For Immediate Release

First Reliance Announces 2nd Quarter Pre-Tax Income of $1,167,411 – Up 100%

July 19, 2006

July 19, 2006 Florence, SC - First Reliance Bancshares, Inc., (OTC Bulletin Board: FSRL), the holding company for First Reliance Bank, today announced 2nd quarter 2006 unaudited pre-tax income of $1.2 million, an increase of $579,338, or 100%, compared to $588,073 reported the second quarter of 2005.

Unaudited net income increased 92%, to $822,916, as compared to $429,403 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 26% to $4.4 million in the second quarter of 2006, while non-interest income increased by 60% to $1.3 million. Basic earnings per share grew 85%, to $0.24, an increase of $0.11 from the $0.13 reported in the prior year period. 

Net Income for the six months ended June 30, 2006 grew 63% to $1.4 million, or $0.39 per diluted share, compared to $815,002, or $0.24 per diluted share, for the second quarter of 2005.  As was the case with the quarterly results, the higher profitability was driven primarily by higher net interest income, which increased 29%, and noninterest income, which increased 58%.

As of June 30, 2006, total assets were $433.1 million, an increase of $70.4 million or 19%, over the $362.8 million reported for June 30, 2005. Loans increased 15% to $349.0 million, funded primarily by growth in deposits. Deposits increased to $353.9 million, up 19% from $297 million reported the prior year period.

“These earnings give us the faith that our growth, while dramatic, is well balanced.  I am equally as excited to report a record number of accounts were opened this quarter,” commented Rick Saunders, President & CEO.  “Our Easy To Do Business With™  and There’s More to Banking Than Money™ banking  initiatives and standards promise our customers a convenient and hassle-free banking experience.  Much of our continued success in growth and profitability can be attributed to the increased focus on our retail strategy.”  Products and services offered under these initiatives include:  Nationwide No Fee ATM network, Business Couriers and extended banking hours.”  Anyone who has visited our flagship branch after 7:00 pm on any given evening and witnessed the amount, and type, of activity, would not be surprised with this growth.   This 8-8 The New Bankers’ Hours™ initiative has been so successful that we will introduce this in all locations in 2007.

“While we continue to grow households in our core services, we are more excited that our attrition rate has fallen to almost half of the national average.  I believe that this is a direct result of our commitment of providing best-in-class customer service.   This momentum, combined with forthcoming initiatives will continue to improve our customers’ experience.  It is that experience which drives loyalty and leads to bottom line performance” Saunders concluded.

Jeff Paolucci, Senior Vice President and Chief Financial Officer, commented, “Focusing on our vision to be ‘The largest and most profitable bank in South Carolina’, our efforts continue to remain on expansion opportunities throughout the state.  It is our standard and strategy to locate markets with the highest potential for growth and then place the best bankers in these locations.  To achieve this goal, we have secured sites in Irmo, Lexington, and Charleston, where we anticipate building new branches that will offer our customers world class service through the latest in innovation and design.   Our tremendous growth has also spurred the need for an additional operational facility in Florence, SC, scheduled to be completed by the end of the year.

“The positive gains realized in the 1st quarter continued throughout the 2nd quarter, as Low Cost/No Cost deposits grew by $3.3 million over the 1st quarter and these now represent 21% of total deposits.  Total deposits for the 2nd quarter were $343.5 million, due much to our Totally Free Checking and Totally Free Business programs” noted Paolucci.

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, 5 Way Mortgage 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 $450 million in assets as of June 30, 2006. First Reliance Bank, which was opened in 1999, is the Company's sole operating subsidiary. The bank has two branch locations and a Technology Center in Florence, SC.  In addition, the bank’s aggressive statewide growth strategy includes current branches in Lexington, Mount Pleasant and downtown Charleston SC.  During the fourth quarter of 2005, the bank acquired its third Charleston branch site located at 2031 Sam Rittenberg Blvd. Charleston, SC. 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.OB. 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.