First Reliance Bancshares Reports Second Quarter 2025 Results

First RelianceBancshares, Inc. (OTC:FSRL), the holding company for First Reliance Bank (collectively, “First Reliance” or the “Company”), today announced its financial results for the second quarter of 2025.

https://mma.prnewswire.com/media/397011/First_Reliance__Logo.jpg

Second Quarter 2025 Highlights

— Net income increased 88.1% for the second quarter of 2025 to $3.7 million, or $0.44 per diluted share, compared to $1.9 million, or $0.24 per diluted share, for the second quarter of 2024. For the six months ended June 30, 2025, net income totaled $5.3 million, or $0.63 per diluted share, compared to $3.2 million, or $0.39 per diluted share for the same period in 2024. Operating earnings (Non-GAAP) were $2.2 million, or $0.27 per diluted share, for the second quarter of 2025, compared to $1.9 million, or $0.24 per diluted share, for the second quarter of 2024. For the first half of 2025, operating earnings (Non-GAAP) totaled $3.9 million or $0.47 per diluted share, compared to $3.2 million, or $0.39 per diluted share, for the first half of 2024.

— Book value per share increased $1.58, or 17.1%, from $9.22 per share at June 30, 2024, to $10.80 per share at June 30, 2025. Tangible book value per share (Non-GAAP) increased $1.58, or 17.3%, from $9.13 per share at June 30, 2024, to $10.71 per share at June 30, 2025.

— Net interest income for the second quarter of 2025 was $9.1 million, which represents an increase of $1.4 million, or 18.8%, compared to the same quarter one year ago. Compared to the first quarter of 2025, the increase was $344,000, or 3.9%.

— Net interest margin increased during the second quarter of 2025 to 3.53%, compared to 3.49% in the first quarter of 2025, and increased 33 basis points compared to the second quarter of 2024.

— Total loans held for investment increased $280 thousand, or 0.14% annualized, to $784.7 million at June 30, 2025, from $784.5 million at March 31, 2025. For the year, loan growth totaled $31.0 million, or 8.3% annualized.

— Unfunded commitments increased during the quarter by $22.3 million, primarily in construction loans. This resulted in an increase in the unfunded commitment reserve of $154 thousand to $925 thousand from $771 thousand at March 31, 2025.

— Total deposits decreased $28.3 million, or 11.6% annualized, to $950.3 million at June 30, 2025, from $978.7 million at March 31, 2025. This was primarily the result of the sale of the two North Carolina branches with $55.9 million in deposits in May 2025 to Carter Bank.

— Asset quality remained strong with nonperforming assets falling to $205 thousand, or 0.02% of total assets at June 30, 2025, compared to $933 thousand, or 0.09% of total assets at March 31, 2025. This decline was largely the result of the full collection on one loan and fully charging off another loan.

— 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. In determining stock repurchases, management will consider the following factors: the Company's stock price, expected growth, capital position, alternative uses of capital, liquidity, financial performance, current and expected macroeconomic environment, regulatory requirements and any other relevant factors.

Rick Saunders, Chief Executive Officer, commented: “Tangible book value per share improved by $1.58 per share over the past year to $10.71, an increase of 17.3%. We grew deposit balances by $27.6 million, or 11.3% annualized, excluding the deposits sold to Carter Bank. Loan growth was muted in the second quarter of 2025, however, loan commitments will be funding over the next several quarters. Our margin expanded by four basis points to 3.53% in the second quarter of 2025 from 3.49% last quarter, as the yield on loans improved to 5.79%. Our return on average equity was 10.98%, excluding nonrecurring items. We remain focused on growing the markets in South Carolina with our bank and mortgage products and providing high-touch and quality service to our customers.”

