First Reliance Announces 1st Quarter Net Income of $573,703 – Up 33%

April 12, 2006

April 12, 2006 Florence, SC - First Reliance Bancshares, Inc., (OTC Bulletin Board: FSRL), the holding company for First Reliance Bank, reported unaudited pre-tax income for the quarter ended March 31, 2006 of $811,554, an increase of $253,046, or 31%, over the $558,508 reported for the quarter ended March 31, 2005. Unaudited net income increased 33%, to $573,703 as compared to $385,599 reported in the prior-year period. Earnings benefited from strong growth in both net interest income and non-interest income. Specifically, net interest income increased 24% to $4,008,669 for the quarter ended March 31, 2006, while non-interest income increased by 41% to $938,455. Basic earnings per share were $0.17, an increase of $0.05, or 29%, from $0.12 reported in the prior- year period. The earnings per share for the quarter ended March 31, 2006 is based on average shares of 3,344,344 compared to 3,221,902 shares reported in the prior- year period.

At March 31, 2006, total assets were $420 million, an increase of $87 million, or 21% over the $333 million reported for March 31, 2005. Loans increased $50 million, or 16% to $323 million, funded primarily by growth in deposits. Deposits increased to $355 million, up 26% from $261 million reported the prior year period. 

Rick Saunders, President and Chief Executive Officer, commented, “Continuing to focus on our Easy To Do Business With™ promise to our customers will remain a primary focus throughout 2006. The beginning of 2006 met with our newest service initiative that promises our customers:  Any ATM, Anywhere, NO Fees.  We believe this is an extremely complementary addition to our suite of customer focus services.  Our recent groundbreaking in Lexington, SC on a $ 3 million regional office project also supports our commitment to world class service and innovation through design. Delivering on our vision for the future, we were pleased to announce our plans to build a 75,000 square foot corporate center in Florence, SC over the next 2-5 years. The 5 to 7 story building will be situated on 7 acres of land and will include a training facility and child development center for our employees.   The site we have acquired has frontage to I-20 spur and is located just two miles east of the I-95/I-20 intersection the fastest growing economic development corridor in SC for 2005.”

“Our commitment best-in-class customer service has rewarded us with a vote of confidence from our customers in the form of a 95% customer satisfaction rating. (Performance Solutions, February 2006.)  I am confident that these positive trends will provide us with the foundation and momentum needed for another successful year.”

Jeff Paolucci, Senior Vice President and Chief Financial Officer, commented on the quarterly performance results by saying, “The first quarter of 2006 was an outstanding quarter, as the positive results of 2005 continued into the first quarter of 2006.  Expansion into Charleston and Mt. Pleasant has proven to be successful as Low Cost/No Cost deposits grew 32% or $16.4 million over the prior year period. Total deposits increased 26% over the prior year period, due to the success of our Easy To Do Business With™ and There’s More to Banking Than Money™ standards which offer our customers 8-8 extended banking hours, Totally Free Checking, Totally Free Business, free coin machines, $500 Service Promises, and a No Fee ATM Network.  The first quarter of 2006 saw an increase of 22% in account acquisition with 7,171 demand deposit accounts on March 31, 2006, due largely to our Totally Free Checking Program. The company is well-positioned to take advantage of any economic expansion opportunities that this period may provide.”

The Company’s one bank subsidiary, First Reliance, has been recognized for its success including being the only bank ever to be named to The Top 25 Fastest Growing Companies™ in South Carolina three times including 2005 (ElliottDavis.)  First Reliance Bank operates in five locations with Totally Free Checking, Totally Free Business, free coin machines, $500 Service Promises and 8-8 Extended Hours in their Florence location.

Based in Florence, South Carolina, First Reliance Bancshares, Inc., is a bank holding company with approximately $403.1 million in assets as of December 31, 2005. First Reliance Bank, which was opened in 1999, is the Company's sole operating subsidiary. The bank, which serves as one of the only locally owned and operated banks in the Florence area, maintains two branch locations and a Technology Center in Florence, SC.  In addition, the bank’s aggressive planned growth strategy resulted in expansion into the Columbia, SC market where they opened a Lexington regional facility in 2004. In March of 2005, the Charleston regional office was opened in historic downtown Charleston, SC.  Their newest facility, opened in the 3rd quarter of 2005, will serve the Mt. Pleasant, SC community. During the fourth quarter, the bank acquired its third Charleston branch site located at 2031 Sam Rittenberg Blvd. Charleston, SC, with plans to open this location in 2006. Additional branch expansions over the next 24 months include new sites located in North Charleston, the Midlands Region, and the Upstate Region.  The Company's stock is traded on the OTC Bulletin Board under the symbol "FSRL". Information about the Company is available on our website at www.firstreliance.com.

This press release contains forward-looking statements about branch openings 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 publications may turn out to be incorrect. They can be affected by inaccurate assumptions or by known or unknown risks and uncertainties. Many such factors will be important in determining our actual future results. Consequently, no forward- looking statements can be guaranteed. Our actual results may vary materially, and there are no guarantees about the performance of our stock.

We undertake no obligation to correct or update any forward-looking statements, whether as a result of new information, future results or otherwise. You are advised, however, to consult any future disclosures we make on related subjects in our reports to the SEC.