First Reliance Bancshares Reports Third Quarter 2026 Results

Nine-month earnings increased, but quarterly fee income fell and nonperforming assets rose primarily because of one loan.

Rhea-AI Summary

First Reliance Bancshares (FSRL) reported third-quarter 2026 net income of $2.738 million, with diluted earnings per share unchanged year over year. Diluted EPS was $0.33, versus $0.34 in the second quarter. Nine-month net income rose to $8.981 million from $7.980 million a year earlier.

Quarterly net interest income increased to $9.883 million from $9.453 million a year earlier. Net interest margin was 3.73%, versus 3.74% sequentially and 3.66% a year earlier. Noninterest income fell while noninterest expense increased year over year. Loans declined to $812.3 million from June, while deposits increased to $922.4 million. Nonperforming assets rose to $6.6 million from $626 thousand.

The Colony Bank merger has regulatory and shareholder approvals, with closing scheduled for November 1, 2026. Systems conversion is scheduled for June 2027.

16 points · 0 major

MixediHow this balance works

How this balance works

Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.

It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.

Rhea-AI Sentiment measures something else, the tone of the wording.

How the balance worksHow Sentiment works

0 major · 14 points

Hollow bars mark forward-looking points. How the balance works

Positive

• Moderate pointNine-month GAAP net income increased to $8.981 million from $7.980 million; diluted EPS rose to $1.10 from $0.96.
• Moderate pointThird-quarter net interest income rose to $9.883 million from $9.453 million a year earlier and $9.871 million sequentially.
• Moderate pointThird-quarter operating earnings, excluding specified items, rose to $2.927 million from $2.714 million year over year.
• Moderate pointBook value per share increased 8.6% to $12.40 from September 30, 2025.
• Moderate pointTangible book value per share, excluding intangible assets, increased 8.7% to $12.31 year over year.
• Moderate pointYear-to-date loan growth totaled $32.4 million, or 5.5% annualized, through September 30, 2026.
• Moderate pointTotal risk-based capital ratio increased to 14.75% from 14.26% at June 30, 2026.
• Moderate pointCommon equity tier 1 capital ratio increased to 13.66% from 13.16% at June 30, 2026.
• Moderate pointTier 1 leverage ratio increased to 10.87% from 10.53% at June 30, 2026.
• Moderate point. Forward-looking: it has not happened yet and may not happen.Colony Bank merger received regulatory and both companies' shareholder approvals; closing is scheduled for November 1, 2026.

6 minor points

• Minor pointNine-month net interest income increased to $29.277 million from $27.327 million a year earlier.
• Minor pointNine-month operating earnings, excluding specified items, increased to $9.249 million from $6.627 million year over year.
• Minor pointDeposits increased $2.1 million to $922.4 million from June 30, 2026.
• Minor pointThird-quarter credit-loss provision was a $341 thousand reversal, versus a $90 thousand expense a year earlier.
• Minor pointNet loan recoveries continued for the fourth consecutive quarter in third-quarter 2026.
• Minor pointUnfunded commitment reserve decreased $123 thousand to $506 thousand as commitments declined during the quarter.

Negative

• Moderate pointNonperforming assets increased to $6.6 million, or 0.59% of assets, from $626 thousand at June 30, 2026.
• Moderate pointLoans held for investment declined $8.4 million, or 4.1% annualized, from June 30, 2026.
• Moderate pointThird-quarter revenue decreased to $12.154 million from $12.238 million a year earlier and $12.803 million sequentially.
• Moderate pointThird-quarter noninterest income fell to $2.271 million from $2.785 million a year earlier.
• Moderate pointThird-quarter noninterest expense increased to $9.030 million from $8.519 million a year earlier.
• Moderate pointThird-quarter efficiency ratio worsened to 74.30% from 69.61% a year earlier and 71.44% sequentially.
• Moderate pointThird-quarter return on average equity fell to 11.08% from 12.55% a year earlier.

7 minor points

• Minor pointThird-quarter GAAP net income declined to $2.738 million from $2.807 million sequentially; diluted EPS fell to $0.33.
• Minor pointThird-quarter net interest margin was 3.73%, down from 3.74% sequentially but above 3.66% a year earlier.
• Minor pointNine-month noninterest income declined to $8.705 million from $9.989 million a year earlier.
• Minor pointNine-month noninterest expense increased to $26.622 million from $25.939 million a year earlier.
• Minor pointThird-quarter merger-related expenses totaled $240 thousand, versus $354 thousand in the second quarter.
• Minor pointThird-quarter return on average assets decreased to 0.98% from 0.99% a year earlier.
• Minor pointNine-month return on average equity declined to 12.37% from 12.93% a year earlier.