Financial Summary Three Months Ended Six Months Ended Jun 30 Mar 31 Dec 31 Sep 30 Jun 30 Jun 30 Jun 30($ in thousands, except per share data) 2025 2025 2024 2024 2024 2025 2024Earnings:Net income available to common shareholders $ 3,653 $ 1,613 $ 918 $ 1,825 $ 1,942 $ 5,266 $ 3,180Operating earnings (Non-GAAP) 2,248 1,665 1,698 1,950 1,942 3,913 3,180Earnings per common share, diluted (GAAP) 0.44 0.19 0.11 0.22 0.24 0.63 0.39Operating earnings per common share, diluted (Non-GAAP) 0.27 0.20 0.21 0.24 0.24 0.47 0.39Total revenue(1) 13,920 11,158 9,809 9,855 10,226 25,078 19,916Net interest margin 3.53% 3.49% 3.38% 3.27% 3.20% 3.54% 3.16%Return on average assets(2) 1.32% 0.59% 0.35% 0.69% 0.75% 0.97% 0.63%Return on average assets – Operating Non-GAAP(2) 0.81% 0.61% 0.64% 0.74% 0.75% 0.72% 0.63%Return on average equity(2) 17.84% 8.15% 4.66% 9.60% 10.69% 13.14% 8.93%Return on average equity – Operating Non-GAAP(2) 10.98% 8.41% 8.62% 10.26% 10.69% 9.76% 8.93%Efficiency ratio(3) 64.61% 75.52% 86.42% 76.90% 75.21% 69.46% 80.81%Adjusted efficiency ratio – Non-GAAP(3) 74.03% 75.04% 78.29% 75.66% 75.21% 74.52% 80.81% As of Jun 30 Mar 31 Dec 31 Sep 30 Jun 30($ in thousands) 2025 2025 2024 2024 2024Balance Sheet:Total assets $ 1,102,203 $ 1,097,389 $ 1,067,104 $ 1,071,480 $ 1,058,395Total loans receivable 784,749 784,469 753,738 739,219 739,433Total deposits 950,339 978,667 951,411 951,948 899,799Total transaction deposits(4) to totaldeposits 39.50% 39.46% 38.64% 38.82% 39.18%Loans to deposits 82.58% 80.16% 79.22% 77.65% 82.18%Bank Capital Ratios:Total risk-based capital ratio 12.88% 12.99% 13.48% 13.56% 13.34%Tier 1 risk-based capital ratio 11.84% 11.92% 12.43% 12.51% 12.28%Tier 1 leverage ratio 9.74% 9.80% 9.96% 9.87% 10.01%Common equity tier 1 capital ratio 11.84% 11.92% 12.43% 12.51% 12.28%Asset Quality Ratios:Nonperforming assets as a percentage of 0.02% 0.09% 0.11% 0.09% 0.03%total assetsAllowance for credit losses as a percentage 1.09% 1.10% 1.12% 1.13% 1.15%of total loans receivableAnnualized net charge-offs as a percentage 0.03% 0.08% 0.00% 0.03% 0.05%of average total loan receivablesCONDENSED CONSOLIDATED INCOME STATEMENTS – Unaudited Three Months Ended Six Months Ended Jun 30 Mar 31 Dec 31 Sep 30 Jun 30 Jun 30($ in thousands, except per share data) 2025 2025 2024 2024 2024 2025 2024Interest incomeLoans $ 11,657 $ 11,293 $ 11,053 $ 10,930 $ 10,746 $ 22,950 $ 20,831Investment securities 2,145 2,166 2,015 1,969 1,875 4,311 3,847Other interest income 505 318 512 623 419 823 710Total interest income 14,307 13,777 13,580 13,522 13,040 28,084 25,388Interest expenseDeposits 4,703 4,468 4,613 4,833 4,652 9,171 8,984Other interest expense 495 544 564 585 722 1,039 1,530Total interest expense 5,198 5,012 5,177 5,418 5,374 10,210 10,514Net interest income 9,109 8,765 8,403 8,104 7,666 17,874 14,874Provision for credit losses 88 707 141 (83) 55 795 262Net interest income after provision for credit losses 9,021 8,058 8,262 8,187 7,611 17,079 14,612Noninterest incomeMortgage banking income 1,586 1,351 1,207 805 1,416 2,937 2,791Service fees on deposit accounts 299 319 327 327 307 618 643Debit card and other service charges, 543 529 550 528 568 1,072 1,087commissions, and feesIncome from bank owned life insurance 104 102 108 105 103 206 205Loss on sale of securities, net – (182) (146) (162) – (182) -Gain on sale of branches 2,313 – – – – 2,313 -Gain on early extinguishment of debt – 140 – – – 140 -Gain (loss) on disposal /write down of fixed assets (200) – (838) – – (200) 20Other income 166 134 198 148 166 300 296Total noninterest income 4,811 2,393 1,406 1,751 2,560 7,204 5,042Noninterest expenseCompensation and benefits 5,574 5,281 5,028 4,682 4,693 10,855 9,571Occupancy and equipment 770 791 890 848 837 1,561 1,678Data processing, technology, and communications 1,143 1,156 1,184 994 1,119 2,299 2,158Professional fees 248 153 268 265 96 401 206Marketing 175 123 103 66 102 298 262Other 1,083 923 1,003 723 844 2,006 1,670Total noninterest expense 8,993 8,427 8,476 7,578 7,691 17,420 15,545Income before provision for income taxes 4,839 2,024 1,192 2,360 2,480 6,863 4,109Income tax expense 1,186 411 273 535 538 1,597 929Net income available to common shareholders $ 3,653 $ 1,613 $ 919 $ 1,825 $ 1,942 $ 5,266 $ 3,180Addback loss on fixed assets, net of tax 151 – 646 – – 151 -Subtract gain on sale of branches, net of tax (1,746) – – – – (1,746) -Subtract gain on early extinguishment of debt, net of tax – (111) – – – (111) -Addback expenses related to branch sale, net of tax 190 18 21 – – 208 -Addback securities losses, net of tax – 145 113 125 – 145 -Operating net income (non-GAAP) 2,248 1,665 1,699 1,950 1,942 3,913 3,180Weighted average common shares – basic 7,892 7,868 7,851 7,847 7,851 7,880 7,844Weighted average common shares – diluted 8,350 8,331 8,274 8,221 8,260 8,342 8,273Basic net income per common share* $ 0.46 $ 0.21 $ 0.12 $ 0.23 $ 0.25 $ 0.67 $ 0.41Diluted net income per common share* $ 0.44 $ 0.19 $ 0.11 $ 0.22 $ 0.24 $ 0.63 $ 0.39Operating basic net income per common share (nonGAAP)* $ 0.28 $ 0.21 $ 0.22 $ 0.25 $ 0.25 $ 0.50 $ 0.41Operating diluted net income per common share (nonGAAP)* $ 0.27 $ 0.20 $ 0.21 $ 0.24 $ 0.24 $ 0.47 $ 0.39*Note that the sum of the quarter may not equal the YTD result due to rounding of earnings per share each quarter, given the weighted average shares outstanding basic and diluted.

