Overview

• US community bank's Q2 net income fell 23% yr/yr, EPS at $0.34

• Net interest income rose 8.4% yr/yr, net interest margin decreased during the quarter to 3.74%

• Company announced merger with Colony Bank, expected to close in Q4 2026

Outlook

• First Reliance expects merger with Colony Bank to close in fourth quarter 2026

• Company says asset quality remains strong as nonperforming assets declined in Q2

Result Drivers

• NET INTEREST INCOME GROWTH - Higher yields on loans and investment securities and lower interest expense contributed to increased net interest income and margin

• ASSET QUALITY IMPROVEMENT - Nonperforming assets declined due to payoff of a large nonaccrual loan

• LOWER NONINTEREST INCOME - Noninterest income fell from prior year due to absence of prior-year branch sale gain

Company press release: ID:nPn2m4tkDa

Key Details

Metric	Beat/Miss	Actual	Consensus Estimate
Q2 EPS		$0.34
Q2 Net Income		$2.8 mln
Q2 Net Interest Income		$9.9 mln
Q2 Net Interest Margin		3.74%

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 2 "strong buy" or "buy", no "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the banks peer group is "buy"

• Wall Street's median 12-month price target for First Reliance Bancshares Inc is $17.00, about 10.1% below its July 21 closing price of $18.90

• The stock recently traded at 12 times the next 12-month earnings vs. a P/E of 10 three months ago

Reuters Recommended Reads

• July 21 - Southern First Bancshares' Q2 profit rises on loan growth and margin expansion

• July 22 - John Marshall Bancorp Q2 net income rises as interest margin expands

• July 22 - Parke Bancorp Q2 net interest income rises on higher loan yields

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