First Reliance Bancshares Reports First Quarter 2025 Results

FLORENCE, S.C. , April 24, 2025 /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 first quarter of 2025. First Quarter 2025 Highlights Rick Saunders , Chief Executive Officer, stated: "We continue to grow our balance sheet, improve our net interest margin and improve our efficiency ratio. Despite a large increase in the provision expense due to strong loan growth in both funded and unfunded commitments, our operating earnings improved 36% year over year, and our tangible book value per share improved by 15.



1%. We expanded our NIM 38 basis points this quarter compared to the first quarter of 2024. We expect the transaction for the two branches in North Carolina to close in late May of 2025, which we believe will further improve our operating efficiency.

Credit quality remained steady with low net charge offs and low nonperforming assets. We remain committed to our communities and the markets we serve by providing exceptional service and banking solutions for our clients." Financial Summary Three Months Ended Mar 31 Dec 31 Sep 30 Jun 30 Mar 31 ($ in thousands, except per share data) 2025 2024 2024 2024 2024 Earnings: Net income available to common shareholders $ 1,613 $ 918 $ 1,825 $ 1,942 $ 1,238 Operating earnings (Non-GAAP) 1,665 1,698 1,950 1,942 1,223 Earnings per common share, diluted 0.

19 0.11 0.22 0.

24 0.15 Operating earnings, diluted (Non-GAAP) 0.20 0.

21 0.24 0.24 0.

15 Total revenue (1) 11,158 9,809 9,855 10,226 9,690 Net interest margin 3.49 % 3.38 % 3.

27 % 3.20 % 3.11 % Return on average assets (2) 0.

59 % 0.35 % 0.69 % 0.

75 % 0.49 % Return on average equity (2) 8.15 % 4.

66 % 9.60 % 10.69 % 7.

01 % Efficiency ratio (3) 75.52 % 86.42 % 76.

90 % 75.21 % 81.04 % As of Mar 31 Dec 31 Sep 30 Jun 30 Mar 31 ($ in thousands) 2025 2024 2024 2024 2024 Balance Sheet: Total assets $ 1,097,389 $ 1,067,104 $ 1,071,480 $ 1,058,395 $ 1,027,616 Total loans receivable 784,469 753,738 739,219 739,433 725,234 Total deposits 978,667 951,411 951,948 899,799 881,309 Total transaction deposits (4) to total deposits 39.

46 % 38.64 % 38.82 % 39.

18 % 39.86 % Loans to deposits 80.16 % 79.

22 % 77.65 % 82.18 % 82.

29 % Bank Capital Ratios: Total risk-based capital ratio 12.99 % 13.48 % 13.

56 % 13.34 % 13.46 % Tier 1 risk-based capital ratio 11.

92 % 12.43 % 12.51 % 12.

28 % 12.37 % Tier 1 leverage ratio 9.80 % 9.

96 % 9.87 % 10.01 % 10.

16 % Common equity tier 1 capital ratio 11.92 % 12.43 % 12.

51 % 12.28 % 12.37 % Asset Quality Ratios: Nonperforming assets as a percentage of total assets 0.

09 % 0.11 % 0.09 % 0.

03 % 0.03 % Allowance for credit losses as a percentage of total loans receivable 1.10 % 1.

12 % 1.13 % 1.15 % 1.

17 % Annualized quarterly net charge-offs as a percentage of average total loans receivable 0.08 % 0.00 % 0.

03 % 0.05 % 0.06 % Footnotes to table located at the end of this release.