Footnotes to table located at the end of this release.

Net income for the three months ended June 30, 2025, was $3.7 million, or $0.44 per diluted common share, compared to $1.9 million, or $0.24 per diluted common share, for the three months ended June 30, 2024. Operating net income (Non-GAAP), for the three months ended June 30, 2025, was $2.2 million, or $0.27 per diluted common share, compared to $1.9 million, or $0.24 per diluted common share for the three months ended June 30, 2024. Net income for the six months ended June 30, 2025, totaled $5.3 million, or $0.63 per diluted common share, compared to $3.2 million, or $0.39 per diluted common share. On an operating basis, diluted EPS (Non-GAAP) was $0.47 per diluted common share, for the six months ended June 30, 2025, which includes adding back the impact of securities losses, net of tax, the impact of fixed asset write downs, 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 and the gain from the early extinguishment of debt, net of tax, compared to $0.39 per diluted common share, for the six months ended June 30, 2024.

Noninterest income, for the three months ended June 30, 2025, was $4.8 million, an increase of $2.2 million from $2.6 million for the same period in 2024. Noninterest income was primarily driven by mortgage banking income and totaled $1.6 million in the second quarter of 2025 compared to $1.4 million in the second quarter of 2024. In the second quarter of 2025, the Company sold its two branches in NC recognizing a gain of $2.3 million and wrote down a parcel of land by $200 thousand.

For the six months ended June 30, 2025, noninterest income increased by $2.2 million, driven by improved mortgage banking income of $146 thousand, gain on sale of branches of $2.3 million offset by the write down of fixed asset of $200 thousand, compared to the same period in 2024.

Noninterest expense, for the three months ended June 30, 2025, was $9.0 million, an increase of $1.3 million from $7.7 million for the same period in 2024. This increase in expense was primarily driven by an increase in compensation and benefits of $881 thousand due primarily to mortgage commissions, salaries and stock compensation expense, an increase of $152 thousand related to additional professional fees related to audit expense associated with Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICIA) compliance, and $239 thousand in other expense primarily associated with costs related to the sale of the two branches in North Carolina (NC).

