leverage ratio 10.12% 5.00%
Common equity tier 1
capital 11.88% 6.50%
Tier 1 capital ratio 11.88% 8.00%
Total capital ratio 12.70% 10.00%
First Reliance's tangible book value was $5.90, at March 31, 2017, up 12% from $5.28, at March 31, 2016. The Company currently trades at 114.4% of book value as of March 31, 2017.
Providing an incredible experience remains the focus of the bank and the customer satisfaction score of 95%, which is well above bank industry satisfaction scores of 80%, is a strong indication of their commitment to excellence. Customer satisfaction in retail banking in today's world is tied to providing a great digital experience backed by personal service. First Reliance continues to enhance its online banking services and recently added mobile mortgage application to its digital services. The Bank will expand customer payment systems for both consumer and business customers this year.
First Reliance Bank was named among the top 1% most extraordinary banks in the U.S. by the Institute of Extraordinary Banking. We are proud of our culture and our associates who are committed to our communities and making the lives of our customers better.
Regional Economic Conditions - April 2017
According to recent reports, South Carolina's economy continues to show positive trends with the unemployment rate 4.3% as of the end of February. Employment on a year-over-year basis, expanded 1.6 percent, which was on pace with national growth. South Carolina new residential permits in February are up 1.9 percent from the prior month and up 26.8 percent from February 2016 indicating a strong housing demand. For more information on labor markets, household conditions and housing markets in South Carolina, please visit the link below:
https://www.richmondfed.org/~/media/richmondfedorg/research/regional_economy/reports/snapshot/pdf/snapshot_sc.pdf
First Reliance is headquartered in Florence County, which is a proven, successful location for business and industry and home to over 130 companies that have a manufacturing presence including companies like ESAB, Heinz, Honda, GE Healthcare, Johnson Controls, Monster.com, QVC, Roche, and OTIS Elevator. Florence County is world class, with one of the best business climates in the southeast. It has recently been named among America's top 50 cities for business relocation and expansion by Expansion Management Magazine. The business climate of Florence County has brought more than $1 billion in capital investments in the commercial, industrial, institutional arts sectors in the past eight years alone. The South Carolina Arts Commission has recently named downtown Florence as the newest state-recognized cultural district.
ABOUT FIRST RELIANCE BANCSHARES, INC.
First Reliance Bancshares, Inc. is the holding company for First Reliance Bank. The Bank was founded in 1999, employs approximately 130 highly-talented associates and serves the Columbia, Lexington, Charleston, Mount Pleasant, Summerville, Loris, North Myrtle Beach, and Florence markets in South Carolina. First Reliance Bank offers several unique customer programs which include a Hometown Heroes package of benefits to serve those who are serving our communities, Check 'N Save, a community outreach program for the unbanked or under-banked, a Moms First program, and an iMatter program targeted to young people. The Bank also offers a Customer Service Guaranty, a Mortgage Service Guaranty, FREE Coin Machines for customers to use, Mobile Banking, Mobile mortgage applications, and is open on most traditional bank holidays. Its commitment to making customers' lives better and the idea that "There's More to Banking Than Money" has earned the Bank a customer satisfaction rating of 95%.
The common stock of First Reliance Bancshares, Inc. is traded under the symbol FSRL.OB. Additional information about the Company is available on the Company's web site at www.firstreliance.com.
This press release contains forward-looking statements about branch openings within the meaning of the Securities Litigation Reform Act of 1995. Forward-looking statements give our expectations or forecasts of future events. The preliminary results for the three and six months ended June 30, 2015 presented herein above are the Company's expectations. However, these results are subject to adjustment by management before the audit is completed and may be adjusted based upon the results of the audit. Should management or audit adjustments be necessary, audited results could differ materially from these preliminary results.
Any or all of our forward-looking statements here or in other publications may turn out to be incorrect. They can be affected by inaccurate assumptions or by known or unknown risks and uncertainties. Many such factors will be important in determining our actual future results. Consequently, no forward- looking statements can be guaranteed. Our actual results may vary materially, and there are no assurances about the performance of our common stock.
We undertake no obligation to correct or update any forward-looking statements, whether as a result of new information, future results or otherwise.
Contact Jeffrey A. Paolucci, Executive Vice President and Chief Financial Officer, (888)543-5510.
