<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended March 31, 1997
--------------
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission file number: 0-27702
Bank of South Carolina Corporation
----------------------------------
(Exact name of small business issuer as specified in its charter)
South Carolina 57-1021355
------------------------------- ----------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
256 Meeting Street, Charleston, SC 29401
----------------------------------------
(Address of principal executive offices)
(803) 724-1500
(Issuer's Telephone Number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes X No
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As of April 30, 1997, there were 2,314,514 Common Shares outstanding.
Transitional Small Business Disclosure Format (Check one):
Yes No X
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Table of Contents
BANK OF SOUTH CAROLINA CORPORATION
Report on Form 10-QSB
for quarter ended
March 31, 1997
<TABLE>
<CAPTION>
Page
----
<S> <C>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets - March 31, 1997
and December 31, 1996 . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Consolidated Statements of Operations - Three months
ended March 31, 1997 and 1996 . . . . . . . . . . . . . . . . . . . . . . 4
Consolidated Statements of Changes in Shareholders
Equity - Three months ended March 31, 1997 . . . . . . . . . . . . . . . 5
Consolidated Statements of Cash Flows - Three months
ended March 31, 1997 and 1996 . . . . . . . . . . . . . . . . . . . . . . 6
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . 7 - 8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations . . . . . . . . . . . 8 - 10
Liquidity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Capital Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Impact of New Accounting Pronouncements . . . . . . . . . . . . . . . . 11
Effect of Inflation and Changing Prices . . . . . . . . . . . . . . . . 11
PART II - OTHER INFORMATION
Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Item 2. Changes in Securities . . . . . . . . . . . . . . . . . . . . . . . . . 11
Item 3. Default Upon Senior Securities . . . . . . . . . . . . . . . . . . . . . 12
Item 4. Submission of Matters to a Vote of Security Holders . . . . . . . . . . 12
Item 5. Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . . . . . 12
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
</TABLE>
2
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PART I - ITEM 1 - FINANCIAL STATEMENTS
BANK OF SOUTH CAROLINA CORPORATION
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
<TABLE>
<CAPTION>
Assets: March 31, 1997 December 31, 1996
-------------- -----------------
<S> <C> <C>
Cash and due from banks $ 5,546,622 $ 5,980,344
Interest bearing deposits in other banks 6,243 6,185
Federal funds sold and repurchase agreements 6,895,000 4,675,000
Investment securities available for sale 20,131,435 19,231,905
Loans 73,268,536 71,660,124
Allowance for loan losses 1,093,295 1,041,216
------------- -------------
Net loans 72,175,241 70,618,908
Equipment and leasehold improvements, net 2,027,360 1,149,994
Other assets 1,263,636 1,173,080
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Total assets $ 108,045,537 $ 102,835,416
============= =============
Liabilities and shareholders' equity:
Deposits:
Non-interest bearing demand $ 20,000,236 $ 21,380,352
Interest bearing demand 15,826,776 16,969,563
Money market accounts 18,981,965 17,397,957
Certificates of deposit $100,000 and over 17,614,101 13,790,007
Other time deposits 12,951,078 11,577,303
Other savings deposits 4,094,520 3,715,055
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Total deposits 89,468,676 84,830,237
Short-term borrowings 3,188,300 2,392,408
Other liabilities 789,388 718,958
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Total liabilities 93,446,364 87,941,603
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Common Stock - No par value;
3,000,000 shares authorized;
Issued and outstanding 2,341,514 shares
at March 31, 1997, and 2,314,234 shares
at December 31, 1996 - -
Additional paid in capital 12,206,882 12,082,882
Retained earnings 2,907,162 3,252,807
Unrealized gain on securities
available for sale, net of income taxes 35,815 108,810
Treasury stock (35,000 shares) 550,686 550,686
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Total shareholders' equity 14,599,173 14,893,813
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Total liabilities and shareholders' equity $ 108,045,537 $ 102,835,416
============= =============
</TABLE>
See accompanying notes to consolidated financial statements.