Noninterest expense, for the six months ended June 30, 2025, was $17.4 million and increased $1.9 million over the same period one year ago. This increase in noninterest expense was primarily related to compensation and benefits of $1.3 million attributable to mortgage commissions and stock compensation expense, and an increase in professional fees related to audit expense associated with FDICIA compliance, and $336 thousand of other expense primarily associated with cost related to the sale of the two branches in NC.

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:

— Paid off subordinated indebtedness of $1.0 million with $860 thousand, resulting in a pre-tax gain of $140 thousand,

— Recorded pre-tax securities losses of $182 thousand, and

— Recorded pre-tax branch disposal related costs of $23 thousand.

NET INTEREST INCOME AND MARGIN – Unaudited -QTD For the Three Months Ended June 30, 2025 March 31, 2025 June 30, 2024 Average Income/ Yield/ Average Income/ Yield/ Average Income/ Yield/($ in thousands) Balance Expense Rate Balance Expense Rate Balance Expense RateAssetsInterest-earning assetsFederal funds sold and interest- $ 46,216 $ 478 4.15% $ 37,230 $ 292 3.18% $ 29,743 $ 379 5.13%bearing depositsInvestment securities 186,573 2,145 4.61% 180,710 2,166 4.86% 168,826 1,875 4.47%Nonmarketable equity securities 1,665 28 6.65% 1,496 26 7.06% 2,037 40 7.82%Loans held for sale 16,269 353 8.70% 23,551 364 6.27% 24,965 446 7.19%Loans 783,489 11,304 5.79% 775,652 10,929 5.71% 736,944 10,300 5.62%Total interest-earning assets 1,034,212 14,307 5.55% 1,018,639 13,777 5.49% 962,515 13,040 5.45%Allowance for credit losses (8,652) (8,616) (8,508)Noninterest-earning assets 80,987 81,136 79,658Total assets $ 1,106,547 $ 1,091,159 $ 1,033,665Liabilities and Shareholders' EquityInterest-bearing liabilitiesNOW accounts $ 158,726 $ 242 0.61% $ 158,710 $ 230 0.59% $ 140,821 $ 247 0.70%Savings & money market 435,548 3,127 2.88% 429,861 2,872 2.71% 366,431 2,712 2.98%Time deposits 158,378 1,334 3.38% 156,527 1,366 3.54% 179,539 1,694 3.79%Total interest-bearing deposits 752,652 4,703 2.51% 745,098 4,468 2.43% 686,792 4,652 2.72%FHLB advances and other 17,913 191 4.29% 15,162 213 5.70% 26,917 356 5.32%borrowingsSubordinated debentures 23,228 304 5.25% 24,761 331 5.42% 25,737 366 5.72%Total interest-bearing 793,793 5,198 2.63% 785,021 5,012 2.59% 739,446 5,374 2.92%liabilitiesNoninterest bearing deposits 217,979 214,733 207,573Other liabilities 12,885 12,185 13,971Shareholders' equity 81,890 79,220 72,674Total liabilities and $ 1,106,547 $ 1,091,159 $ 1,033,665shareholders' equityNet interest income (tax $ 9,109 2.92% $ 8,765 2.90% $ 7,666 2.53%equivalent)/interestrate spreadNet Interest Margin 3.53% 3.49% 3.20%Cost of funds, including 2.06% 2.03% 2.28%noninterest-bearing deposits

Net interest income, for the three months ended June 30, 2025, was $9.1 million compared to $7.7 million for the three months ended June 30, 2024. This increase was the result of an increase in interest income of $1.3 million and a decrease in interest expense of $176,000. This resulted in an improved net interest margin to 3.53% from 3.20% one year ago. Loans and securities had the largest gains in income and in yields compared to the prior year. While lower yields in all categories of interest-bearing liabilities contributed to the improved net interest margin. In addition, the total cost of funds, including noninterest-bearing deposits, decreased to 2.06% in the second quarter of 2025, compared to 2.28% in the second quarter of 2024.