First Reliance Bancshares, Inc. and Subsidiary
Consolidated Balance Sheets
Year over Year Year over Year
March 31 December 31 March 31 $ Change % Change
2017 2016 2016
Assets
Cash and cash equivalents:
Cash and due from banks $5,148,814 $4,810,304 $4,777,813 $371,001 7.77%
Interest-bearing deposits with other banks 18,048,484 22,287,560 14,190,513 $3,857,971 27.19%
Total cash and cash equivalents 23,197,298 27,097,864 18,968,326 $4,228,972 22.29%
---------- ---------- ----------
Time deposits in other banks 101,919 101,816 101,715 $204 0.20%
Securities available-for-sale 17,571,229 17,862,635 11,186,354 $6,384,875 57.08%
Securities held-to-maturity (Estimated fair value of $19,602,624,
$20,842,140 and $25,121,907 at March 31, 2017, December 31, 2016 and March 31, 2016 19,242,080 20,438,084 24,173,520 $(4,931,440) -20.40%
Nonmarketable equity securities 806,700 734,300 606,800 $199,900 32.94%
Total investment securities 37,620,009 39,035,019 35,966,674 $1,653,335 4.60%
---------- ---------- ----------
Mortgage loans held for sale 7,087,154 5,355,532 8,058,647 $(971,493) -12.06%
Loans receivable 304,024,206 288,126,331 266,601,285 $37,422,921 14.04%
Less allowance for loan losses (2,785,916) (2,648,535) (2,711,576) $(74,340) 2.74%
Loans, net 301,238,290 285,477,796 263,889,709 $37,348,581 14.15%
----------- ----------- -----------
Premises, furniture and equipment, net 18,702,546 18,873,718 22,869,271 $(4,166,725) -18.22%
Accrued interest receivable 867,318 961,449 867,159 $159 0.02%
Other real estate owned 2,414,662 2,870,484 2,952,733 $(538,071) -18.22%
Cash surrender value life insurance 14,046,700 13,964,986 13,703,252 $343,448 2.51%
Net deferred tax assets 8,158,865 8,463,657 9,918,842 $(1,759,977) -17.74%
Mortgage servicing rights 4,702,803 4,211,582 1,458,133 $3,244,670
Other assets 1,910,135 1,707,519 1,639,407 $270,728 16.51%
Total assets $420,047,698 $408,121,422 $380,393,868 $39,653,830 10.42%
============ ============ ============
Liabilities and Shareholders' Equity
Liabilities
Deposits
Noninterest-bearing transaction accounts $84,866,269 $76,175,393 $75,658,916 $9,207,353 12.17%
Interest-bearing transaction accounts 74,571,228 76,736,892 70,030,844 $4,540,384 6.48%
Savings 116,795,905 115,741,395 101,583,860 $15,212,045 14.97%
Time deposits $250,000 and over 9,649,918 17,757,192 18,807,154 $(9,157,236) -48.69%
Other time deposits 57,778,166 50,124,647 45,509,583 $12,268,583 26.96%
Total deposits 343,661,486 336,535,519 311,590,357 $32,071,129 10.29%
Securities sold under agreement to repurchase 14,727,395 11,088,526 9,684,987 $5,042,408 52.06%
Advances from Federal Home Loan Bank 9,000,000 8,000,000 5,000,000 $4,000,000 80.00%
Notes Payable 7,000,000 6,893,211 7,000,000 $ - 100.00%
Junior subordinated debentures 10,310,000 10,310,000 3,310,000 $7,000,000 211.48%
Subordinated debentures 4,804,997 4,896,398 0 $4,804,997
Accrued interest payable 213,673 298,950 54,981 $158,692 288.63%
Other liabilities 2,781,224 3,431,091 3,293,097 $(511,873) -15.54%
Total liabilities 392,498,775 381,453,695 339,933,422 $52,565,353 15.46%
----------- ----------- -----------
Shareholders' Equity
Preferred stock
Series A cumulative perpetual preferred stock -0 shares issued and outstanding at March 31, 2017 and December 31, 2016 and 15,349 shares as of March 31, 2016 - - 15,179,709 $(15,179,709) -100.00%
Series B cumulative perpetual preferred stock - 0 shares issued and outstanding at Mach 31, 2017 and December 31, 2016 and 767 shares as of March 31, 2016 - - 767,000 $(767,000) -100.00%
Series D preferred stock - 599 , 600 and 610 shares issued and outstanding at March 31, 2017, December 31, 2016 and March 31, 2016, respectively 599 600 610 $(11) -
Common stock, $0.01 par value; 20,000,000 shares authorized,
4,707,291.000 4,679,881.000 and 4,680,681.000 shares issued and outstanding
at March 31, 2017, December 31, 2016 and March 31, 2016 , respectively 47,089 46,798 46,807 $282 0.60%
Capital surplus 25,241,707 25,071,543 25,645,087 $(403,380) -1.57%
Treasury stock, at cost, 39,069 shares at March 31, 2017 and