3
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BANK OF SOUTH CAROLINA CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
Quarter Ended
March 31, 1997 March 31, 1996
-------------- --------------
<S> <C> <C>
Interest and fee income
Interest and fees on loans $1,731,635 $1,488,356
Interest and dividends on investment securities 309,082 217,754
Other interest income 58,846 139,947
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Total interest and fee income 2,099,563 1,846,057
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Interest expense
Interest on deposits 636,379 557,571
Interest on short-term borrowings 27,329 15,033
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Total interest expense 663,708 572,604
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Net interest income 1,435,855 1,273,453
Provision for loan losses 52,500 15,000
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Net interest income after provision for loan losses 1,383,355 1,258,453
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Other income
Service charges, fees and commissions 142,384 92,167
(Loss) on investment securities - 2,569
Other non-interest income (expense) 6,196 53,954
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Total other income 148,580 35,644
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Other expense
Salaries and employee benefits 528,277 442,220
Net occupancy expense of premises 216,195 185,698
Other operating expenses 218,654 167,015
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Total other expense 963,126 794,933
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Income before income tax expense 568,809 499,164
Income tax expense 212,000 184,639
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Net income $ 356,809 $ 314,525
========== ==========
Net income per common share $ .15 $ .13
========== ==========
Dividends per common share $ .30 $ .05
========== ==========
Weighted average shares outstanding 2,334,542 1,179,988
========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
4
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BANK OF SOUTH CAROLINA CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED)
THREE MONTHS ENDED MARCH 31, 1997
<TABLE>
<CAPTION>
Unrealized
gain (loss)
on securities
Common Additional Retained Treasury available
Stock Paid In Capital Earnings Stock for sale Total
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance,
December 31, 1996 $ - $ 12,082,882 $ 3,252,807 $ 550,686 $ 108,810 $ 14,893,813
Shares issued for the
exercise of stock options - 124,000 - - - 124,000
Net income - - 356,809 - - 356,809
Change in unrealized gain
(loss) on securities
available for sale,
net of income taxes - - - - 72,995 72,995
Cash dividends - - 702,454 - - 702,454
----- -------------- -------------- ------------ ----------- ------------
Balance,
March 31, 1997 $ - $ 12,206,882 $ 2,907,162 $ 550,686 $ 35,815 $ 14,599,173
===== ============== ============== ============ ============ ============
</TABLE>
5
See accompanying notes to consolidated financial statements.
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BANK OF SOUTH CAROLINA CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1997 1996
--------------------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 356,809 $ 314,525
Adjustments to reconcile net income to net
cash provided (used) by operating activities:
Depreciation 51,549 31,537
Accretion/amortization of unearned
discounts/premiums on investments 1,333 4,928
Change in discount on notes receivable - 41,401
Amortization of organizational costs 1,861 1,862
Loss on sale of investments - 2,569
Loss on sale of OREO - 58,378
Increase in other assets 49,547 372,266
Provision for loan losses 52,500 15,000
Increase in other liabilities 70,430 84,083
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Net cash provided by operating activities 482,269 182,017
----------- -----------
Cash flows from investing activities:
Proceeds from sale/maturity of investments - 3,997,501
Purchase of investment securities 1,014,062 7,047,031
Net increase in loans 1,608,833 591,009
Proceeds from sale of OREO - 858,922
Purchase of office property and equipment 928,915 3,634
----------- -----------
Net cash used in investing activities 3,551,810 2,785,251
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Cash flows from financing activities:
Net increase decrease in deposit accounts 4,638,439 1,169,037
Net increase in short-term borrowings 795,892 574,883
Exercise of stock options 124,000 124,000
Dividends 702,454 108,206
Treasury stock - 40,659
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Net cash provided by used in financing activities 4,855,877 619,019
----------- -----------
Net increase decrease in cash and cash equivalents 1,786,336 3,222,253
Cash and cash equivalents, beginning of period 10,661,529 19,270,381
----------- -----------
Cash and cash equivalents, end of period $12,447,865 $16,048,128
=========== ===========
Supplemental disclosure of cash flow data:
Cash paid during the year for:
Interest $ 623,880 $ 564,941
Income taxes 96,090 137,862
</TABLE>
See accompanying notes to consolidated financial statements.