NET INTEREST INCOME AND MARGIN – Unaudited – YTD For the Six Months Ended June 30, 2025 June 30, 2024 Average Income/ Yield/ Average Income/ Yield/(dollars in thousands) Balance Expense Rate Balance Expense RateAssetsInterest-earning assetsFederal funds sold and interest-bearing deposits $ 39,262 $ 769 3.95% $ 29,419 $ 645 4.40%Investment securities 183,408 4,311 4.74% 169,084 3,847 4.56%Nonmarketable equity securities 1,676 54 6.45% 2,093 65 6.21%Loans held for sale 17,937 717 8.06% 20,025 700 7.01%Loans 776,521 22,233 5.77% 723,620 20,131 5.58%Total interest-earning assets 1,018,804 28,084 5.56% 944,241 25,388 5.39%Allowance for credit losses (8,593) (8,450)Noninterest-earning assets 80,765 79,850Total assets $ 1,090,976 $ 1,015,641Liabilities and Shareholders' EquityInterest-bearing liabilitiesNOW accounts $ 152,565 $ 473 0.62% $ 142,005 $ 538 0.76%Savings & money market 427,502 5,998 2.83% 352,219 5,156 2.94%Time deposits 157,773 2,700 3.45% 176,923 3,290 3.73%Total interest-bearing deposits 737,840 9,171 2.51% 671,147 8,984 2.68%FHLB advances and other borrowings 18,732 404 4.35% 28,538 793 5.57%Subordinated debentures 24,111 635 5.31% 25,731 737 5.75%Total interest-bearing liabilities 780,683 10,210 2.64% 725,416 10,514 2.91%Noninterest bearing deposits 217,556 205,301Other liabilities 12,585 13,694Shareholders' equity 80,152 71,230Total liabilities and shareholders' equity $ 1,090,976 $ 1,015,641Net interest income (tax equivalent) / interest $ 17,874 2.92% $ 14,874 2.49%rate spreadNet Interest Margin 3.54% 3.16%Cost of funds,including noninterest bearing deposits 2.06% 2.27%

Net interest income for the six months ended June 30, 2025, totaled $17.9 million compared to $14.9 million in the first six months of 2024, an increase of $3.0 million. The net interest margin was 3.54% for the first six months of 2025 compared to 3.16% for the same period in 2024. All of the yields on interest-earning assets, except fed funds sold increased. Yields on all interest-bearing liabilities have also declined in all categories. The total cost of funds, including noninterest-bearing deposits was 2.06% compared to 2.27% in 2024.

CONDENSED CONSOLIDATED BALANCE SHEETS – Unaudited As of Jun 30 Mar 31 Dec 31 Sep 30 Jun 30($ in thousands) 2025 2025 2024 2024 2024AssetsCash and cash equivalents:Cash and due from banks $ 4,066 $ 5,011 $ 4,604 $ 4,730 $ 5,669Interest-bearing deposits with banks 29,487 32,922 42,623 61,934 41,391Total cash and cash equivalents 33,553 37,933 47,227 66,664 47,060Investment securities:Investment securities available for sale 194,136 181,596 175,846 177,641 173,298Other investments 2,497 950 886 883 2,788Total investment securities 196,633 182,546 176,732 178,524 176,086Mortgage loans held for sale 14,944 22,424 20,974 19,929 25,776Loans receivable:Loans 784,749 784,469 753,738 739,219 739,433Less allowance for credit losses (8,535) (8,654) (8,434) (8,317) (8,498)Loans receivable, net 776,214 775,815 745,304 730,902 730,935Property and equipment, net 22,469 21,987 21,353 21,861 22,040Mortgage servicing rights 14,093 13,614 13,410 12,690 12,680Bank owned life insurance 18,815 18,710 18,608 18,501 18,396Deferred income taxes 6,510 6,938 7,709 6,292 7,612Other assets 18,972 17,422 15,787 16,117 17,810Total assets 1,102,203 1,097,389 1,067,104 1,071,480 1,058,395LiabilitiesDeposits $ 950,339 $ 978,667 $ 951,411 $ 951,948 $ 899,799Federal Home Loan Bank advances 32,500 – – – 40,000Federal funds and repurchase agreements 207 – – – 408Subordinated debentures 9,461 14,453 15,444 15,436 15,428Junior subordinated debentures 10,310 10,310 10,310 10,310 10,310Reserve for unfunded commitments 925 771 428 410 364Other liabilities 12,560 11,972 11,755 12,866 17,590Total liabilities 1,016,302 1,016,173 989,348 990,970 983,899Shareholders' equityPreferred stock – Series D non-cumulative, no par 1 1 1 1 1valueCommon Stock – $.01 par value; 20,000,000 shares 88 88 88 88 88authorizedTreasury stock, at cost (6,654) (6,458) (5,699) (5,285) (5,216)Nonvested restricted stock (2,536) (2,566) (2,340) (2,444) (2,463)Additional paid-in capital 56,708 56,408 55,789 55,763 55,645Retained earnings 44,937 41,284 39,671 38,753 36,928Accumulated other comprehensive loss (6,643) (7,541) (9,754) (6,366) (10,487)Total shareholders' equity 85,901 81,216 77,756 80,510 74,496Total liabilities and shareholders' equity $ 1,102,203 $ 1,097,389 $ 1,067,104 $ 1,071,480 $ 1,058,395

