PR Newswire | Jan 26, 2022 04:30PM EST

01/26 15:30 CST

First Reliance Bancshares Reports Fourth Quarter 2021 Results FLORENCE, S.C., Jan. 26, 2022

FLORENCE, S.C., Jan. 26, 2022 /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 and full year 2021.

Fourth Quarter and Full Year 2021 Highlights

* Net income for the fourth quarter of 2021 was $0.9 million, or $0.12 per diluted share, compared to $1.4 million, or $0.17 per diluted share, for the fourth quarter of 2020. Net income for the year ended December 31, 2021 was $5.3 million, or $0.65 per diluted share, compared to $10.6 million, or $1.32 per diluted share, for the year ended December 31, 2020. * Total loans increased $21.7 million, or 15.4% annualized, to $586.4 million at December 31, 2021 from $564.7 million at September 30, 2021. For the full year 2021, total loans increased $108.5 million, or 22.7%, from $478.0 million at December 31, 2020. * Total investment securities available for sale increased $23.4 million, or 160.4% annualized, to $81.9 million at December 31, 2021 from $58.5 million at September 30, 2021. For the full year 2021, total investment securities increased $49.2 million, or 150.1%, from $32.8 million at December 31, 2020. * Total deposits decreased $6.7 million, or 3.4% annualized, to $780.8 million at December 31, 2021 from $787.5 million at September 30, 2021. For the full year 2021, total deposits increased $186.8 million, or 31.5%, from $594.0 million at December 31, 2020. * Noninterest-bearing and interest-bearing NOW accounts increased $11.9 million during the quarter to $391.9 million and represent 50.2% of total deposits at December 31, 2021. * Net interest income for the quarter was $6.6 million, which represents an increase of $0.4 million, or 5.7%, on a linked quarter basis and an increase of $0.9 million, or 16.2%, compared to the same period in 2020. Net interest income for the full year was $24.7 million, which represents an increase of $0.5 million, or 1.9%, compared to the same period in 2020. * Asset quality remained strong, with nonperforming assets as a percentage of total assets decreasing to 0.10% at December 31, 2021 from 0.15% at September 30, 2021. * Cost of funds for the fourth quarter of 2021 decreased to 0.23% from 0.24% on a linked quarter basis and from 0.44% for the same period in 2020. * During the fourth quarter, the Company discontinued new loan originations in the indirect auto channel. The Company retained the existing indirect auto loan portfolio and expects to realize compensation cost savings beginning in the first quarter of 2022.

Rick Saunders, Chief Executive Officer, remarked on the year: "2021 was highlighted by strong organic growth in both loans and deposits as well as significant investments in both our commercial and mortgage production teams. Our core banking franchise continues to execute on our strategic plan, highlighted by a 22.7% growth in loans, a 31.5% growth in deposits, and a decrease in nonperforming assets to 0.10% of total assets. We're especially proud of our growth in checking balances, which now make up over 50% of total deposits. In our mortgage business, we saw a normalization of revenues as the year progressed and interest rates increased."

Mr. Saunders continued, "We remain focused on growth and improving operating leverage during the coming year. As the interest rate environment becomes more favorable, we expect our earning asset mix to normalize, especially as it relates to cash. The rise in the yield curve should provide opportunities to accelerate our deployment of cash into investment securities as well as achieve increased yields in new loan originations. Additionally, our strong deposit franchise should allow us to have low deposit betas in a rising rate environment."

Financial Summary

Three Months Ended Twelve Months Ended

Dec 31 Sept 30 June 30 Mar 31 Dec 31 Dec 31 Dec 31

($ in thousands, except per share data) 2021 2021 2021 2021 2020 2021 2020

Earnings:

Net income available to common shareholders $ 932 $ 1,288 $ 1,348 $ 1,708 $ 1,389 $ 5,276 $ 10,616

Earnings per common share, diluted 0.12 0.16 0.17 0.21 0.17 0.65 1.32

Total revenue^(1) 9,253 9,570 10,169 9,917 10,858 38,907 46,461

Net interest margin 3.10% 3.12% 3.40% 3.36% 3.27% 3.25% 3.69%

Return on average assets^(2) 0.41% 0.60% 0.67% 0.93% 0.72% 0.64% 1.46%

Return on average equity^(2) 5.28% 7.29% 7.83% 9.91% 8.08% 7.56% 16.91%

Efficiency ratio^(3) 88.45% 83.83% 81.82% 77.35% 80.05% 82.75% 63.83%

Footnotes to table located at the end of this release.