6
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BANK OF SOUTH CAROLINA CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1997
NOTE 1: BASIS OF PRESENTATION
Bank of South Carolina Corporation (the Company) was organized as a South
Carolina Corporation on April 17, 1995, as a one-bank holding company. The
Company, through its bank subsidiary The Bank of South Carolina (the Bank),
provides a full range of banking services including the taking of demand and
time deposits and the making of commercial, consumer and mortgage loans. The
Bank currently has three locations, one in Charleston, South Carolina, one in
Summerville, South Carolina and one in Mt. Pleasant, South Carolina. Property
has been purchased in the West Ashley area of Charleston, South Carolina for a
branch site scheduled to open in the spring of 1998. The financial statements
in this report are unaudited. All adjustments consisting of normal recurring
accruals which are, in the opinion of management, necessary for fair
presentation of the interim consolidated financial statements have been
included and fairly and accurately present the financial position as of those
dates of the Company and the Bank, respectively. The results of operations for
the period ending March 31, 1996, are not necessarily indicative of the results
which may be expected for the entire year.
NOTE 2: ORGANIZATION AND DEVELOPMENT
The organization of The Bank of South Carolina (the Bank) began on April 24,
1986, and the Bank received approval on October 22, 1986, to organize and
operate as a state-chartered bank. Common stock was issued on October 23,
1986. The Federal Deposit Insurance Corporation (FDIC) issued approval to
insure all deposits to the full amount permitted by the law upon commencement
of operations on February 26, 1987. On the effective date (12:01 a.m., April
17, 1995), shareholders of The Bank of South Carolina became shareholders of
Bank of South Carolina Corporation at which time one share of common stock in
the Bank was exchanged for two shares of common stock in the Company. All
prior period amounts have been retroactively restated to give the effect of the
two-for-one exchange.
NOTE 3: INVESTMENT SECURITIES
Investment securities to be "Held to Maturity" are carried at cost, adjusted
for amortization of premiums and accretion of discounts, computed by the
interest method. Investment securities classified as "Available for Sale" are
marked to market with unrealized gains and losses excluded from earnings and
reported as a separate component of shareholders' equity (net of estimated tax
effects). Realized gains or losses on the sale of investments are based on the
specific identification method. All the Company's securities are classified as
"Available for Sale".
The amortized cost of U.S. Treasury Securities held by the Company at March 31,
1997, and classified as "Available for Sale" is $20,174,586. The aggregate
market value of securities "Available for Sale" on the basis of market
quotations as of March 31, 1997, is $20,131,435. The unrealized gain as of
March 31, 1997, on such securities is $56,849.
The amortized cost of U.S. Treasury Securities held by the Company at December
31, 1996, and classified as "Available for Sale" was $19,059,191. The aggregate
market value of securities "Available for Sale" on the basis of market
quotations as of December 31, 1996, was $19,231,905. The unrealized gain as of
December 31, 1996, on such securities was $172,714.
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NOTE 4: SHAREHOLDERS' EQUITY
The Board of Directors approved a two for one stock split to shareholders of
record April 30, 1997, effective May 15, 1997. All share and per share data
have been retroactively restated to reflect the two for for common stock split.
A one-time cash dividend of $50 per share was approved for shareholders of
record January 31, 1997, payable February 27, 1997. A regular quarterly cash
dividend of $.10 per share was approved for shareholders of record March 31,
1997, payable May 15, 1997.
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Bank of South Carolina Corporation (the Company) is a financial institution
holding company headquartered in Charleston, South Carolina, with branch
operations in Summerville, South Carolina and Mt. Pleasant, South Carolina. It
offers a broad range of financial services through its wholly-owned subsidiary,
The Bank of South Carolina (the Bank). The Bank is a state-chartered
commercial bank which operates principally in the counties of Charleston,
Dorchester and Berkeley in South Carolina.
For the first three months of 1997, the Company reported net income of $356,809
or $.15 per share, an increase of $42,284 compared to the net income for the
first three months of 1996 of $314,525 or $.13 per share. Total assets for the
period increased $5,210,121 or 5.07% from December 31, 1996, to March 31, 1997.
COMPARISON OF THREE MONTHS ENDED MARCH 31, 1996, TO THREE MONTHS ENDED MARCH
31, 1997
The Company's results of operations depends primarily on the level of its net
interest income, its non-interest income and its operating expenses. Net
interest income depends upon the volume of and rates associated with interest
earning assets and interest bearing liabilities which results in the net
interest spread. Net income increased $42,284 or 13.4% to $356,809 for the
three months ended March 31, 1997, from $314,525 for the three months ended
March 31, 1996. The increase is primarily due to a higher loan volume during
the three months ended March 31, 1997, compared to the same period during 1996.