AI-generated analysis. How Rhea-AI works. Not financial advice.

See more from StockTitan in Google Search and AI answers. Adds StockTitan as a preferred source · opens Google

Add on Google Not now

FLORENCE, S.C., Oct. 28, 2026 /PRNewswire/ -- First Reliance Bancshares, Inc. (OTCQX:FSRL), the holding company for First Reliance Bank (collectively, "First Reliance" or the "Company"), today announced its financial results for the third quarter of 2026.

Third Quarter 2026 Highlights

• Net income for the third quarter of 2026 was $2.7 million, or $0.33 per diluted share, compared to $2.7 million, or $0.33 per diluted share, for the third quarter of 2025.  For the nine-months ended September 30, 2026, net income totaled $9.0 million, or $1.10 per diluted share, compared to $8.0 million, or $0.96 per diluted share for the same period in 2025.  Operating earnings (Non-GAAP) were $2.9 million, or $0.36 per diluted share, for the third quarter of 2026, compared to $2.7 million, or $0.33 per diluted share, for the third quarter of 2025.  For the nine-months ended September 30, 2026, operating earnings (Non-GAAP) totaled $9.2 million or $1.13 per diluted share, compared to $6.6 million, or $0.79 per diluted share, for the nine-months ended September 30, 2025.
• Book value per share rose $0.98, or 8.6%, to $12.40 at September 30, 2026, from $11.42 at September 30, 2025.  Tangible book value per share (Non-GAAP) increased $0.98, or 8.7%, to $12.31 from $11.33 over the same period. 
• Net interest income totaled $9.9 million for the third quarter of 2026, up $430 thousand, or 4.6%, from the same quarter in 2025 and up $12 thousand, or 0.12%, from the second quarter of 2026.
• Net interest margin decreased during the third quarter of 2026 to 3.73%, compared to 3.74% in the second quarter of 2026, and increased 7 basis points compared to the third quarter of 2025.
• Total loans held for investment decreased $8.4 million, or 4.1% annualized, to $812.3 million at September 30, 2026, from $820.7 million at June 30, 2026.  Total loan growth for 2026 totaled $32.4 million, or 5.5% annualized.
• Unfunded commitments decreased $7.7 million during the quarter, primarily due to construction loan balances declining.  As a result, the unfunded commitment reserve decreased $123 thousand to $506 thousand from $629 thousand at June 30, 2026.
• Total deposits were $922.4 million at September 30, 2026, an increase of $2.1 million, or 0.90% annualized, from $920.3 million at June 30, 2026. 
• Nonperforming assets increased by $5.9 million to $6.6 million or 0.59% of total assets, at September 30, 2026, compared with $626 thousand, or 0.06% of total assets, at June 30, 2026.  The increase was primarily due to one loan totaling $5.5 million.  This loan was sufficiently collateralized and there was no specific allowance for credit loss recorded as of September 30, 2026.
• In June 2026, the Company announced a partnership with Colony Bank (CBAN), headquartered in Fitzgerald, Georgia.  Bank regulatory approvals have been received, and shareholders of both companies have approved the merger.  The remaining customary closing requirements should be completed and closing is scheduled for November 1, 2026.  Systems conversion is scheduled for June 2027.  Based on each company's total assets at September 30, 2026, the combined company will have nearly $5.0 billion in total assets.

Rick Saunders, Chief Executive Officer, stated, "Overall the third quarter of 2026 was steady from an earnings standpoint. The margin compressed slightly compared to the second quarter and tangible book value was affected by the increase in the unrealized loss of the securities portfolio as interest rates have risen during the quarter. Net interest margin declined by one basis point compared to the second quarter of 2026. The bank experienced net recoveries in the third quarter of 2026, the fourth quarter in a row.  We have received regulatory approval and shareholder approval for our announced partnership with Colony Bank and look forward to joining that team with closing anticipated on November 1, 2026."

