First Reliance Bancshares, Inc. · OTC:FSRL
First Reliance Bancshares — Investor Presentation (June 2012)
42 slides from First Reliance Bancshares's investor presentation, Jun 21, 2012
Slide 1: 2012
2012
Slide 2: Forward-Looking Statements
FORWARD - LOOKING STATEMENTS This presentation contains forward - looking statements within the meaning of the Securities Litigation Reform Act of 1995. Forward - looking statements give our expectations or forecasts of future events. Any or all of our forward - looking statements here or in other p
Slide 3: What Are the Drivers of Our Recovery?
WHAT ARE THE DRIVERS OF OUR RECOVERY?
Slide 4: Unemployment Rate April 2012
Unemployment Rate April 2012 Month/Month Year/Year National 8.1% - 0.1 - 0.9 South Carolina 8.8% - 0.1 - 1.6 S.C. Unemployment Rate Improving but still a long way to go!
Slide 5: Home Inventories!
Home Inventories! a sleagsssgesseals , W)e | Joazeesasasacee . H H A soscHl ital { + Hy i jm i | I ; zi = s i 2)\4 | EERE S| 4
Slide 6: RE Values Seem to be Stabilizing
RE Values Seem to be Stabilizing U.S down 1% Home Values!
Slide 7: How is Our Industry Performing?
How is Our Industry Performing?
Slide 8: The industry is rebounding… but slowly!
The industry is rebounding… but slowly!
Slide 9: The industry is well capitalized!
The industry is well capitalized!
Slide 10: Pacific
Pacific ‘Ocean Gulf of Mexicd Retrial woe
Slide 11: SC is still a challenged state
SC is still a challenged state
Slide 12: Size does seem to dictate performance
Size does seem to dictate performance
Slide 13: Community banks make up 91% of all banks in U.S.
Community banks make up 91% of all banks in U.S.
Slide 14: Bottom Line for Community Banks!
Bottom Line for Community Banks! Economic Recovery Positive, but Not Robust Industry Recovery Apparent…But??? • Asset quality will continue to be a burden for small banks • Margin pressure and limited streams impacting earnings quality • Cost to operate and regulatory burden increasing…scale necessa
Slide 15: Strategic Focus 2012
Strategic Focus 2012 • Earnings • Risk Mitigation • Operational Capability • Customer Loyalty • Associate Experience
Slide 16: Company Value
Company Value Franchise Value Capacity to grow earnings stream and Deliver sustained profitability Uniqueness or differentiation in terms of markets, customer segments, management style, service capability, not easily duplicated by competition Financial Value
Slide 17: Classified Assets / Bank Capital
Classified Assets / Bank Capital
Slide 18: Non-Accrual / OREO Levels
Non - Accrual / OREO Levels 0.000001 5.000001 10.000001 15.000001 20.000001 25.000001 30.000001 35.000001 40.000001 45.000001 50.000001 Millions OREO Non-accrual
Slide 19: Net Cost to Carry (% of OREO Book)
Net Cost to Carry (% of OREO Book) 14% : : i 2010 2011 May 2012
Slide 20: Sales Price to Basis
Sales Price to Basis 120% 100% 80% 60% 40% 20% 0% 2009 2010 2011 May 2012
Slide 21: OREO Age Status
OREO Age Status Ju 2010 2011 average Age of OREO (Months) Average Age of OREO at sale date (Months) May 2012
Slide 22: Delinquency Trends
Delinquency Trends 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0% $0 $5 $10 $15 $20 $25 $30 $35 $40 Millions Delinquency Trends 30+ 90+ 30 to 89 % (RHS) 90+ % (RHS)
Slide 23: Revenue vs Operating Expenses
Revenue vs Operating Expenses • Assets Down 32% • Revenue Down 9% (nearly 100% offset by NPL) • Expenses Down 8%
Slide 24: Effective Deposit Pricing Strategies
Effective Deposit Pricing Strategies
Slide 25: Deposit Mix & Its Impact on Cost of Funding
Deposit Mix & It’s Impact on Cost of Funding COF 0.91% in 50 th pct absent brokered funds
Slide 26: Anticipated Margin Improvement
Anticipated Margin Improvement