NET INTEREST INCOME
Net interest income increased $162,402 or 12.8% to $1,435,855 for the three
months ended March 31, 1997, from $1,273,453 for the three months ended March
31, 1996. Total interest and fee income increased $253,506 or 13.7% for the
three months ended March 31, 1997, to $2,099,563 from $1,846,057 for the three
months ended March 31, 1996. This increase in interest and fee income is
primarily a result of average total loans for the three months ended March 31,
1997, of approximately $72,834,000 compared to average total loans of
approximately $62,300,000 for the three months ended March 31, 1996. The loan
portfolio produces the highest yield of all earning assets. Investment
portfolio income increased $91,328 or 41.9% to $309,082 for the period ended
March 31, 1997, as compared to $217,754 for the three months ended March 31,
1996. This increase in revenue is primarily a result of an increase in the
average securities portfolio from approximately $13,038,000 as of March 31,
1996, to approximately $19,187,000 for the period ended as of March 31, 1997.
Other interest income decreased $81,101 or 57.9% to $58,846 for the three
months ended March 31, 1997, from $139,947 for the three months ended March 31,
1996. This decrease in revenue is attributed to the decrease in average federal
funds sold of approximately $4,661,000 for the period ended March 31, 1997, to
approximately $10,321,000 for the period ended March 31, 1996.
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Total interest expense increased $91,104 or 15.9% to $663,708 for the three
months ended March 31, 1997, from $572,604 for three months ended March 31,
1996. The increase is due to an increase in interest bearing deposits.
Interest paid on deposits of $636,379 reflected an increase of 14.1% for the
three months ended March 31, 1997, compared to $557,571 of interest paid on
deposits for the three months ended March 31, 1996. Total interest bearing
deposits averaged approximately $67,274,000 for the three months ended March
31, 1997, as compared to approximately $59,851,000 for the three months ended
March 31, 1996, or an average increase for the three months's period of
$7,423,000 or 12.4%. The average cost of interest bearing liabilities for the
three months ended March 31, 1996, was approximately 3.8% as compared to the
average cost of interest bearing liabilities of approximately 3.9% for the
three months ended March 31, 1997. Interest on short-term borrowings increased
$12,296 to $27,329 for the period ended March 31, 1997, from $15,033 for the
three months ended March 31, 1996. Short-term borrowings consisted of demand
notes to the U.S. Treasury and securities sold under agreements to repurchase
for the three months ended March 31, 1997, and for the three months ended March
31, 1996.
PROVISION FOR LOAN LOSSES
The amount charged to the provision for loan losses by the Bank is based on
management's evaluation as to the amounts required to maintain an allowance
adequate to provide for potential losses in the loan portfolio. The level of
this allowance is dependent upon the total amount of past due loans,
non-performing loans, general economic conditions and management's assessment
of potential losses based upon internal credit evaluations of the loans and
periodic reviews and assessments of credit risks associated with particular
loans. While management uses the best information available to make
evaluations, future adjustments to the allowance may be necessary if economic
conditions differ substantially from the assumptions used in making these
evaluations. The allowance for loan losses also is subject to periodic
evaluations by various regulatory authorities and may be subject to adjustment
upon their examination.
During the quarter ended March 31, 1997, $52,500 was charged to the provision
for loan losses compared to $15,000 for the quarter ended March 31, 1996. At
March 31, 1997, the allowance for loan losses was $1,093,295 or 1.49% of total
loans. This compares to an allowance of $951,200 or 1.52% as of March 31,
1996. During the quarter ended March 31, 1997, the Bank incurred one charge
off totaling $1,712 as compared to two charge offs totaling $25,478 for the
same period ended March 31, 1996. There were no loans on non-accrual status at
March 31, 1997, and one loan totaling $82,280 on non-accrual at March 31, 1996.
Loans past due over 30 days totaled $1,122,539 or 1.53% of total loans at March
31, 1997, compared to $745,269 or 1.19% of total loans at March 31, 1996.
Generally, loans are placed on non-accrual status at the earlier of when they
are 90 days past due or when the collection of interest becomes doubtful. The
allowance for loan losses at March 31, 1997, in management's opinion is
adequate for future losses that may occur in the loan portfolio.
