Florence, S.C.-basedFirst Reliance Bancshares Inc.redeemed 7,000 of its fixed-rate cumulative perpetual preferred shares, series Aissued under TARP, for $1,000 per share, or a total of $7.0 million.

The redemptionwas funded with the proceedsof a new senior credit facility. The redemption is also expected to reduce the company'safter-tax interest expense and positively impact earnings per share on an annualbasis by 21 cents per share, or approximately $977,000 additional net income tocommon shareholders.

The companyearlier redeemed 4,000of its TARP preferred shares and said that it expects to redeem the remaining 4,349 shares, along with 767 sharesof its series B preferred stock, subject to regulatory approval, during the thirdquarter.