December 31, 2016, respectively and 38,663 shares at March 31, 2016 (219,106) (219,106) (217,230) $(1,876) 0.86%
Nonvested restricted stock (247,932) (262,153) (311,809) $63,877 -20.49%
Retained Earnings/Deficit 2,896,784 2,262,742 (745,028) $3,641,812 -488.82%
Accumulated other comprehensive (loss) income (170,218) (232,697) 95,300 $(265,518) -278.61%
Total shareholders' equity 27,548,923 26,667,727 40,460,446 $(12,911,523) -31.91%
---------- ---------- ----------
Total liabilities and shareholders' equity $420,047,698 $408,121,422 $380,393,868 $39,653,830 10.42%
============ ============ ============
First Reliance Bancshares, Inc. and Subsidiary
Consolidated Statements of Operations Year over Year
$ Change % Change
Three Months Ended Three Months Ended Three Months Ended
March 31, 2017 December 31, 2016 March 31, 2016
Interest income:
Loans, including fees $3,675,451 $3,617,498 $3,438,321 $237,130 6.90%
Investment securities:
Taxable 198,657 205,420 214,427 $(15,770) -7.35%
Tax exempt 28,201 28,220 28,329 $(128) -0.45%
Other interest income 37,557 26,422 25,366 $12,191 48.06%
Total 3,939,867 3,877,560 3,706,443 $233,424 6.30%
--------- --------- ---------
Interest expense:
Time deposits 128,501 113,044 75,071 $53,430 71.17%
Other deposits 91,899 81,088 68,450 $23,449 34.26%
Other interest expense 271,751 274,014 71,785 $199,966 278.56%
Total 492,151 468,146 215,306 $276,845 128.58%
------- ------- -------
Net interest income 3,447,716 3,409,414 3,491,136 $(43,420) -1.24%
Provision for loan losses (151,500) - - $(151,500) #DIV/0!
-------- --- ---
Net interest income after provision for loan losses 3,296,216 3,409,414 3,491,136 $(194,920) -5.58%
--------- --------- ---------
Noninterest income:
Service charges on deposit accounts 345,947 357,712 332,654 $13,293 4.00%
Gain on sale of mortgage loans 1,608,433 1,698,913 924,338 $684,095 74.01%
Income from bank owned life insurance 81,715 86,602 87,641 $(5,926) -6.76%
Other service charges, commissions, and fees 325,294 318,904 312,608 $12,686 4.06%
Gain on sale of available-for-sale securities - - - $ - 100.00%
Other 70,918 716,450 57,154 $13,764 24.08%
Total 2,432,307 3,178,581 1,714,395 $717,912 41.88%
--------- --------- ---------
Noninterest expenses:
Salaries and benefits 2,835,033 3,153,885 2,482,437 $352,596 14.20%
Occupancy 400,632 385,007 371,480 $29,152 7.85%
Furniture and equipment related expenses 400,637 403,977 360,633 $40,004 11.09%
Other 1,155,058 1,203,331 1,170,760 $(15,702) -1.34%
Total 4,791,360 5,146,200 4,385,310 $406,050 9.26%
--------- --------- ---------
Income before income taxes 937,163 1,441,795 820,221 $116,942 14.26%
Income tax 303,121 484,579 306,083 $(2,962) -0.97%
------- ------- -------
Net income 634,042 957,216 514,138 $119,904 23.32%
Preferred stock dividends accrued - - 366,639 $(366,639) -100.00%
Net income available to common shareholders $634,042 $957,216 $147,499 $486,543 329.86%
======== ======== ========
Average common shares outstanding, basic 4,585,048 4,438,570 4,428,788 $156,260 3.53%
Average common shares outstanding, diluted 4,718,546 4,554,138 4,543,303 $175,243 3.86%
Income per common share:
Basic income per share $0.14 $0.22 $0.03 $0 633.33%
Diluted income per share 0.13 0.21 0.03 $0 600.00%
First Reliance Bancshares, Inc. and Subsidiary
Consolidated Statements of Operations Year over Year
$ Change % Change
March 2017 December 2016 March 2016
Interest income:
Loans, including fees $3,675,451 $14,363,973 $3,438,321 $10,925,652 317.76%
Investment securities:
Taxable 198,657 801,878 214,427 $587,451 273.96%
Tax exempt 28,201 113,099 28,329 $84,770 299.23%
Other interest income 37,557 109,578 25,366 $84,212 331.99%
Total 3,939,867 15,388,528 3,706,442 $11,682,086 315.18%
--------- ---------- ---------
Interest expense:
Time deposits 128,501 366,955 75,071 $291,884 388.81%
Other deposits 91,899 300,580 68,450 $232,130 339.12%
Other interest expense 271,751 630,250 71,785 $558,465 777.97%
Total 492,151 1,297,785 215,306 $1,082,479 502.76%
------- --------- -------
Net interest income 3,447,716 14,090,743 3,491,136 $10,599,607 303.61%
Provision for loan losses (151,500) 9,075 0 $9,075 #DIV/0!