Financial Summary
	Three Months Ended						Nine Months Ended
	Sep 30	Jun 30	Mar 31	Dec 31	Sep 30		Sep 30		Sep 30
($ in thousands, except per share data)	2026	2026	2026	2025	2025		2026		2025
Earnings:
Net income available to common shareholders	$         2,738	$     2,807	$     3,436	$      2,926	$     2,714		$   8,981		$     7,980
Operating earnings (Non-GAAP)	2,927	3,089	3,233	2,852	2,714		9,249		6,627
Earnings per common share, diluted (GAAP)	0.33	0.34	0.41	0.36	0.33		1.10		0.96
Operating earnings per common share, diluted (Non-GAAP)	0.36	0.38	0.39	0.35	0.33		1.13		0.79
Total revenue(1)	12,154	12,803	13,025	12,353	12,238		37,982		37,316
Net interest margin	3.73 %	3.74 %	3.77 %	3.71 %	3.66 %		3.75 %		3.58 %
Return on average assets(2)	0.98 %	1.00 %	1.25 %	1.06 %	0.99 %		1.07 %		0.97 %
Return on average assets - Operating Non-GAAP(2)	1.05 %	1.10 %	1.18 %	1.03 %	0.99 %		1.11 %		0.81 %
Return on average equity(2)	11.08 %	11.58 %	14.53 %	12.83 %	12.55 %		12.37 %		12.93 %
Return on average equity - Operating Non-GAAP(2)	11.85 %	12.75 %	13.67 %	12.51 %	12.55 %		12.74 %		10.74 %
Efficiency ratio(3)	74.30 %	71.44 %	64.84 %	71.08 %	69.61 %		70.09 %		69.51 %
Adjusted efficiency ratio - Non-GAAP(3)	72.33 %	68.67 %	66.16 %	71.59 %	69.61 %		69.00 %		72.82 %

 

	As of
	Sep 30	Jun 30	Mar 31	Dec 31	Sep 30
($ in thousands)	2026	2026	2026	2025	2025
Balance Sheet:
Total assets	$           1,113,786	$     1,126,912	$     1,118,388	$     1,093,359	$     1,097,846
Total loans receivable	812,347	820,741	801,243	779,935	779,997
Total deposits	922,379	920,329	929,045	948,120	959,300
Total transaction deposits(4) to total deposits	37.96 %	38.29 %	36.83 %	36.59 %	40.68 %
Loans to deposits	88.07 %	89.18 %	86.24 %	82.26 %	81.31 %
Bank Capital Ratios:
Total risk-based capital ratio	14.75 %	14.26 %	14.15 %	13.82 %	13.58 %
Tier 1 risk-based capital ratio	13.66 %	13.16 %	13.04 %	12.72 %	12.48 %
Tier 1 leverage ratio	10.87 %	10.53 %	10.53 %	10.16 %	9.94 %
Common equity tier 1 capital ratio	13.66 %	13.16 %	13.04 %	12.72 %	12.48 %
Asset Quality Ratios:
Nonperforming assets as a percentage of    total assets	0.59 %	0.06 %	0.19 %	0.23 %	0.03 %
Allowance for credit losses as a percentage of total loans receivable	1.12 %	1.14 %	1.14 %	1.13 %	1.12 %
Annualized net charge-offs as a percentage of average total loan receivables	(0.00 %)	(0.00 %)	(0.01 %)	(0.03 %)	0.02 %

 