As of

Dec 31 Sept 30 June 30 Mar 31 Dec 31

(dollars in thousands) 2021 2021 2021 2021 2020

Balance Sheet:

Total assets $ 910,797 $ 911,057 $ 832,241 $ 777,735 $ 710,168

Total loans receivable 586,446 564,738 526,362 490,326 477,968

Total deposits 780,833 787,501 711,505 661,217 594,000

Total transaction deposits^(4) to total deposits 50.19% 48.25% 48.92% 49.78% 48.51%

Loans to deposits 75.11% 71.71% 73.98% 74.16% 80.47%

Bank Capital Ratios:

Total risk-based capital ratio 14.07% 15.80% 14.89% 16.00% 15.67%

Tier 1 risk-based capital ratio 13.03% 14.64% 13.84% 14.87% 14.52%

Tier 1 leverage ratio 9.66% 10.24% 10.43% 11.13% 10.31%

Common equity tier 1 capital ratio 13.03% 14.64% 13.84% 14.87% 14.52%

Asset Quality Ratios:

Nonperforming assets as a percentage of 0.10% 0.15% 0.17% 0.17% 0.21% total assets

Allowance for loan losses as a percentage of 1.20% 1.23% 1.20% 1.26% 1.29% total loans receivable

Footnotes to table located at the end of this release.

CONDENSED CONSOLIDATED INCOME STATEMENTS - Unaudited

Three Months Ended Twelve Months Ended

Dec 31 Sept 30 June 30 Mar 31 Dec 31 Dec 31

($ in thousands, except per share data) 2021 2021 2021 2021 2020 2021 2020

Interest income

Loans $ 6,663 $ 6,382 $ 6,391 $ 5,851 $ 6,156 $ 25,286 $ 26,777

Investment securities 359 294 311 238 231 1,203 1,071

Other interest income 79 58 38 60 75 234 273

Total interest income 7,101 6,734 6,740 6,149 6,462 26,723 28,121

Interest expense

Deposits 224 257 255 286 376 1,022 2,375

Other interest expense 256 213 265 262 388 996 1,495

Total interest expense 480 470 520 548 764 2,018 3,870

Net interest income 6,621 6,264 6,220 5,601 5,698 24,705 24,251

Provision for loan losses 95 100 108 - 350 303 2,908

Net interest income after provision for loan 6,526 6,164 6,112 5,601 5,348 24,402 21,343 losses

Noninterest income

Mortgage banking income 1,407 2,151 2,582 3,390 5,014 9,531 19,524

Service fees on deposit accounts 356 315 272 279 315 1,221 1,310

Debit card and other service charges, 543 532 509 454 427 2,038 1,597 commissions, and fees

Income from bank owned life insurance 93 94 94 93 101 374 409

Gain (loss) on sale of securities, net - 42 39 - 8 81 (212)

Gain on sale of loans - - 326 - - 326 -

Loss on extinguishment of debt - - - - (287) - (287)

Gain (loss) on disposal of fixed assets 69 - - - (528) 69 (528)

Other income 164 172 127 100 110 562 397

Total noninterest income 2,632 3,306 3,949 4,316 5,160 14,202 22,210

Noninterest expense

Compensation and benefits 4,965 5,268 5,518 4,992 5,359 20,742 18,229

Occupancy 666 616 584 597 641 2,463 2,500

Furniture and equipment 374 323 403 450 616 1,551 2,310

Electronic data processing 365 337 319 277 241 1,298 866

Professional fees 202 234 242 238 400 916 1,226

Marketing 150 113 88 69 155 419 410

Other 1,462 1,132 1,166 1,048 1,280 4,808 4,117

Total noninterest expense 8,184 8,023 8,320 7,671 8,692 32,197 29,658

Income before provision for income taxes 974 1,447 1,741 2,246 1,816 6,407 13,895

