First Reliance Bancshares Reports Fourth Quarter 2021 Results

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    total assets	0.10%	0.15%	0.17%	0.17%	0.21%
Allowance for loan losses as a percentage of    total loans receivable	1.20%	1.23%	1.20%	1.26%	1.29%

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    losses	6,526	6,164	6,112	5,601	5,348		24,402	21,343
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,    commissions, and fees	543	532	509	454	427		2,038	1,597
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   value	1	1	1	1	1
Common Stock - $.01 par value; 20,000,000 shares   authorized	88	88	88	88	82
Non-Voting Common Stock, $.01 par value;   430,000 shares authorized	-	-	-	-	4
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.
(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 $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 Haile
SEVP & Chief Financial Officer
[phone]
[e-mail]

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SOURCE First Reliance Bancshares