-------- ----- ---
Net interest income after provision for loan losses 3,296,216 14,081,668 3,491,136 $10,590,532 303.35%
--------- ---------- ---------
Noninterest income:
Service charges on deposit accounts 345,947 1,385,517 332,654 $1,052,863 316.50%
Gain on sale of mortgage loans 1,608,433 6,153,308 924,338 $5,228,970 565.70%
Income from bank owned life insurance 81,715 349,374 87,641 $261,733 298.64%
Other service charges, commissions, and fees 325,294 1,236,026 312,608 $923,418 295.39%
Gain on sale of available-for-sale securities - 13,261 - $13,261 #DIV/0!
Gain on sale of premises 0 652,367 - $652,367 #DIV/0!
Other 70,918 240,780 57,154 $183,626 321.28%
Total 2,432,307 10,030,633 1,714,395 $8,316,238 485.08%
--------- ---------- ---------
Noninterest expenses:
Salaries and benefits 2,835,033 11,270,540 2,482,437 $8,788,103 354.01%
Occupancy 400,632 1,572,271 371,480 $1,200,791 323.25%
Furniture and equipment related expenses 400,637 1,517,840 360,633 $1,157,207 320.88%
Other 1,155,058 4,428,482 1,170,760 $3,257,722 278.26%
Total 4,791,360 18,789,133 4,385,310 $14,403,823 328.46%
--------- ---------- ---------
Income before income taxes 937,163 5,323,168 820,221 $4,502,947 548.99%
Income tax expense (benefit) 303,121 1,801,260 306,083 $1,495,177 488.49%
------- --------- -------
Net income 634,042 3,521,908 514,138 $3,007,770 585.01%
Preferred stock dividends accrued - 937,848 366,639 $571,209 155.80%
Deemed dividends on preferred stock resulting from - - -
net accretion of discount and amortization of premium - - -
Net income available to common shareholders $634,042 $2,584,060 $147,499 $2,436,561 1651.92%
======== ========== ========
Average common shares outstanding, basic 4,585,048 4,438,570 4,428,788 $9,782 0.22%
Average common shares outstanding, diluted 4,718,546 4,554,138 4,543,303 $10,835 0.24%
Income per common share:
Basic income per share 0.14 $0.58 $0.03 $1 1648.06%
Diluted income per share 0.13 0.57 0.03 $1 1647.75%
Asset Quality and Capital Adequacy
(dollars in thousands, except asset quality and per share data) As of and for the Three Months Ended
------------------------------------
March 31, 2017 December 31, 2016 March 31, 2016
-------------- ----------------- --------------
Income Statement Data
Net Interest Income 3,447,716 3,409,414 3,491,136
Provision for loan losses (151,500) - -
Noninterest Income 2,432,307 3,178,581 1,714,395
Noninterest Expense 4,791,360 5,146,200 4,385,310
Income Tax (Benefit) 303,121 484,579 306,083
Net Income 634,042 957,216 514,138
Asset Quality
Loans 90 days past due & still accruing - - -
Nonaccrual loans 2,440 2,588 3,224
----- ----- -----
Total nonperforming loans 2,440 2,588 3,224
304,024 288,126 266,601
OREO and repossessed assets 2,415 2,870 2,953
----- ----- -----
Total Nonperforming Assets 4,855 5,458 6,177
===== ===== =====
Nonperforming loans to loans 0.80% 0.90% 1.21%
Nonperforming assets to total assets 1.16% 1.34% 1.63%
Allowance for loan losses to total loans 0.90% 0.90% 0.97%
Allowance for loan losses to nonperforming loans 114.18% 102.34% -84.11%
Capital Data (at quarter end)
Book value per share 5.90 5.75 5.28
Tangible book value per share 5.90 5.75 5.28
Per Share Data
Shares Outstanding- basic 4,585,048 4,438,570 4,428,788
Shares Outstanding- diluted 4,718,546 4,554,138 4,543,303
Earnings Per Share - basic $0.14 $0.22 $0.03
Earnings Per Share -diluted 0.13 0.21 0.03
Profitability Ratios
Net Interest Margin 4.26% 4.37% 4.46%
Return on Assets 0.61% 0.95% 0.55%
Return on Equity 9.33% 14.56% 5.15%
Capital Adequacy- Bank Only
Tier 1 leverage ratio 10.11% 9.97% 11.36%
Common Equity Tier 1 capital 11.88% 12.21% 12.90%
Tier 1 capital ratio 11.88% 12.21% 12.90%
Total capital ratio 12.71% 13.03% 13.75%
Total risk weighted assets 338,089 323,406 318,767
Contact:
Jeffrey A. Paolucci, EVP & CFO
(888) 543-5510
jpaolucci@firstreliance.com
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/first-reliance-reports-record-1q17-net-income-of-634042-up-2332-from-1q16-300447762.html
SOURCE First Reliance Bancshares, Inc.