Slide 27: Effective COF on Deposit Components
First Reliance Bank Florence, SC “EHCOF CDs -C-EMCOFNon-MatDeps-2-Eff COF on IBD Effective COF on Deposit Components net xpane| apd ofa tone RE 280% 209% 291% 1.46% Sapri® | Dest | Mart0 | santo | Sept | Gees | worst | Junie zes | 2am | 2am | zis | 2am | vam | umm | 100m tect GF on Tears aeamngEepou
Slide 28: Net Interest Margin Improvement
Net Interest Margin Improvement YE 2012 4.00%
Slide 29: Net Income 2009-2012 Projected
$(5,368) $574 $(8,625) $- $6,000 -$11,000 -$9,000 -$7,000 -$5,000 -$3,000 -$1,000 $1,000 $3,000 $5,000 $7,000 2009 2010 2011 2012 Proj 2012 Adj Net Income Net Income Net Income In 000s Absent Problem Assets $4.8MM due to DTA write down - limited impact on capital $3.8MM operating loss due to $5.4MM
Slide 30: Regulatory Capital Ratio Trends
First Reliance Bank woiicep Lox Tint Bac Ez Florence, SC Minimume: 295% >86% >= 10% Regulatory Capital Ratio Trends [ throeratios neado-b satisfied to romsinwellcaptalized s-Loverage Reto —2-Tle 1 RE REC IRBA —e-10% RBC Wel Cap Min so aaa Se Ee Es ss ew 8 97 roe 400 an) ase | az | ae aa | ate | 390
Slide 31: Customer Loyalty Drives Growth and Profitability
Customers stay with us longer Our Business Model Customer Loyalty Drives Growth and Profitability Customers do more business with us Customers refer friends and family Customers allow us to earn a fair profit Purpose “To make the lives of our customers better” Customer Value Promise Middle America Y
Slide 32: Driven By Purpose
Driven By Purpose Purpose “To make the lives of our customers better” 96% of Our Customer Believe We achieve our Purpose
Slide 33: Associate Promise
Associate Promise 3 3 Associate Promise To provide an incredible work experience • Committed and caring leadership • Opportunities to do your best work • Reward and recognition that make your life better 92 % Associate Engagement Score
Slide 34: Incredible Experience
Random Experience Predictable Experience Consistent Intentional Branded Experience Consistent Intentional Differentiated Valuable Customer Loyalty Incredible Experience Customer Value Promise • Incredible experience • Distinctive Programs • Unmatched convenience Customer Satisfaction 98%
Slide 35: Distinctive Programs
Distinctive Programs 65% of customers participate in one of our Programs ! Customer Value Promise • Incredible experience • Distinctive Programs • Unmatched convenience
Slide 36: Customers Value our Convenience
81% Customers Value our Convenience! Most Traditional Bank Holidays PLUS: • Free Coin Machines • Same Day Banking • Customer Care Call Center • Banker On Call Mon - Sat 8am - 11pm • Courier Services Unmatched Convenience Customer Value Promise • Incredible experience • Distinctive Programs • Unmatch
Slide 37: Customer Loyalty
Customer Loyalty Primary Financial Institution 2012 74% 2010 64% Customer Loyalty My !
Slide 38: Household Growth
Household Growth 8,063 8,938 9,702 10,679 0 2,000 4,000 6,000 8,000 10,000 12,000 December 2008 December 2009 December 2010 December 2011 Household Growth - 9% 4 - Yr Average Raddon Group - Industry Gross Household Growth 2011 5.7%
Slide 39: Customers Do More Business With Us
Customers Do More Business With Us 0 0.5 1 1.5 2 2.5 3 3.5 4 2009 2010 2011 2.2 3.9 3.9 Services per Household
Slide 40: Customers Willing To Refer For Us
Customers Willing To Refer For Us 81% of customers willing to refer us 0 500 1000 1500 2000 Dec-09 Dec-10 Dec-11 Customer Referrals to New DDA Households 66% 75% 70%
Slide 41: Customers Stay with Us Longer
Customers Stay with Us Longer
Slide 42: Loyal Customers Drive Growth & Profits
Growth & Profits LOYAL CUSTOMERS DRIVES …….. Loyalty Matters
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