First Reliance cash and cash equivalents totaled $33.6 million at June 30, 2025, compared to $37.9 million at March 31, 2025. Cash with the Federal Reserve Bank totaled $29.3 million compared to $41.3 million at June 30, 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 $194.1 million and $181.6 million, at June 30, 2025 and March 31, 2025, respectively. The unrealized loss recorded on these securities totaled $8.8 million as of June 30, 2025, compared to $10.0 million at March 31, 2025, a decrease in the unrealized loss during the second quarter of $1.2 million (before taxes).

As of June 30, 2025, deposits decreased by $28.3 million, or 11.6% annualized. The deposit decline in all categories, except time deposits less than $250,000, was from the sale of two branches to Carter Bank in May 2025. See the table on page 10 for detail.

During the second quarter of 2025, the Company retired the remaining $5.0 million of subordinated debt that was issued in June 2020. This subordinated debt was scheduled to convert from a fixed interest rate of 5.875% to a variable interest rate of three-monthSOFR plus 5.51% on June 1, 2025.

The Company had $32.5 million in outstanding borrowings with the Federal Home Loan Bank (FHLB) of Atlanta at June 30, 2025, up from zero at March 31, 2025. The Company had remaining credit availability in excess of $286.1 million with theFHLB of Atlanta, subject to collateral requirements.

First Reliance also has access to approximately $19.9 million through the Federal Reserve Bank discount window with posted collateral. There are currently no borrowings against the Federal Reserve Bank discount window.

COMMON STOCK SUMMARY – Unaudited As of Jun 30 Mar 31 Dec 31 Sep 30 Jun 30(shares in thousands) 2025 2025 2024 2024 2024Voting common shares outstanding 8,787 8,786 8,764 8,820 8,819Treasury shares outstanding (830) (809) (731) (751) (743)Total common shares outstanding 7,957 7,977 8,033 8,069 8,076Book value per common share $ 10.80 $ 10.18 $ 9.68 $ 9.98 $ 9.22Tangible book value per common $ 10.71 $ 10.09 $ 9.59 $ 9.89 $ 9.13share – Non-GAAP(5)Stock price:High $ 10.00 $ 9.98 $ 10.24 $ 10.59 $ 8.30Low $ 9.00 $ 9.35 $ 9.16 $ 7.60 $ 7.60Period end $ 9.60 $ 9.45 $ 9.59 $ 10.14 $ 7.90ASSET QUALITY MEASURES – Unaudited As of Jun 30 Mar 31 Dec 31 Sep 30 Jun 30($ in thousands) 2025 2025 2024 2024 2024Nonperforming AssetsCommercialOwner occupied RE $ 39 $ 42 $ 44 $ 46 $ 49Non-owner occupied RE – 655 646 701 -Construction – – 66 – 62Commercial business 43 146 328 57 12ConsumerReal estate 39 40 42 44 46Home equity – – – – -Construction – – – – -Other 84 50 64 61 66Nonaccruing loan modifications – – – – -Total nonaccrual loans $ 205 $ 933 $ 1,190 $ 909 $ 235Other assets repossessed – – 11 15 75Total nonperforming assets $ 205 $ 933 $ 1,201 $ 924 $ 310Nonperforming assets as a percentage of:Total assets 0.02% 0.09% 0.11% 0.09% 0.03%Total loans receivable 0.03% 0.12% 0.16% 0.12% 0.04%Accruing loan modifications $ 797 $ 369 $ 400 $ 428 $ 460 Three Months Ended Jun 30 Mar 31 Dec 31 Sep 30 Jun 30($ in thousands) 2025 2025 2024 2024 2024Allowance for Credit LossesBalance, beginning of period $ 8,654 $ 8,434 $ 8,317 $ 8,498 $ 8,497Loans charged-off 110 163 24 69 102Recoveries of loans previously charged-off 57 19 18 17 14Net charge-offs 53 144 6 52 88Provision for credit losses (66) 364 123 (129) 89Balance, end of period $ 8,535 $ 8,654 $ 8,434 $ 8,317 $ 8,498Allowance for credit losses to gross loans 1.09% 1.10% 1.12% 1.13% 1.15%receivableAllowance for credit losses to nonaccrual loans 4163.41% 927.54% 708.74% 914.96% 3616.17%