CONDENSED CONSOLIDATED INCOME STATEMENTS – Unaudited Three Months Ended Mar 31 Dec 31 Sep 30 Jun 30 Mar 31 ($ in thousands, except per share data) 2025 2024 2024 2024 2024 Interest income Loans $ 11,293 $ 11,053 $ 10,930 $ 10,746 $ 10,085 Investment securities 2,166 2,015 1,969 1,875 1,972 Other interest income 318 512 623 419 291 Total interest income 13,777 13,580 13,522 13,040 12,348 Interest expense Deposits 4,468 4,613 4,833 4,652 4,332 Other interest expense 544 564 585 722 808 Total interest expense 5,012 5,177 5,418 5,374 5,140 Net interest income 8,765 8,403 8,104 7,666 7,208 Provision for credit losses 707 141 (83) 55 207 Net interest income after provision for loan losses 8,058 8,262 8,187 7,611 7,001 Noninterest income Mortgage banking income 1,351 1,207 805 1,416 1,375 Service fees on deposit accounts 319 327 327 307 336 Debit card and other service charges, commissions, and fees 529 550 528 568 519 Income from bank owned life insurance 102 108 105 103 102 Loss on sale of securities, net (182) (146) (162) - - Gain on early extinguishment of debt 140 - - - - Gain (loss) on disposal / write down of fixed assets - (838) - - 20 Other income 134 198 148 166 130 Total noninterest income 2,393 1,406 1,751 2,560 2,482 Noninterest expense Compensation and benefits 5,281 5,028 4,682 4,693 4,878 Occupancy and equipment 791 890 848 837 841 Data processing, technology, and communications 1,156 1,184 994 1,119 1,039 Professional fees 153 268 265 96 110 Marketing 123 103 66 102 160 Other 923 1,003 723 844 826 Total noninterest expense 8,427 8,476 7,578 7,691 7,854 Income before provision for income taxes 2,024 1,192 2,360 2,480 1,629 Income tax expense 411 273 535 538 391 Net income available to common shareholders $ 1,613 $ 919 $ 1,825 $ 1,942 $ 1,238 Add back loss (gain) on fixed assets, net of tax - 646 - - (15) Subtract gain on early extinguishment of debt, net of tax (111) Add back expenses related to branch sale, net of tax 18 21 - - - Add back securities losses, net of tax 145 113 125 - - Operating earnings (Non-GAAP) $ 1,665 $ 1,699 $ 1,950 $ 1,942 $ 1,223 Weighted average common shares - basic 7,868 7,851 7,847 7,851 7,837 Weighted average common shares - diluted 8,331 8,274 8,221 8,260 8,217 Basic net income per common share * $ 0.21 $ 0.12 $ 0.

23 $ 0.25 $ 0.16 Diluted net income per common share * $ 0.

19 $ 0.11 $ 0.22 $ 0.

24 $ 0.15 Operating earnings per common share (Non-GAAP) * $ 0.21 $ 0.

22 $ 0.25 $ 0.25 $ 0.

16 Operating earnings per diluted common share (Non-GAAP) * $ 0.20 $ 0.21 $ 0.

24 $ 0.24 $ 0.15 * 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 diluted.

Net income for the three months ended March 31, 2025 , was $1.6 million , or $0.19 per diluted common share, compared to $1.

2 million , or $0.15 per diluted common share, for the three months ended March 31 , 2024. On an operating basis, the first quarter of 2025 diluted EPS was $0.

20 , compared to $0.15 diluted EPS for the first quarter of 2024. During the first quarter of 2025, the Company added back the impact of securities losses, net of tax, of $145 thousand , cost related to the branch sale, net of tax, of $18 thousand , and subtracted the gain on early extinguishment of debt, net of tax, of $111 thousand compared to subtracting the after-tax gain on the sale of fixed assets of $15 thousand in the first quarter of 2024.

The provision for credit losses for loans was $364 thousand , and for unfunded commitments was $343 thousand , totaling $707 thousand for the first quarter of 2025. The increase in the ACL for loans was primarily driven by loan growth, and the increase in the reserve for unfunded commitments was primarily the result of increases in construction commitments and the expected term of those related loans. Noninterest income for the three months ended March 31, 2025 , was $2.

4 million , a decrease of $89 thousand from $2.5 million in the first quarter of 2024. Noninterest income was primarily driven by mortgage banking income which totaled $1.

4 million in both the first quarter of 2025 and the first quarter of 2024. In the first quarter of 2025, the company recognized securities losses, $182 thousand , which was partially offset by $140 thousand gain on the early extinguishment of debt. Noninterest expense for the three months ended March 31, 2025 , was $8.

4 million , an increase of $573 thousand from $7.9 million in the first quarter of 2024. The increase was primarily driven by an increase in higher compensation and benefits of $403 thousand primarily from salaries, payroll taxes, and equity compensation; and from higher data processing and technology cost of $117 thousand .

Operating adjustments - 1Q 2025 During the first quarter of 2025, the Company recorded the following non-recurring transactions: Fixed Assets and Right of Use Assets – 4Q 2024 During the fourth quarter of 2024 the Company wrote off two leases totaling $538 thousand . One was a land lease that the company no longer intends to use, which totaled $504 thousand . The other lease related to a facility that was consolidated into the main banking location in Charleston which expires in mid-2025 and totaled $34 thousand .