CONDENSED CONSOLIDATED INCOME STATEMENTS – Unaudited
	Three Months Ended					Nine Months Ended
	Sep 30	Jun 30	Mar 31	Dec 31	Sep 30	Sep 30
($ in thousands, except per share data)	2026	2026	2026	2025	2025	2026	2025
Interest income
Loans	$    12,297	$    12,252	$    11,534	$    11,518	$    11,842	$    36,083	$       34,792
Investment securities	2,312	2,292	2,413	2,302	2,300	7,017	6,611
Other interest income	282	307	189	406	323	778	1,146
Total interest income	14,891	14,851	14,136	14,226	14,465	43,878	42,549
Interest expense
Deposits	4,081	4,065	3,930	4,215	4,536	12,076	13,707
Other interest expense	927	915	683	393	476	2,525	1,515
Total interest expense	5,008	4,980	4,613	4,608	5,012	14,601	15,222
Net interest income	9,883	9,871	9,523	9,618	9,453	29,277	27,327
Provision for credit losses	(341)	123	175	76	90	(43)	885
Net interest income after provision for credit losses	10,224	9,748	9,348	9,542	9,363	29,320	26,442
Noninterest income
Mortgage banking income	1,008	1,764	2,103	1,405	1,577	4,875	4,514
Service fees on deposit accounts	388	361	366	405	412	1,115	1,030
Debit card and other service charges,    commissions, and fees	531	528	506	527	531	1,565	1,603
Income from bank owned life insurance	109	107	104	107	108	320	314
Loss on sale of securities, net	-	-	(6)	(294)	-	(6)	(182)
Gain on sale of branches	-	-	-	-	-	-	2,313
Gain on sale of mortgage servicing right (MSR)	-	-	266	-	-	266	-
Gain on early extinguishment of debt	-	-	-	-	-	-	140
Gain (loss) on disposal /write down of fixed assets	-	-	-	382	-	-	(200)
Other income	235	172	163	203	157	570	457
Total noninterest income	2,271	2,932	3,502	2,735	2,785	8,705	9,989
Noninterest expense
Compensation and benefits	5,542	5,726	5,447	5,499	5,431	16,715	16,286
Occupancy and equipment	910	724	796	725	736	2,430	2,297
Data processing, technology, and communications	1,217	1,315	1,218	1,216	1,061	3,750	3,360
Professional fees	171	144	77	85	195	392	596
Marketing	70	65	96	71	155	231	453
Other	1,120	1,172	812	1,185	941	3,104	2,947
Total noninterest expense	9,030	9,146	8,446	8,781	8,519	26,622	25,939
Income before provision for income taxes	3,465	3,534	4,404	3,496	3,629	11,403	10,492
Income tax expense	727	727	968	570	915	2,422	2,512
Net income available to common shareholders	$      2,738	$      2,807	$      3,436	$      2,926	$      2,714	$      8,981	$         7,980
(Subtract gain) / addback loss on fixed assets, net of tax	-	-	-	(320)	-	-	151
Subtract gain on sale of branches, net of tax	-	-	-	-	-	-	(1,746)
Subtract gain on sale of MSR, net of tax	-	-	(208)			(208)	-
Subtract gain on early extinguishment of debt, net of tax	-	-	-	-	-	-	(111)
Addback expenses related to merger/branch sale, net of tax	189	282	-	-	-	471	208
Addback securities losses, net of tax	-	-	5	246	-	5	145
Operating net income (non-GAAP)	$      2,927	$      3,089	$      3,233	$      2,852	$      2,714	$      9,249	$         6,627
Weighted average common shares - basic	7,790	7,784	7,866	7,745	7,902	7,759	7,887
Weighted average common shares - diluted	8,232	8,210	8,302	8,218	8,349	8,198	8,344
Basic net income per common share*	$        0.35	$        0.36	$        0.44	$        0.38	$        0.34	$        1.16	$           1.01
Diluted net income per common share*	$        0.33	$        0.34	$        0.41	$        0.36	$        0.33	$        1.10	$           0.96
Operating basic net income per common share (nonGAAP)*	$        0.38	$        0.40	$        0.41	$        0.37	$        0.34	$        1.19	$           0.84
Operating diluted net income per common share (nonGAAP)*	$        0.36	$        0.38	$        0.39	$        0.35	$        0.33	$        1.13	$           0.79

*Note that the sum of the quarters may not equal the YTD result due to rounding of earnings per share each quarter, given the weighted average shares outstanding basic and/or diluted.

Footnotes to table located at the end of this release.

Net income for the three months ended September 30, 2026, was $2.7 million, or $0.33 per diluted common share, compared to $2.7 million, or $0.33 per diluted common share, for the three months ended September 30, 2025.  Operating net income (Non-GAAP), for the three months ended September 30, 2026, was $2.9 million, or $0.36 per diluted common share, compared to $2.7 million, or $0.33 per diluted common share for the three months ended September 30, 2025.  Net income for the nine months ended September 30, 2026, totaled $9.0 million, or $1.10 per diluted common share, compared to $8.0 million, or $0.96 per diluted common share, at September 30, 2025.  On an operating basis, diluted EPS (Non-GAAP) was $1.13 per diluted common share, for the nine months ended September 30, 2026, which includes adding back the impact of securities losses, net of tax, subtracting the gain on the sale of mortgage servicing rights, net of tax, and adding back the impact of merger related expenses, net of tax.  The items affecting the nine months ended September 30, 2025, net of tax, include the following:  the addback of loss on fixed asset write downs, adding back the impact of expenses related to the branch sales, adding back securities losses, offset by subtracting the gain recognized on the sale of branches and the gain from the early extinguishment of debt, which resulted in $0.79 per diluted common share.

Noninterest income, for the three months ended September 30, 2026, was $2.3 million, a decrease of $514 thousand from $2.8 million for the same period in 2025.  Mortgage banking income totaled $1.0 million in the third quarter of 2026 compared to $1.6 million in the third quarter of 2025.

For the nine months ended September 30, 2026, noninterest income decreased $1.3 million compared with the same period in 2025. The decline was due to the $2.3 million gain on the sale of branches and the $140 thousand gain on early debt extinguishment recognized in 2025.  These two items were partially offset by a $361 thousand increase in mortgage banking income, a $266 thousand gain on the sale of mortgage servicing rights, a $113 thousand increase in other income, no fixed-asset write-down in 2026, and a $176 thousand reduction in losses on securities sold.