OTHER INCOME
Other income for the three months ended March 31, 1997, increased $112,936 or
316.8% to $148,580 from $35,644 for the three months ended March 31, 1996. The
increase is due to a significant increase in mortgage loan premiums and a non-
recurring charge to other real estate owned taken in the first quarter of 1996.
GENERAL AND ADMINISTRATIVE EXPENSES
Bank overhead increased $168,193 or 21.2% to $963,126 for the three months
ended March 31, 1997, from $794,933 for the three months ended March 31, 1996.
Salaries and employee benefits increased $86,057 or 19.5% to $528,277 for the
period ended March 31, 1997, from $442,220 for the three month period ended
March 31, 1996. This increase is primarily attributed to annual merit raises
given to the
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employees and the addition of employees to staff the new Mt. Pleasant office.
Net occupancy expense increased $30,497 or 16.4% to $216,195 for three months
ended March 31, 1997, from $185,698 for the three months ended March 31, 1996.
This increase is primarily due to costs associated with the addition of a new
office, i.e., property taxes, depreciation, ground lease payments, etc. Other
operating expenses increased $52,727 or 31.8% to $218,654 for the period ending
March 31, 1997, from $165,927 for the period ending March 31, 1996.
LIQUIDITY
The Company must maintain an adequate liquidity position in order to respond to
the short-term demand for funds caused by the withdrawals from deposit
accounts, maturities of repurchase agreements, extensions of credit and for the
payment of operating expenses. Maintaining this position of adequate liquidity
is accomplished through the management of a combination of liquid assets; those
which can be converted into cash and access to additional sources of funds.
Primary liquid assets of the Company are cash and due from banks, federal funds
sold, investments available for sale and other short-term investments. The
Company's primary liquid assets accounted for 30.43% and 33.99% of average
assets at March 31, 1997, and 1996, respectively. Additional sources of funds
available through the Bank for additional liquidity needs include borrowing on
a short-term basis from the Federal Reserve System, the purchasing of federal
funds from other financial institutions and increasing deposits by raising
rates paid. The Company's core deposits consist of IPCs, NOW accounts, money
market accounts, time deposits and savings. Although such core deposits are
becoming increasingly more costly and interest sensitive for both the Company
and the industry as a whole, such core deposits continue to provide the Company
with a large and stable source of funds. Core deposits averaged 87.9% of
earning assets during the first three months of 1997 as compared to 87.2% of
earning assets for the first three months of 1996. The Company closely
monitors its reliance on certificates on deposit greater than $100,000. The
Company plans to meet its future needs through maturities of investments and
loans and through the generation of deposits. The Company's management
believes its liquidity sources are adequate to meet its operating needs and
does not know of any trends, events or uncertainties that may result in a
significant adverse effect on the Company's liquidity position. At three
months ended March 31, 1997, the Bank's liquidity ratio was 26.65% and for the
same period ended March 31, 1996, the liquidity ratio was 29.91%.
CAPITAL RESOURCES
The capital needs of the Company have been met to date through the $10,600,000
in capital raised at its initial offering, the retention of earnings less
dividends paid and the exercising of stock options in April of 1995, of
$124,000, the exercising of stock options in March of 1996, of $124,000 and the
exercising of stock options in January of 1997 of $124,000 for a total
shareholders' equity at March 31, 1997, of $14,599,173. The rate of asset
growth from the Bank's inception does not negatively impact this capital base.
Effective December 31, 1990, regulatory authorities adopted risk based capital
guidelines for financial institutions. These risk based guidelines are
designed to highlight differences in risk profiles among financial institutions
and to account for off balance sheet risk. The guidelines established requires
a risk based capital ratio of 8% for bank holding companies and banks. The
risk based capital ratio at March 31, 1997, for the Bank is 18.33% and at March
31, 1996, was 21.70%. The Company applied for another branch in its market area
in the first quarter of 1997 which should open in the spring of 1998. The
Company's management does not know of any trends, events or uncertainties that
may result in the Company's capital resources materially increasing or
decreasing.
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IMPACT OF NEW ACCOUNTING PRONOUNCEMENTS
In December 1996, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 127, "Deferral of the
Effective Date of Certain Provisions of SFAS No. 125", an amendment to SFAS No.