Income tax expense 42 159 393 538 427 1,131 3,279

Net income available to common shareholders $ 932 $ 1,288 $ 1,348 $ 1,708 $ 1,389 $ 5,276 $ 10,616

Weighted average common shares - basic 7,785 7,750 7,681 7,780 7,931 7,749 7,919

Weighted average common shares - diluted 8,096 8,084 8,164 8,168 8,089 8,142 8,038

Basic income per common share $ 0.12 $ 0.17 $ 0.18 $ 0.22 $ 0.18 $ 0.68 $ 1.34

Diluted income per common share $ 0.12 $ 0.16 $ 0.17 $ 0.21 $ 0.17 $ 0.65 $ 1.32

Net income for the three months ended December 31, 2021 was $0.9 million, or $0.12 per diluted common share, compared to $1.4 million, or $0.17 per diluted common share, for the three months ended December 31, 2020. Net income for the twelve months ended December 31, 2021 totaled $5.3 million, or $0.65 per diluted common share, compared to $10.6 million, or $1.32 per diluted common share for the twelve months ended December 31, 2020.

Noninterest income for the three months ended December 31, 2021 was $2.6 million, a decrease of $2.5 million from $5.2 million for the same period in 2020. Noninterest income is largely driven by the Company's mortgage banking division, which produced net revenue of $1.4 million on $103 million of mortgage sale volume during the three months ended December 31, 2021. Mortgage banking income decreased period-over-period primarily because of a decrease in sale volume as well as reduced margin. Service charges on deposit accounts as well as debit card and other fees increased to a combined $0.9 million, an increase of $0.2 million from $0.7 million for the same period in 2020.

Noninterest expense for the three months ended December 31, 2021 was $8.2 million, a decrease of $0.5 million from $8.7 million for the same period in 2020. This decrease was driven mainly by decreases in compensation and benefits expense of $0.4 million, furniture and equipment expense of $0.2 million, and professional fees of $0.2 million. Included in compensation and benefits for the current quarter is approximately $90 thousand in severance expense. Other noninterest expense for the quarter increased approximately $0.2 million compared the same period in 2020. This increase was mainly driven by expense of $168 thousand for the purchase of South Carolina state income tax credits during the quarter. These credits lowered our state income tax expense by approximately $192 thousand.

NET INTEREST INCOME AND MARGIN - Unaudited

For the Three Months Ended

December 31, 2021 December 31, 2020

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 $ 170,402 $ 72 0.17% $ 134,396 $ 33 0.10%

Investment securities 71,327 359 2.00% 34,175 231 2.69%

Nonmarketable equity securities 837 7 3.44% 3,261 42 5.01%

Loans held for sale 29,269 253 3.43% 48,984 367 3.01%

Loans 575,351 6,410 4.42% 476,253 5,789 4.86%

Total interest-earning assets 847,186 7,101 3.33% 697,069 6,462 3.71%

Allowance for loan losses (6,973) (6,111)

Noninterest-earning assets 76,359 77,828

Total assets $ 916,572 $ 768,786

Liabilities and Shareholders' Equity

Interest-bearing liabilities

NOW accounts $ 143,784 $ 18 0.05% $ 115,304 $ 13 0.04%

Savings & money market 267,404 86 0.13% 160,555 77 0.20%

Time deposits 129,717 120 0.37% 146,406 286 0.79%

Total interest-bearing deposits 540,905 224 0.16% 422,265 376 0.36%

FHLB advances and other borrowings 17,995 47 1.05% 67,242 164 0.96%

Subordinated debentures 25,654 209 3.23% 20,757 224 4.28%

Total interest-bearing liabilities 584,554 480 0.33% 510,264 764 0.60%

Noninterest bearing deposits 249,831 179,037

Other liabilities 11,549 10,720

Shareholders' equity 70,638 68,765

Total liabilities and shareholders' equity $ 916,572 $ 768,786

Net interest income / interest rate spread $ 6,621 3.00% $ 5,698 3.11%

Net interest margin 3.10% 3.27%

For the Twelve Months Ended

December 31, 2021 December 31, 2020

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 $ 139,380 $ 181 0.13% $ 78,452 $ 126 0.16%