Asset quality remained strong during the second quarter of 2025, with nonperforming assets decreasing to $205 thousand, which represents 0.02% of total assets. Two loans onnonaccrual were resolved during the second quarter. One was fully collected and the other (that was previously fully reserved) was charged off. The allowance for credit losses as a percentage of total loans receivable decreased to 1.09% at June 30, 2025, compared to 1.10% at March 31, 2025, and 1.12% at December 31, 2024. The allowance for credit losses decreased by a release of provision for credit losses of $66 thousand and by net charge-offs of $53 thousand, during the second quarter of 2025. In the second quarter of 2024, the Company experienced net charge-offs of $88 thousand and increased theACL with a provision for credit losses of $89 thousand. TheACL was 1.15% of total loans at June 30, 2024.

Footnotes to table located at the end of this release.

LOAN COMPOSITION – Unaudited As of Jun 30 Mar 31 Dec 31 Sep 30 Jun 30($ in thousands) 2025 2025 2024 2024 2024Commercial real estate $ 483,278 $ 482,201 $ 463,301 $ 456,775 $ 450,936Consumer real estate 223,310 216,964 204,303 193,362 188,759Commercial and industrial 61,255 65,573 65,980 66,561 76,149Consumer and other 16,906 19,731 20,154 22,521 23,589Total loans, net of deferred fees 784,749 784,469 753,738 739,219 739,433Less allowance for credit losses 8,535 8,654 8,434 8,317 8,498Total loans, net $ 776,214 $ 775,815 $ 745,304 $ 730,902 $ 730,935DEPOSIT COMPOSITION – Unaudited As of Jun 30 Mar 31 Dec 31 Sep 30 Jun 30($ in thousands) 2025 2025 2024 2024 2024Noninterest-bearing $ 219,352 $ 224,031 $ 227,471 $ 219,279 $ 220,330Interest-bearing: -DDA and NOW accounts 156,062 162,129 140,116 150,312 132,186Money market accounts 379,078 393,736 381,602 362,834 325,769Savings 38,995 39,719 40,627 41,184 42,479Time, less than $250,000 125,607 122,613 120,397 133,940 128,869Time, $250,000 and over 31,245 36,439 41,198 44,399 50,166Total deposits $ 950,339 $ 978,667 $ 951,411 $ 951,948 $ 899,799Footnotes to tables:(1) Total revenue is the sum of net interest income andnoninterest income.(2) Annualized for the respective period.(3) Noninterest expense divided by the sum of net interest income and noninterest income.(4) Includesnoninterest-bearing and interest-bearing DDA and NOW accounts.(5) The tangible book value per share is calculated as total shareholders' 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 $1.102 billion. The Company employs approximately 170 professionals and has locations throughout South 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 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 19 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, theDodd-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:Robert HaileSEVP & Chief Financial Officer(843) 656-5000rhaile@firstreliance.com

https://c212.net/c/img/favicon.png?sn=CL37489&sd=2025-07-25

View original content to download multimedia:https://www.prnewswire.com/news-releases/first-reliance-bancshares-reports-second-quarter-2025-results-302513691.html

SOURCE First Reliance Bancshares, Inc.

https://rt.newswire.ca/rt.gif?NewsItemId=CL37489&Transmission_Id=202507250900PR_NEWS_USPR_____CL37489&DateId=20250725