125 which was effective December 31, 1996. The statement delays the effective
date of certain provisions of SFAS No. 125 until December 31, 1997. The
amended provisions included those related to the transfers of financial assets
and secured borrowings. The provisions in SFAS No. 125 related to servicing
assets and liabilities are not delayed by this amendment. The adoption of this
standard did not have a material effect on the Company's financial statements.
In February 1997, the FASB issued SFAS No. 128, "Earnings per Share", which is
effective for both interim and annual periods ending after December 15, 1997.
This statement supersedes Accounting Principles Board Opinion No. 15, "Earnings
per Share". The purpose of this statement is to simplify current reporting and
make U.S. reporting comparable to international standards. The statement
requires dual presentation of basic and diluted EPS by entities with complex
capital structures (as defined by the statement). The Company anticipates that
adoption of this standard will not have a material effect on EPS.
Also, in February 1997, the FASB issued SFAS No. 129, "Disclosure of
Information about Capital Structure", which is effective for financial
statements for period ending after December 31, 1997. This statement applies
to both public and nonpublic entities. The new statement requires no change
for entities subject to the existing requirements. The Company anticipates
that adoption of this standard will not have a material effect on the Company.
EFFECT OF INFLATION AND CHANGING PRICES
The consolidated financial statements and related consolidated financial data
presented herein have been prepared in accordance with generally accepted
accounting principles (GAAP) which require the measurement of financial
position and operating results in terms of historical dollars without
considering the changes in relative purchasing power of money over time due to
inflation. The primary impact of inflation on operations of the Bank is
reflected in increased operating costs. Unlike most industrial companies,
virtually all the assets and liabilities of a financial institution are
monetary in nature. As a result, interest rates generally have a more
significant impact on a financial institution's performance than do general
levels of inflation. Interest rates do not necessarily in the same direction
or to the same extent as the prices of goods and services.
PART II
ITEM 1. LEGAL PROCEEDINGS
The Company and its subsidiary from time to time is involved as plaintiff or
defendant in various legal actions incident to its business. These actions are
not believed to be material either individually or collectively to the
consolidated financial condition of the Company or its subsidiary.
ITEM 2. CHANGES IN SECURITIES
See footnotes to consolidated balance sheets, pages 7 and 8.
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ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the Annual Meeting of Shareholders held on April 8, 1997, pursuant to the
Notice of Annual Meeting of Shareholders and Proxy Statement dated March 3,
1997, the following matters were voted upon:
1. Election of directors to serve until the next annual meeting of
shareholders in 1998.
<TABLE>
<CAPTION>
Name Votes For Votes Abstained
---- --------- ---------------
<S> <C> <C>
Nathaniel I. Ball, III 1,072,085 122
James E. Brown, DDS 1,072,085 122
William T. Cooper 1,072,085 122
C. Ronald Coward 1,072,085 122
Louis Y. Dawson, III 1,072,085 122
Leonard C. Fulghum 1,072,085 122
T. Dean Harton 1,072,085 122
William L. Hiott, Jr. 1,072,085 122
James H. Holcombe 1,072,085 122
Katherine M. Huger 1,072,085 122
John E. Huguley 1,072,085 122
Charles G. Lane 1,072,085 122
Hugh C. Lane, Jr. 1,072,085 122
Louise J. Maybank 1,072,085 122
Thomas W. Myers 1,072,085 122
Thomas C. Stevenson, III 1,072,085 122
John M. Tupper 1,072,085 122
</TABLE>
2. Approval of the appointment of KPMG Peat Marwick, LLP, as independent
auditors for the Company for the fiscal year ending December 31, 1997.
Votes for: 1,071,326; votes against: 552; abstained: 329.
No other matters were submitted to the shareholders for a vote at the annual
meeting or at any other time during the quarter.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
27 - Financial Data Schedule (for SEC use only)
12
<PAGE> 13
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BANK OF SOUTH CAROLINA CORPORATION
May 13, 1997
BY: /s/ Hugh C. Lane, Jr.
----------------------------------
Hugh C. Lane, Jr.
President
BY: /s/ William L. Hiott, Jr.
-----------------------------------
William L. Hiott, Jr.
Executive Vice President & Cashier
13
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