Noninterest expense was $9.0 million for the three months ended September 30, 2026, up $511 thousand from $8.5 million for the same period in 2025.  The increase was driven by $174 thousand rise in occupancy and equipment costs, $156 thousand in data processing, technology and communications, and $179 thousand in other expense, primarily related to merger expenses. 

Noninterest expense was $26.6 million for the nine months ended September 30, 2026, up $683 thousand from the prior-year period. The increase was primarily driven by a $429 thousand rise in compensation and benefits related to incentives and stock compensation expense.  Data processing, technology, and communication expenses increased $390 thousand. These increases were partially offset by a $222 thousand decrease in marketing expenses.

Operating adjustments – 3Q 2026 & 2Q 2026

During the second quarter of 2026, the Company announced the partnership with Colony Bank (CBAN) headquartered in Fitzgerald, Georgia.  The Company incurred $240 thousand, in the third quarter of 2026, and $354 thousand, in the second quarter of 2026, of merger-related expenses.

Operating adjustments – 1Q 2026

During the first quarter of 2026, the Company sold mortgage servicing rights (MSRs) related to approximately $565.9 million underlying mortgage loans for an initial gain of $266 thousand, net of direct expenses.  The Company also sold securities at a net loss of $6 thousand.

Operating adjustments – 4Q 2025

During the fourth quarter of 2025, the Company sold property in Florence which resulted in a gain of $382 thousand and sold five securities resulting in a net loss of $294 thousand.

There were no operating adjustments in 3Q 2025.

NET INTEREST INCOME AND MARGIN – Unaudited - QTD
	For the  Three Months Ended
	September 30, 2026				June 30, 2026				September 30, 2025
	Average	Income/	Yield/		Average	Income/	Yield/		Average	Income/	Yield/
($ in thousands)	Balance	Expense	Rate		Balance	Expense	Rate		Balance	Expense	Rate
Assets
Interest-earning assets
Federal funds sold and interest- bearing deposits	$          29,431	$      219	2.95 %		$          31,859	$      261	3.28 %		$          35,237	$       296	3.33 %
Investment securities	185,452	2,313	4.95 %		194,063	2,292	4.74 %		193,519	2,300	4.72 %
Nonmarketable equity securities	4,139	63	6.05 %		4,147	46	4.49 %		1,795	26	5.84 %
Loans held for sale	10,891	168	6.13 %		16,354	318	7.80 %		12,381	301	9.65 %
Loans	820,547	12,128	5.86 %		811,650	11,934	5.90 %		780,426	11,542	5.87 %
Total interest-earning assets	1,050,460	14,891	5.62 %		1,058,073	14,851	5.63 %		1,023,358	14,465	5.61 %
Allowance for credit losses	(9,367)				(9,181)				(8,509)
Noninterest-earning assets	78,153				78,237				80,739
Total assets	$     1,119,246				$     1,127,129				$     1,095,588
Liabilities and Shareholders' Equity
Interest-bearing liabilities
NOW accounts	$        105,532	$      168	0.63 %		$        101,523	$      163	0.64 %		$        123,107	$       230	0.74 %
Savings & money market	401,950	2,544	2.51 %		429,446	2,679	2.50 %		410,051	2,893	2.80 %
Time deposits	165,173	1,370	3.29 %		152,404	1,223	3.22 %		168,116	1,413	3.33 %
Total interest-bearing deposits	672,655	4,082	2.41 %		683,373	4,065	2.39 %		701,274	4,536	2.57 %
FHLB advances and other borrowings	69,511	688	3.93 %		69,780	673	3.87 %		20,652	217	4.17 %
Subordinated debentures	19,806	238	4.77 %		19,799	242	4.90 %		19,775	259	5.19 %
Total interest-bearing liabilities	761,972	5,008	2.61 %		772,952	4,980	2.58 %		741,701	5,012	2.68 %
Noninterest bearing deposits	244,211				244,109				253,702
Other liabilities	14,231				13,139				13,666
Shareholders' equity	98,832				96,929				86,519
Total liabilities and shareholders' equity	$     1,119,246				$     1,127,129				$     1,095,588
Net interest income (tax equivalent) / interest   rate spread		$   9,883	3.01 %			$   9,871	3.05 %			$    9,453	2.93 %
Net Interest Margin			3.73 %				3.74 %				3.66 %
Cost of funds, including noninterest-bearing deposits			1.97 %				1.96 %				2.00 %

Net interest income for the three months ended September 30, 2026, was $9.9 million, compared with $9.5 million for the same period in 2025.  The increase reflected a $426 thousand rise in interest income and a $4 thousand decrease in interest expense.  Net interest margin improved to 3.73% from 3.66% a year earlier.  Loans and securities generated the largest increases in income compared with the prior year, while lower yields on all interest-bearing liabilities also contributed to the margin improvement.  In addition, the total cost of funds, including noninterest-bearing deposits, decreased to 1.97% in the third quarter of 2026, compared to 2.00% in the third quarter of 2025. 