These two written off leases will reduce annual occupancy cost by $180 thousand in 2025 and by $147 thousand in 2026, 2027 and part of 2028. In addition, a fixed asset was written down by $300,000 related to a parcel of land in North Charleston that the company owns, and it was written down to fair value and remains for sale. NET INTEREST INCOME AND MARGIN – Unaudited - QTD For the Three Months Ended March 31, 2025 December 31, 2024 March 31, 2024 Average Income/ Yield/ Average Income/ Yield/ Average Income/ Yield/ ($ in thousands) Balance Expense Rate Balance Expense Rate Balance Expense Rate Assets Interest-earning assets: Federal funds sold and interest-bearing deposits $ 37,230 $ 292 3.

18 % $ 44,366 $ 485 4.35 % $ 27,557 $ 266 3.88 % Investment securities 180,710 2,166 4.

86 % 179,750 2,015 4.46 % 169,174 1,972 4.69 % Nonmarketable equity securities 1,496 26 7.

06 % 1,524 27 6.99 % 2,224 25 4.56 % Loans held for sale 23,551 364 6.

27 % 21,610 322 5.93 % 15,639 254 6.53 % Loans 775,652 10,929 5.

71 % 741,672 10,731 5.76 % 716,237 9,831 5.52 % Total interest-earning assets 1,018,639 13,777 5.

49 % 988,922 13,580 5.46 % 930,831 12,348 5.34 % Allowance for credit losses (8,616) (8,317) (8,401) Noninterest-earning assets 81,136 78,137 79,678 Total assets $ 1,091,159 $ 1,058,742 $ 1,002,108 Liabilities and Shareholders' Equity Interest-bearing liabilities: NOW accounts $ 158,710 $ 230 0.

59 % $ 140,981 $ 245 0.69 % $ 142,303 $ 291 0.82 % Savings & money market 429,861 2,872 2.

71 % 405,445 2,910 2.86 % 341,680 2,445 2.88 % Time deposits 156,527 1,366 6.

54 % 160,417 1,458 3.62 % 174,169 1,596 3.69 % Total interest-bearing deposits 745,098 4,468 2.

43 % 706,843 4,613 2.60 % 658,152 4,332 2.65 % FHLB advances and other borrowings 15,162 213 5.

70 % 16,332 202 4.93 % 31,665 437 5.55 % Subordinated debentures 24,761 331 5.

42 % 25,750 362 5.59 % 25,727 371 5.81 % Total interest-bearing liabilities 785,021 5,012 2.

59 % 748,925 5,177 2.75 % 715,544 5,140 2.89 % Noninterest bearing deposits 214,733 217,863 202,136 Other liabilities 12,185 13,118 13,768 Shareholders' equity 79,220 78,836 70,660 Total liabilities and shareholders' equity $ 1,091,159 $ 1,058,742 $ 1,002,108 Net interest income (tax equivalent) / interest rate spread $ 8,765 2.

90 % $ 8,403 2.71 % $ 7,208 2.45 % Net Interest Margin 3.

49 % 3.38 % 3.11 % Cost of funds, including noninterest-bearing deposits 2.

03 % 2.13 % 2.25 % Net interest income for the three months ended March 31, 2025 , was $8.

8 million compared to $7.2 million for the three months ended March 31 , 2024. This increase was the result of an increase in interest income of $1.

4 million , and lower interest expense of $128,000 . This resulted in an improved net interest margin of 38 basis points to 3.49% from 3.

11% one year ago, led by the loan portfolio yield which improved by 19 basis points, while yield on interest-bearing liabilities improved by 30 basis points. In addition, the total cost of funds, including noninterest-bearing deposits, decreased to 2.03% in the first quarter of 2025, compared to 2.

