July 18 , 2008 Florence, SC - First Reliance Bancshares, Inc., (OTC Bulletin Board: FSRL), the holding company for First Reliance Bank, today announced 2nd quarter 2008 unaudited net income of $683,421.

Unaudited net income for the three months ended June 30, 2008 was $683,421, compared to $907,708 reported in the prior-year period. The decline in net income is attributable to the bank’s proactive decision to increase the allowance for loan and lease losses as a precautionary measure for any future economic uncertainties. Net interest income increased to $4.8 million in the second quarter of 2008 over $4.7 million reported the prior year period, while noninterest income was $1.4 million. Diluted earnings per share were $0.24, compared to the $0.26 reported in the prior year period.

Unaudited net income for the six months ended June 30, 2008 was $1.5 million, or $0.43 per diluted share, compared to $1.6 million, or $0.45 per diluted share, for the six months ended June 30, 2007. Net interest income increased to $9.8 million in the six months ended June 30, 2008, over $9.1 million reported the prior year period, while non-interest income was $2.7 million.

As of June 30, 2008, total assets were $585.2 million, an increase of $75.6 million or 14.85%, over the $509.5 million reported for June 30, 2007. Loans increased 15.19% to $460.7 million, funded primarily by growth in deposits. Deposits increased to $456.3 million, up 7.42% from $424.8 million reported the prior year period.

“I am pleased to report solid second quarter results, despite the ongoing challenges of the current economic environment,” commented Rick Saunders, President and CEO of First Reliance Bank. “While market conditions are challenging, our asset quality is strong and continues to improve. Nonperforming loans continue to decline, due largely to our proactive and aggressive risk management systems and emphasis on credit quality. To maintain this positive trend and to manage any future nonperforming assets or charge-offs, we continue to aggressively fund our loan loss reserve. During the second quarter of 2008, we expensed an additional $645,794 to the allowance for loan losses.”

“In this difficult economic environment, we have focused on maintaining adequate levels of liquidity and capital while closely monitoring and controlling expenses. Despite our growth, noninterest expense remains controlled and is relatively unchanged from the prior year period. Our liquidity remains strong, non performing loans continue to improve, and our capital levels continue to exceed “well capitalized” regulatory standards.”

“Although some financial institutions may be negatively impacted by the recent collapse of the sub-prime mortgage loan market, First Reliance Bank does not make sub-prime mortgage loans and has no exposure in this area. We are a financially sound community bank specializing in relationship banking with individuals and businesses in the communities we serve.”

“Throughout 2008, we will continue to focus on growing core deposits and leveraging customer loyalty ratings, while improving our operating efficiencies and managing operating expenses. As we continue to diligently maintain disciplined risk and credit management practices, I am confident that we will continue to attain consistent and sustainable growth.”

About First Reliance Bank
First Reliance Bank, founded in 1999, is ranked in the top 20 banks in South Carolina based on asset size. The bank has assets of approximately $585 million, and employs over 145 highly talented associates. The bank serves the Upstate, Midlands, Piedmont, Low Country, Grand Strand, and Pee Dee regions of South Carolina. The bank has been recognized for its success including being named to the Dave Thomas Foundation’s List of “Best Adoption-Friendly Workplaces” and the only company ever to be named to The Top 25 Fastest Growing Companies™ in South Carolina four times including 2002, 2004, 2005, and 2006 (SC Chamber/Elliott Davis). In June 2007, the bank was added to the Palmetto 25, a list of S.C.’s largest publicly held companies. In 2006 and 2007, the bank was also recognized as One of the Best Places to Work in South Carolina by the SC Chamber of Commerce. First Reliance Bank offers Totally FREE Checking, Totally FREE Business, FREE Coin Machines, a Nationwide NO FEE ATM Network, and a 5 Way Mortgage Service Promise. It also offers 8-8 Extended Hours in all of their Florence, Mt. Pleasant, and Lexington locations and is open on most traditional bank holidays. Its Easy to Do Business With™ standard has earned the young bank a customer satisfaction rating of 94.7% (Performance Solutions-December 2007-Audited). First Reliance Bank is traded as FSRL.OB.

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.

Contact Jeffrey A. Paolucci, Senior Vice President and Chief Financial Officer, (843) 674-3250