NET INTEREST INCOME AND MARGIN – Unaudited - YTD
	For the  Nine Months Ended
	September 30, 2026				September 30, 2025
	Average	Income/	Yield/		Average	Income/	Yield/
($ in thousands)	Balance	Expense	Rate		Balance	Expense	Rate
Assets
Interest-earning assets
Federal funds sold and interest-bearing deposits	$          28,415	$         645	3.04 %		$          37,905	$          1,066	3.76 %
Investment securities	192,393	7,017	4.88 %		186,815	6,611	4.73 %
Nonmarketable equity securities	3,764	133	4.73 %		1,717	80	6.24 %
Loans held for sale	12,573	650	6.91 %		16,065	1,018	8.47 %
Loans	807,064	35,433	5.87 %		777,837	33,774	5.81 %
Total interest-earning assets	1,044,209	43,878	5.62 %		1,020,339	42,549	5.58 %
Allowance for credit losses	(9,147)				(8,564)
Noninterest-earning assets	79,598				80,756
Total assets	$     1,114,660				$     1,092,531
Liabilities and Shareholders' Equity
Interest-bearing liabilities
NOW accounts	$        100,677	$         486	0.64 %		$        142,638	$             702	0.66 %
Savings & money market	420,262	7,835	2.49 %		421,621	8,892	2.82 %
Time deposits	157,149	3,755	3.19 %		161,259	4,113	3.41 %
Total interest-bearing deposits	678,088	12,076	2.38 %		725,518	13,707	2.53 %
FHLB advances and other borrowings	61,956	1,801	3.89 %		19,407	622	4.28 %
Subordinated debentures	19,798	724	4.89 %		22,649	893	5.27 %
Total interest-bearing liabilities	759,842	14,601	2.57 %		767,574	15,222	2.65 %
Noninterest bearing deposits	244,814				229,737
Other liabilities	13,197				12,922
Shareholders' equity	96,807				82,298
Total liabilities and shareholders' equity	$     1,114,660				$     1,092,531
Net interest income (tax equivalent) / interest   rate spread		$    29,277	3.05 %			$        27,327	2.93 %
Net Interest Margin			3.75 %				3.58 %
Cost of funds,including noninterest bearing deposits			1.94 %				2.04 %

Net interest income was $29.3 million for the nine months ended September 30, 2026, an increase of $2.0 million from $27.3 million for the same period in 2025.  Net interest margin rose year over year to 3.75% from 3.58%.  Yields improved on investment securities and loans, while yields declined across all interest-bearing liability categories.  The total cost of funds, including noninterest-bearing deposits, decreased to 1.94% from 2.04% in 2025.

CONDENSED CONSOLIDATED BALANCE SHEETS – Unaudited
	As of
	Sep 30	Jun 30	Mar 31	Dec 31	Sep 30
($ in thousands)	2026	2026	2026	2025	2025
Assets
Cash and cash equivalents:
Cash and due from banks	$                  2,786	$            4,036	$            4,236	$            4,031	$            5,072
Interest-bearing deposits with banks	29,094	22,991	26,477	28,101	26,695
Total cash and cash equivalents	31,880	27,027	30,713	32,132	31,767
Investment securities:
Investment securities available for sale	187,897	188,825	200,886	196,043	199,674
Other investments	3,687	4,400	3,682	1,764	1,527
Total investment securities	191,584	193,225	204,568	197,807	201,201
Mortgage loans held for sale	10,428	18,135	15,636	12,280	13,336
Loans receivable:
Loans	812,347	820,741	801,243	779,935	779,997
Less allowance for credit losses	(9,122)	(9,334)	(9,105)	(8,827)	(8,741)
Loans receivable, net	803,225	811,407	792,138	771,108	771,256
Property and equipment, net	24,085	24,321	24,454	24,348	23,313
Mortgage servicing rights	9,849	9,481	8,728	14,656	14,421
Bank owned life insurance	19,349	19,240	19,134	19,029	18,922
Deferred income taxes	8,273	6,944	6,438	6,117	6,221
Other assets	15,113	17,132	16,579	15,882	17,409
Total assets	$           1,113,786	$     1,126,912	1,118,388	1,093,359	1,097,846
Liabilities
Deposits	$              922,379	$        920,329	$        929,045	$        948,120	$        959,300
Federal Home Loan Bank advances	60,000	75,000	60,000	20,000	15,000
Federal funds and repurchase agreements	112	-	-	-	-
Subordinated debentures	9,500	9,492	9,484	9,476	9,469
Junior subordinated debentures	10,310	10,310	10,310	10,310	10,310
Reserve for unfunded commitments	506	629	728	822	767
Other liabilities	13,106	12,736	12,937	11,565	13,498
Total liabilities	1,015,913	1,028,496	1,022,504	1,000,293	1,008,344
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	89	89	89	88	88
Treasury stock, at cost	(8,802)	(8,635)	(8,536)	(8,085)	(7,883)
Nonvested restricted stock	(847)	(1,241)	(1,592)	(1,949)	(2,359)
Additional paid-in capital	56,973	57,041	57,026	56,869	56,931
Retained earnings	59,558	56,821	54,014	50,578	47,652
Accumulated other comprehensive loss	(9,099)	(5,660)	(5,118)	(4,436)	(4,928)
Total shareholders' equity	97,873	98,416	95,884	93,066	89,502
Total liabilities and shareholders' equity	$           1,113,786	$     1,126,912	$     1,118,388	$     1,093,359	$     1,097,846