25% in the first quarter of 2024. On a linked quarter basis, our net interest margin improved 13 basis points, or $362,000 . CONDENSED CONSOLIDATED BALANCE SHEETS – Unaudited As of Mar 31 Dec 31 Sep 30 Jun 30 Mar 31 ($ in thousands) 2025 2024 2024 2024 2024 Assets Cash and cash equivalents: Cash and due from banks $ 5,011 $ 4,604 $ 4,730 $ 5,669 $ 5,482 Interest-bearing deposits with banks 32,922 42,623 61,934 41,391 36,173 Total cash and cash equivalents 37,933 47,227 66,664 47,060 41,655 Investment securities: Investment securities available for sale 181,596 175,846 177,641 173,298 171,075 Other investments 950 886 883 2,788 2,548 Total investment securities 182,546 176,732 178,524 176,087 173,623 Mortgage loans held for sale 22,424 20,974 19,929 25,776 18,307 Loans receivable: Loans 784,469 753,738 739,219 739,433 725,234 Less allowance for credit losses (8,654) (8,434) (8,317) (8,498) (8,497) Loans receivable, net 775,815 745,304 730,902 730,935 716,737 Property and equipment, net 21,987 21,353 21,861 22,040 22,185 Mortgage servicing rights 13,614 13,410 12,690 12,680 12,226 Bank owned life insurance 18,710 18,608 18,501 18,396 18,293 Deferred income taxes 6,938 7,709 6,292 7,612 7,990 Other assets 17,422 15,787 16,117 17,809 16,600 Total assets 1,097,389 1,067,104 1,071,480 1,058,395 1,027,616 Liabilities Deposits $ 978,667 $ 951,411 $ 951,948 $ 899,799 $ 881,309 Federal Home Loan Bank advances (FHLB) - - - 40,000 35,000 Federal funds and repurchase agreements - - - 408 - Subordinated debentures 14,453 15,444 15,436 15,428 15,421 Junior subordinated debentures 10,310 10,310 10,310 10,310 10,310 Reserve for unfunded commitments 771 428 410 364 398 Other liabilities 11,972 11,755 12,866 17,590 13,070 Total liabilities 1,016,173 989,348 990,970 983,899 955,508 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 88 Treasury stock, at cost (6,458) (5,699) (5,285) (5,216) (4,965) Nonvested restricted stock (2,566) (2,340) (2,444) (2,463) (2,900) Additional paid-in capital 56,408 55,789 55,763 55,645 56,134 Retained earnings 41,284 39,671 38,753 36,928 34,986 Accumulated other comprehensive (loss) income (7,541) (9,754) (6,366) (10,487) (11,236) Total shareholders' equity 81,216 77,756 80,510 74,496 72,108 Total liabilities and shareholders' equity $ 1,097,389 $ 1,067,104 $ 1,071,480 $ 1,058,395 $ 1,027,616 First Reliance cash and cash equivalents totaled $37.9 million at March 31, 2025 , compared to $47.2 million at December 31 , 2024.

Cash with the Federal Reserve Bank totaled $32.5 million as of March 31, 2025 , compared to $41.8 million at December 31, 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 $181.6 million and $175.

8 million , at March 31, 2025 and December 31, 2024 , respectively. The unrealized loss recorded on AFS securities totaled $10.0 million as of March 31,2025 , compared to $12.

9 million as of December 31, 2024 , a decrease during the first quarter of 2025 of $2.9 million , pre-tax. As of March 31, 2025 , deposits increased by $27.

3 million , or 11.5% annualized. See page 9 for detail on the deposit balance amounts over the past five quarters.

The Company had no outstanding borrowings with the FHLB of Atlanta at March 31, 2025 or at December 31, 2024 . During the first quarter of 2025, the Company retired $1.0 million of subordinated debt with payment of $860,000 , resulting in a gain of $140,000 on the early extinguishment of debt.

$500 thousand of the retired debt had a fixed interest rate of 5.875% and $500 thousand had a fixed interest rate of 3.375%.

The Company's subordinated debt with a current interest rate of 5.875% becomes callable in the second quarter of 2025. The Company is evaluating the possibility of calling this debt.

COMMON STOCK SUMMARY - Unaudited As of 31-Mar Dec 31 Sep 30 Jun 30 Mar 31 (shares in thousands) 2025 2024 2024 2024 2024 Voting common shares outstanding 8,786 8,764 8,820 8,819 8,785 Treasury shares outstanding (809) (731) (751) (743) (649) Total common shares outstanding 7,977 8,033 8,069 8,076 8,136 Book value per common share $ 10.18 $ 9.68 $ 9.

98 $ 9.22 $ 8.86 Tangible book value per common share - Non-GAAP (5) $ 10.

09 $ 9.59 $ 9.89 $ 9.

13 $ 8.77 Stock price: High $ 9.98 $ 10.

24 $ 10.59 $ 8.30 $ 8.

65 Low $ 9.35 $ 9.16 $ 7.

60 $ 7.60 $ 7.70 Period end $ 9.

45 $ 9.59 $ 10.14 $ 7.

90 $ 8.15 Book value (BV) and tangible book value (TBV) per share increased $0.50 per share during the first quarter of 2025.

