First Reliance Reports Record 2nd Quarter 2020 Net Income Of $3.9 Million And Completes S5.5 Million Subordinated Debt Issuance

FLORENCE, S.C., July 27, 2020 /PRNewswire/ -- First Reliance Bancshares, Inc. (OTC:FSRL), the holding company for First Reliance Bank (collectively, "Company" or the "Company"), today announced its financial results for the three-month period ended June 30, 2020.
First Reliance Reports Record 2nd Quarter 2020 Net Income Of $3.9 Million And Completes S5.5 Million Subordinated Debt Issuance
2020 Second Quarter Highlights

Pre-tax pre-provision earnings of $6.3 million, a 255.8% increase over Q2 2019;

Net income for Q2 2020 improved to $3.9 million, a 195.5% increase over Q2 2019;

Diluted EPS improved to $0.49 per common share, a 206.3% increase over Q2 2019;

Tangible book value increased 13.6% over Q2 2019 to $7.34;

Total risk-based capital improved 213 basis points to 13.31% for Q2 2020, compared to 11.18% for Q2 2019;

Total assets increased 20.2% to $763 million at Q2 2020, compared to $635 million at Q2 2019;

Cost of funds decreased 49 basis points to 0.63% at Q2 2020, compared to 1.12% for Q2 2019;

Transaction deposits to total deposits increased to 49.6% at Q2 2020, compared to 38.2% at Q2 2019;

Completed $5.5 million subordinated debt issuance June 2020 with funds retained at the holding company;

Net interest margin decreased to 3.55% (decreased to 3.73% excluding PPP loans) for Q2 2020,A compared to 4.05% for Q2 2019;

Provision expense totaled $1.2 million for Q2 2020 compared to $169 thousand for Q2 2019;

Total loan deferrals outstanding as of Q2 2020 totaled $14.7 million or 2.9% of total loans;

Asset quality continued to be strong, with nonperforming assets to average assets at 0.21% and past due ratio at 0.34% at Q2 2020;

Consolidated Charleston market offices and Charlotte market offices;

Opened Stratford Road branch office in Winston Salem, North Carolina in Q2 2020; and

Record mortgage revenues of $8.1 million for Q2 2020 compared to $1.8 million for Q2 2019.

"We are extremely pleased to report that First Reliance achieved record-setting net income of $3.9 million, or $0.49 per diluted common share, for the three months ended June 30, 2020.A Our financial performance in Q2 2020 positions the Company to continue its successful financial performance from 2019," Rick Saunders, President and CEO of First Reliance said.A "This is the best quarter in the Company's 21-year history, showing excellent loan growth, increased capital levels, higher liquidity levels, and record-setting mortgage volumes."During Q2 2020, First Reliance recognized record mortgage revenues of $8.1 million compared to $1.8 million during the same period one year ago.A  Additionally, we completed the issuance of $5.5 million of subordinated debt to be held at the holding company, with no immediate plans to inject into the Bank.A We have strategically slowed loan growth, focusing on diversifying our revenue streams, growing our core deposit base, and eliminating unnecessary expenses.
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