Investment securities 55,480 1,203 2.17% 39,237 1,071 2.73%

Nonmarketable equity securities 891 53 5.97% 3,422 147 4.29%

Loans held for sale 33,296 993 2.98% 46,546 1,485 3.19%

Loans 532,090 24,293 4.57% 489,218 25,292 5.17%

Total interest-earning assets 761,137 26,723 3.51% 656,875 28,121 4.28%

Allowance for loan losses (6,602) (4,707)

Noninterest-earning assets 74,896 76,419

Total assets $ 829,431 $ 728,587

Liabilities and Shareholders' Equity

Interest-bearing liabilities

NOW accounts $ 133,350 $ 62 0.05% $ 105,621 $ 47 0.04%

Savings & money market 225,021 350 0.16% 138,210 379 0.27%

Time deposits 134,582 610 0.45% 151,918 1,949 1.28%

Total interest-bearing deposits 492,953 1,022 0.21% 395,749 2,375 0.60%

FHLB advances and other borrowings 17,748 188 1.06% 71,870 681 0.95%

Subordinated debentures 21,351 808 3.79% 18,382 814 4.43%

Total interest-bearing liabilities 532,052 2,018 0.38% 486,001 3,870 0.80%

Noninterest bearing deposits 216,697 168,859

Other liabilities 10,910 10,941

Shareholders' equity 69,772 62,786

Total liabilities and shareholders' equity $ 829,431 $ 728,587

Net interest income / interest rate spread $ 24,705 3.13% $ 24,251 3.48%

Net interest margin 3.25% 3.69%

Net interest income for the three months ended December 31, 2021 was $6.6 million compared to $5.7 million for the three months ended December 31, 2020. This increase was primarily driven by an increase in interest-earning assets as well as a decrease in the cost of interest-bearing liabilities, which decreased from 0.60% to 0.33%. Improvements in costs of interest-bearing liabilities were offset by decreases in asset yield. Yield on interest-earning assets decreased to 3.33% for the three months ended December 31, 2021 from 3.71% for the same period in 2020. This decrease was driven by both a change in balance sheet mix and an overall decrease in interest rates stemming from decreases in the federal funds target rate during 2020.

Net interest income for the twelve months ended December 31, 2021 was $24.7 million compared to $24.3 million for the twelve months ended December 31, 2020. Included within net interest income for these periods was $0.3 million and $0.9 million, respectively, of PPP interest and accelerated fee income. The Company sold the PPP portfolios in full during the second quarter of 2021 and the third quarter of 2020. If interest and fee income on PPP loans are removed from both twelve-month periods, net interest income increased by $1.0 million, or 4.4%, period-over-period. This increase was primarily driven by an increase in interest-earning assets as well as a decrease in the cost of interest-bearing liabilities.

CONDENSED CONSOLIDATED BALANCE SHEETS - Unaudited

As of

Dec 31 Sept 30 June 30 Mar 31 Dec 31

(dollars in thousands) 2021 2021 2021 2021 2020

Assets

Cash and cash equivalents:

Cash and due from banks $ 5,299 $ 4,930 $ 5,486 $ 5,547 $ 5,521

Interest-bearing deposits with banks 144,825 184,739 144,937 115,577 93,167

Total cash and cash equivalents 150,124 189,669 150,423 121,124 98,688

Time deposits in other banks 257 257 256 256 256

Investment securities:

Investment securities available for sale 81,917 58,470 56,881 54,413 32,759

Other investments 837 837 837 837 1,076

Total investment securities 82,754 59,307 57,718 55,250 33,835

Mortgage loans held for sale 23,844 33,667 33,097 48,912 35,642

Loans receivable:

Loans 586,446 564,738 526,362 490,326 477,968

Less allowance for loan losses (7,040) (6,934) (6,323) (6,168) (6,173)

Loans receivable, net 579,406 557,804 520,039 484,158 471,795

Property and equipment, net 22,805 22,364 21,818 18,465 18,491

Mortgage servicing rights 14,057 13,785 13,603 13,353 12,021

Bank owned life insurance 18,476 18,383 18,289 18,195 18,102

Deferred income taxes 4,128 2,798 2,820 3,234 3,452

Other assets 14,946 13,023 14,178 14,788 17,886

Total assets 910,797 911,057 832,241 777,735 710,168

Liabilities

Deposits $ 780,833 $ 787,501 $ 711,505 $ 661,217 $ 594,000

Federal Home Loan Bank advances 10,000 10,000 10,000 10,000 10,000

Federal funds and repurchase agreements 11,372 6,353 8,946 6,955 5,523

Subordinated debentures 15,349 15,498 10,496 10,487 10,459

Junior subordinated debentures 10,310 10,310 10,310 10,310 10,310

Other liabilities 12,131 10,983 11,393 10,548 11,147

Total liabilities 839,995 840,645 762,650 709,517 641,439

Shareholders' equity

Preferred stock - Series D non-cumulative, no par 1 1 1 1 1 value

Common Stock - $.01 par value; 20,000,000 shares 88 88 88 88 82 authorized

Non-Voting Common Stock, $.01 par value; - - - - 4 430,000 shares authorized

Treasury stock, at cost (4,323) (4,281) (3,858) (3,744) (1,680)

Nonvested restricted stock (2,668) (2,737) (2,928) (2,868) (1,487)

Additional paid-in capital 53,856 53,765 53,776 53,617 51,972

Retained earnings 23,985 23,053 21,765 20,417 18,709

Accumulated other comprehensive income (loss) (137) 523 747 707 1,128

Total shareholders' equity 70,802 70,412 69,591 68,218 68,729

Total liabilities and shareholders' equity $ 910,797 $ 911,057 $ 832,241 $ 777,735 $ 710,168

COMMON STOCK SUMMARY - Unaudited

As of

Dec 31 Sept 30 June 30 Mar 31 Dec 31

(shares in thousands) 2021 2021 2021 2021 2020

Voting common shares outstanding 8,793 8,784 8,788 8,784 8,154

Non-voting common shares outstanding - - - - 410

Treasury shares outstanding (535) (530) (489) (481) (234)

Total common shares outstanding 8,258 8,254 8,299 8,303 8,330

Tangible book value per common share^(5) $ 8.46 $ 8.41 $ 8.27 $ 8.09 $ 8.12

Stock price:

High $ 10.74 $ 10.50 $ 10.05 $ 10.00 $ 7.80

Low $ 9.95 $ 9.80 $ 9.65 $ 7.46 $ 5.55

Period end $ 10.20 $ 10.30 $ 9.90 $ 9.90 $ 7.75

Footnotes to table located at the end of this release.

ASSET QUALITY MEASURES - Unaudited

As of

Dec 31 Sept 30 June 30 Mar 31 Dec 31

(dollars in thousands) 2021 2021 2021 2021 2020

Nonperforming Assets

Commercial

Owner occupied RE $ 152 $ 526 $ 535 $ 385 $ 394

Non-owner occupied RE - - - - -

Construction - - - - -

Commercial business - - - - -

Consumer

Real estate 341 346 383 344 461

Home equity - - - - -

Construction - - - - -

Other 84 121 129 164 242

Nonaccruing troubled debt restructurings 205 220 235 252 270

Total nonaccrual loans $ 782 $ 1,213 $ 1,282 $ 1,145 $ 1,367

Other real estate owned 135 150 150 150 164

Total nonperforming assets $ 917 $ 1,363 $ 1,432 $ 1,295 $ 1,531

Nonperforming assets as a percentage of:

Total assets 0.10% 0.15% 0.17% 0.17% 0.21%

Total loans receivable 0.16% 0.24% 0.27% 0.26% 0.32%

Accruing troubled debt restructurings $ 1,405 $ 1,444 $ 1,478 $ 1,544 $ 1,584

Three Months Ended

Dec 31 Sept 30 June 30 Mar 31 Dec 31

(dollars in thousands) 2021 2021 2021 2021 2020

Allowance for Loan Losses

Balance, beginning of period $ 6,934 $ 6,323 $ 6,168 $ 6,173 $ 5,721

Loans charged-off 5 72 59 55 43

Recoveries of loans previously charged-off 16 583 106 50 145

Net charge-offs (recoveries) (11) (511) (47) 5 (102)

Provision for loan losses 95 100 108 - 350

Balance, end of period $ 7,040 $ 6,934 $ 6,323 $ 6,168 $ 6,173

Allowance for loan losses to gross loans receivable 1.20% 1.23% 1.20% 1.26% 1.29%

Allowance for loan losses to nonaccrual loans 900.26% 571.64% 493.21% 538.69% 451.57%

Our asset quality remained strong through December 31, 2021, with nonperforming assets decreasing to $0.9 million from $1.4 million at September 30, 2021. The ratio of nonperforming assets to total assets decreased to 0.10% at December 31, 2021 from 0.15% at September 30, 2021. Other real estate owned remains nominal. The allowance for loan losses as a percentage of total loans receivable decreased slightly to 1.20% at December 31, 2021, compared to 1.23% at September 30, 2021. The Company had net recoveries of $11 thousand for the three months ended December 31, 2021 compared to net recoveries of $102 thousand for the same period in 2020.

LOAN COMPOSITION - Unaudited

As of

Dec 31 Sept 30 June 30 Mar 31 Dec 31

(dollars in thousands) 2021 2021 2021 2021 2020

Commercial real estate $ 333,060 $ 318,849 $ 290,198 $ 253,300 $ 259,486

Consumer real estate 120,079 107,651 97,969 91,504 92,602

Commercial and industrial 60,687 61,778 63,545 60,432 58,445

PPP - - - 16,784 -

Consumer and other 72,620 76,460 74,650 68,306 67,435

Total loans, net of deferred fees 586,446 564,738 526,362 490,326 477,968

Less allowance for loan losses 7,040 6,934 6,323 6,168 6,173

Total loans, net $ 579,406 $ 557,804 $ 520,039 $ 484,158 $ 471,795

DEPOSIT COMPOSITION - Unaudited

As of

Dec 31 Sept 30 June 30 Mar 31 Dec 31

(dollars in thousands) 2021 2021 2021 2021 2020

Noninterest-bearing $ 238,019 $ 246,534 $ 215,814 $ 197,831 $ 167,274

Interest-bearing:

NOW accounts 153,889 133,474 132,269 131,304 120,891

Money market accounts 204,432 216,243 169,707 137,913 119,716

Savings 58,566 59,941 57,880 52,085 46,688

Time, less than $250,000 99,059 103,126 106,219 109,295 105,327

Time, $250,000 and over 26,868 28,183 29,616 32,789 34,104

Total deposits $ 780,833 $ 787,501 $ 711,505 $ 661,217 $ 594,000

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 NOW accounts.

The tangible book value per share is calculated as total shareholders'(5) 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 $911 million. The company employs more than 180 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 16 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. In addition to offering a full range of personalized community banking products and services for individuals, small businesses and corporations, First Reliance offers two unique community-customers programs, which include: Hometown Heroes, a package of benefits for those serving our communities and Check N Save, an outreach program for the unbanked or under-banked. 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 loan losses; (3) the rate of delinquencies and amounts of charge-offs, the level of allowance for loan 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 HaileSEVP & Chief Financial Officer(843) 656-5000rhaile@firstreliance.com

View original content to download multimedia: https://www.prnewswire.com/news-releases/first-reliance-bancshares-reports-fourth-quarter-2021-results-301469107.html

SOURCE First Reliance Bancshares