First Reliance Bancshares Inc., (OTC Bulletin Board: FSRL), the holding company for First Reliance Bank, reported unaudited pre-tax income for the year ended Dec. 31, 2005 of $2,736,962, an increase of $827,730, or 43%, over the $1,909,232 reported for the year ended Dec. 31, 2004. Unaudited net income increased 45%, to $1,947,546 as compared to $1,338,699 reported in the prior-year period. Earnings benefited from strong growth in both net interest income and non-interest income. Specifically, interest income increased 74% to $23.1 million for the year ended Dec. 31, 2005, while non-interest income increased by 36% to $3.2 million. Basic earnings per share were $0.60, an increase of $0.08 from $0.52 reported in the prior-year period. The earnings per share for the year ending Dec. 31, 2005 is based on average shares of 3,436,750 compared to 2,580,251 shares reported in the prior-year period.

Net income for the three months ended Dec. 31, 2005 was $642,116, an increase of $305,098, or 91% from the level reported in the prior year three-month period. As was the case with the year end results, the higher profitability was driven primarily by higher interest income, which increased 62%, and non-interest income, which increased 57%. Basic earnings per share were $0.20 compared to $0.15 for the prior-year period, an increase of $0.05.

At Dec. 31, 2005, total assets were $403.1 million, an increase of $118.1 million, or 41% over the $285.0 million reported for Dec. 31, 2004. Loans increased $73.1 million, or 31% to $311.5 million, funded primarily by growth in deposits. Deposits increased to $334.4 million, up 48% from $225.5 million reported the prior year period.

President and Chief Executive Officer Rick Saunders commented, “This is a lifting time for our company and we are excited about the outstanding results produced throughout the organization. At First Reliance Bank, Low Cost/No Cost deposit growth was the fuel for that excitement. We were able to grow that segment over 32% for the year and that allowed us to validate our continued investment in our retail strategy. Our deposit trends allow us to leverage our service strategy in order to expand our lucrative loan portfolio. We increased our asset size from 2004 to 2005, in part due to our expansion into the Charleston, SC market. However, our organic same store growth was substantial averaging about 40% for the existing three branches.

“Continuing to focus on superior service and delivery will be the focus in 2006. We have set a goal to measure everything we do against our Easy To Do Business With™ standard. We have seen customers respond to our approach and they have rewarded us with a customer satisfaction rating of 94%, where 81% of the respondents scored us in the highest category. Our associates continue to over perform at every opportunity. We look forward to 2006 as we have set our goals high, as in the past. I feel fortunate to be part of this wonderful ride.”

2005 highlights include: 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 Business, free coin machines, $500 Service Promises and 8-8 extended hours in their Florence location.