Cash and cash equivalents totaled $31.9 million at September 30, 2026, compared with $27.0 million at June 30, 2026.  Cash held at the Federal Reserve Bank was $28.3 million, compared with $22.4 million at June 30, 2026.

First Reliance had no held-to-maturity (HTM) securities for any reported period.  All debt securities were classified as available-for-sale (AFS), with balances of $187.9 million at September 30, 2026, and $199.7 million at September 30, 2025.  The unrealized loss on these securities was $12.1 million at September 30, 2026, compared with $7.5 million at June 30, 2026, an increase of $4.6 million before taxes during the third quarter of 2026.

Deposits increased $2.1 million, or 0.90% annualized, as of September 30, 2026, primarily due to higher demand deposit accounts, money market account balances and time deposits. The increase was partially offset by decreases in noninterest-bearing deposits and savings accounts.  See the table on page 10 for details.

The Company had $60.0 million in outstanding borrowings with the Federal Home Loan Bank (FHLB) of Atlanta at September 30, 2026, down from $75.0 million at June 30, 2026.  The Company had remaining credit availability in excess of $262.0 million with the FHLB of Atlanta, subject to collateral requirements.

First Reliance also has access to approximately $16.5 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
	Sep 30	Jun 30	Mar 31	Dec 31	Sep 30
(shares in thousands)	2026	2026	2026	2025	2025
Voting common shares outstanding	8,913	8,905	8,896	8,804	8,794
Treasury shares outstanding	(1,019)	(1,010)	(1,003)	(972)	(954)
Total common shares outstanding	7,894	7,895	7,893	7,832	7,840
Book value per common share	$                  12.40	$                  12.47	$                  12.15	$                  11.88	$                  11.42
Tangible book value per common share - Non-GAAP(5)	$                  12.31	$                  12.38	$                  12.06	$                  11.79	$                  11.33
Stock price:
High	$                  20.12	$                  18.75	$                  16.03	$                  13.70	$                  10.21
Low	$                  18.20	$                  13.03	$                  12.00	$                  10.00	$                    9.36
Period end	$                  19.13	$                  18.43	$                  13.90	$                  12.26	$                  10.10

 

ASSET QUALITY MEASURES – Unaudited
	As of
	Sep 30	Jun 30	Mar 31	Dec 31	Sep 30
($ in thousands)	2026	2026	2026	2025	2025
Nonperforming Assets
Commercial
Owner occupied RE	$       6,338	$          332	$    1,357	$       1,573	$            36
Non-owner occupied RE	-	-	-	-	-
Construction	-	-	-	-	-
Commercial business	12	24	27	31	38
Consumer
Real estate	165	208	69	36	226
Home equity	-	-	-	-	-
Construction	-	-	-	-	-
Other	47	62	65	71	69
Nonaccruing loan modifications	-	-	-	-	-
Total nonaccrual loans	$       6,562	$          626	$    1,518	$       1,711	$          369
Loans past due 90 days or more & accruing interest	-	-	592	744	-
Other assets repossessed	-	-	-	6	-
Total nonperforming assets	$       6,562	$          626	$    2,110	$       2,461	$          369
Nonperforming assets as a percentage of:
Total assets	0.59 %	0.06 %	0.19 %	0.23 %	0.03 %
Total loans receivable	0.81 %	0.08 %	0.26 %	0.32 %	0.05 %
Accruing loan modifications	$          467	$          526	$       555	$          668	$          683
	Three Months Ended
	Sep 30	Jun 30	Mar 31	Dec 31	Sep 30
($ in thousands)	2026	2026	2026	2025	2025
Allowance for Credit Losses
Balance, beginning of period	$       9,334	$       9,105	$    8,827	$       8,741	$       8,535
Loans charged-off	44	10	8	15	48
Recoveries of loans previously charged-off	50	17	17	80	6
Net charge-offs (recoveries)	(6)	(7)	(9)	(65)	42
Provision (release) for credit losses	(218)	222	269	21	248
Balance, end of period	$       9,122	$       9,334	$    9,105	$       8,827	$       8,741
Allowance for credit losses to gross loans receivable	1.12 %	1.14 %	1.14 %	1.13 %	1.12 %
Allowance for credit losses to nonaccrual loans	139.01 %	1491.67 %	599.78 %	515.87 %	2368.83 %