BV and TBV increased $1.32 per share since March 31, 2024 , or 15%. ASSET QUALITY MEASURES – Unaudited As of Mar 31 Dec 31 Sep 30 Jun 30 Mar 31 ($ in thousands) 2025 2024 2024 2024 2024 Nonperforming Assets Commercial Owner occupied RE $ 42 $ 44 $ 46 $ 49 $ - Non-owner occupied RE 655 646 701 - - Construction - 66 - 62 - Commercial business 146 328 57 12 12 Consumer Real estate 40 42 44 46 48 Home equity - - - - - Construction - - - - - Other 50 64 61 66 52 Nonaccruing loan modifications - - - - 56 Total nonaccrual loans $ 933 $ 1,190 $ 909 $ 235 $ 168 Other assets repossessed - 11 15 75 114 Total nonperforming assets $ 933 $ 1,201 $ 924 $ 310 $ 282 Nonperforming assets as a percentage of: Total assets 0.

09 % 0.11 % 0.09 % 0.

03 % 0.03 % Total loans receivable 0.12 % 0.

16 % 0.12 % 0.04 % 0.

04 % Accruing loan modifications $ 369 $ 400 $ 428 $ 460 $ 970 Three Months Ended Mar 31 Dec 31 Sep 30 Jun 30 Mar 31 ($ in thousands) 2025 2024 2024 2024 2024 Allowance for Credit Losses Balance, beginning of period $ 8,434 $ 8,317 $ 8,498 $ 8,497 $ 8,393 Loans charged-off 163 24 69 102 195 Recoveries of loans previously charged-off 19 18 17 14 82 Net charge-offs (recoveries) 144 6 52 88 113 Provision for credit losses (release) 364 123 (129) 89 217 Balance, end of period $ 8,654 $ 8,434 $ 8,317 $ 8,498 $ 8,497 Allowance for credit losses to gross loans receivable 1.10 % 1.12 % 1.

13 % 1.15 % 1.17 % Allowance for credit losses to nonaccrual loans 927.

54 % 708.74 % 914.96 % 3616.

17 % 5057.74 % Asset quality remained steady during the first quarter of 2025, with nonperforming assets decreasing to $933 thousand , which represents 0.09% of total assets.

The decrease was in all categories, except one, non-owner occupied RE. The allowance for credit losses as a percentage of total loans receivable decreased to 1.10% at March 31, 2025 compared to 1.

12% at December 31, 2024 , and compared to 1.17% at March 31 , 2024. The allowance for credit losses increased by a provision for credit losses of $364 thousand offset by net charge-offs of $144 thousand , during the first quarter of 2025.

In the first quarter of 2024, the Company experienced net charge-offs of $113 thousand and increased the ACL with a provision for credit losses of $217 thousand . Footnotes to table located at the end of this release. LOAN COMPOSITION – Unaudited As of Mar 31 Dec 31 Sep 30 Jun 30 Mar 31 ($ in thousands) 2025 2024 2024 2024 2024 Commercial real estate $ 482,201 $ 463,301 $ 456,775 $ 450,936 $ 434,743 Consumer real estate 216,964 204,303 193,362 188,759 184,969 Commercial and industrial 65,573 65,980 66,561 76,149 77,023 Consumer and other 19,731 20,154 22,521 23,589 28,499 Total loans, net of deferred fees 784,469 753,738 739,219 739,433 725,234 Less allowance for credit losses 8,654 8,434 8,317 8,498 8,497 Total loans, net $ 775,815 $ 745,304 $ 730,902 $ 730,935 $ 716,737 DEPOSIT COMPOSITION – Unaudited As of Mar 31 Dec 31 Sep 30 Jun 30 Mar 31 ($ in thousands) 2025 2024 2024 2024 2024 Noninterest-bearing $ 224,031 $ 227,471 $ 219,279 $ 220,330 $ 212,083 Interest-bearing: DDA and NOW accounts 162,129 140,116 150,312 132,186 139,229 Money market accounts 393,736 381,602 362,834 325,769 307,696 Savings 39,719 40,627 41,184 42,479 44,191 Time, less than $250,000 122,613 120,397 133,940 128,869 125,248 Time, $250,000 and over 36,439 41,198 44,399 50,166 52,862 Total deposits $ 978,667 $ 951,411 $ 951,948 $ 899,799 $ 881,309 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. (OTC: FSRL.

OB), is based in Florence, South Carolina and has assets of approximately $1.097 billion . The Company employs approximately 170 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 92% customer satisfaction rating, well above the community bank industry average of 82%. First Reliance has also received "the Best Places to Work in South Carolina award" for 19 years consecutive years.

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 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 (843) 656-5000 rhaile@firstreliance.

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