Nonperforming assets increased in the third quarter of 2026 to $6.6 million or 0.59% of total assets from $626 thousand, or 0.06% of total assets, at June 30, 2026.  This increase was primarily the result of one owner-occupied loan totaling $5.5 million that has moved to nonaccrual in the third quarter of 2026.  This loan was supported by sufficient collateral and no allowance for credit losses recorded in the third quarter of 2026.  During the third quarter of 2026, the allowance for credit losses decreased $212 thousand, reflecting a $218 thousand release from the provision for credit losses and $6 thousand in net recoveries.  In the third quarter of 2025, the Company recorded $42 thousand in net charge-offs and increased the allowance for credit losses through a $248 thousand provision for credit losses.  The allowance was 1.12% of total loans at September 30, 2025.

Footnotes to table located at the end of this release.

LOAN COMPOSITION – Unaudited
	As of
	Sep 30	Jun 30	Mar 31	Dec 31	Sep 30
($ in thousands)	2026	2026	2026	2025	2025
Commercial real estate	$             471,395	$             480,996	$             475,483	$             466,293	$             471,002
Consumer real estate	252,762	251,864	238,369	230,379	220,767
Commercial and industrial	79,622	78,375	76,142	71,212	71,802
Consumer and other	8,568	9,506	11,249	12,051	16,426
Total loans, net of deferred fees	812,347	820,741	801,243	779,935	779,997
Less allowance for credit losses	9,122	9,334	9,105	8,827	8,741
Total loans, net	$             803,225	$             811,407	$             792,138	$             771,108	$             771,256

 

DEPOSIT COMPOSITION – Unaudited
	As of
	Sep 30	Jun 30	Mar 31	Dec 31	Sep 30
($ in thousands)	2026	2026	2026	2025	2025
Noninterest-bearing	$         236,426	$         249,674	$         247,577	$         254,618	$         292,107
Interest-bearing:
DDA and NOW accounts	113,738	102,681	94,579	92,310	98,135
Money market accounts	369,448	368,363	394,279	419,683	360,621
Savings	33,991	35,206	36,168	37,416	38,279
Time, less than $250,000	123,147	120,402	103,678	104,671	126,195
Time, $250,000 and over	45,629	44,003	52,764	39,422	43,963
Total deposits	$         922,379	$         920,329	$         929,045	$         948,120	$         959,300

 

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 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. (OTCQX: FSRL), is based in Florence, South Carolina and has assets of approximately $1.11 billion. The Company employs approximately 160 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 20 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, 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 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
(843) 656-5000
rhaile@firstreliance.com

 

View original content to download multimedia:https://www.prnewswire.com/news-releases/first-reliance-bancshares-reports-third-quarter-2026-results-302922381.html

SOURCE First Reliance Bancshares, Inc.

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What were First Reliance Bancshares' third-quarter 2026 earnings?

First Reliance reported $2.738 million in net income and $0.33 diluted EPS for third-quarter 2026. A year earlier, net income was $2.714 million and diluted EPS was $0.33. Operating earnings, which exclude specified items and are not calculated under generally accepted accounting principles, were $2.927 million, or $0.36 per diluted share.

When is the First Reliance and Colony Bank merger scheduled to close?

The merger is scheduled to close on November 1, 2026, following regulatory and both companies' shareholder approvals. Systems conversion is scheduled for June 2027. Based on each company's assets at September 30, 2026, the combined company will have nearly $5.0 billion in total assets.

Why did First Reliance's nonperforming assets increase in third-quarter 2026?

The increase primarily reflected one loan totaling $5.5 million. The loan was sufficiently collateralized, and no specific allowance for credit loss was recorded as of September 30, 2026.