Core Points - Bank of South Carolina Corporation declared a quarterly cash dividend of $0.23 per share, payable on October 31, 2025, to shareholders of record on October 7, 2025, marking the 144th quarterly cash dividend [1] - The company has raised its cash dividend for the second consecutive quarter, a first in its history, with a total increase of $0.06 per share, or 35%, over the past twelve months [2] - The Bank of South Carolina has been in continuous operation since 1987 and operates multiple branches in South Carolina [2] Financial Performance - The Bank of South Carolina Corporation reported unaudited earnings of $1,956,155, translating to $0.36 basic and $0.35 diluted earnings per share for the second quarter [4]

CHARLESTON, S.C., July 22, 2025 /PRNewswire/ -- The Bank of South Carolina Corporation (OTCQX: BKSC), parent company of The Bank of South Carolina, is proud to announce the Bank has been named one of the nation's Top 100 publicly traded community banks with assets under $2 billion by American Banker magazine. Ranked 66th on the 2025 list, The Bank of South Carolina is the only South Carolina-based bank to be recognized this year. The ranking was published by American Banker on July 3, 2025, and developed by ...

Core Viewpoint - The Bank of South Carolina Corporation reported strong financial performance for the second quarter of 2025, achieving record earnings driven by improved net interest margins and robust loan demand [1][2]. Financial Performance - The unaudited net income for the quarter ended June 30, 2025, was $1,956,155, representing an increase of $202,357 or 11.54% compared to $1,753,798 for the same quarter in 2024 [1]. - For the first six months of 2025, unaudited earnings rose to $3,750,169, an increase of $620,575 or 19.83% from $3,129,594 in the same period of 2024 [1]. - The annualized return on average assets for the six months ended June 30, 2025, was 1.33%, up from 1.04% a year earlier, while the return on average equity increased to 13.73% from 13.21% [1]. Revenue and Expenses - Total interest and fee income for the quarter was $7,202,647, compared to $6,702,792 in the same quarter of 2024 [2]. - Net interest income after provision for credit losses was $5,798,353 for the quarter, reflecting a strong performance in interest income generation [2]. - Total other income was $421,104, while total other expenses amounted to $3,663,556, leading to an income before income tax expense of $2,555,901 [2]. Key Ratios and Metrics - The net interest margin for the quarter was 4.33%, marking the second consecutive quarter above 4% [2]. - The efficiency ratio improved to 57.97%, indicating better cost management [2]. - The percentage of loans past due over 30 days was low at 0.29%, demonstrating strong asset quality [2]. Company Overview - The Bank of South Carolina Corporation is a state-chartered financial institution operating since 1987, with multiple locations in South Carolina [3]. - The company trades its common stock on the OTCQX Best Market under the symbol "BKSC" [3].

United States Securities and Exchange Commission Washington, D.C. 20549 Form 10-Q (Mark One) ☒ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended June 30, 2023 ☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from _____ to _____ Commission file number: 000-27702 Bank of South Carolina Corporation (Exact name of registrant as specified in its charter) South Carolina 57-10213 ...

Part I. Financial Information Presents the Company's financial statements and management's discussion and analysis for the reporting period [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Unaudited consolidated financial statements for Q1 2023 and 2022, covering balance sheets, income, equity, cash flows, and detailed accounting notes [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets%20%E2%80%93%20March%2031%2C%202023%20and%20December%2031%2C%202022) Presents the consolidated balance sheets for March 31, 2023, and December 31, 2022, detailing assets, liabilities, and equity Key Balance Sheet Metrics | Metric | March 31, 2023 | December 31, 2022 | Change ($) | Change (%) | | :-------------------------------- | :------------- | :---------------- | :--------- | :--------- | | Total assets | $647,361,629 | $653,345,609 | $(5,983,980) | -0.92% | | Total liabilities | $603,853,811 | $614,534,222 | $(10,680,411) | -1.74% | | Total shareholders' equity | $43,507,818 | $38,811,387 | $4,696,431 | 12.08% | | Total deposits | $587,592,459 | $598,670,258 | $(11,077,799) | -1.85% | | Time deposits $250,000 and over | $52,635,553 | $5,303,509 | $47,332,044 | 892.46% | - Total shareholders' equity increased by **$4.70 million** (**12.08%**) primarily due to a decrease in accumulated other comprehensive loss[8](index=8&type=chunk) [Consolidated Statements of Income](index=5&type=section&id=Consolidated%20Statements%20of%20Income%20%E2%80%93%20Three%20months%20ended%20March%2031%2C%202023%20and%202022) Details the consolidated income statements for Q1 2023 and 2022, highlighting net income, interest income, and expenses Key Income Statement Metrics | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | Change ($) | Change (%) | | :--------------------------------- | :-------------------------------- | :-------------------------------- | :--------- | :--------- | | Net income | $1,588,779 | $1,464,106 | $124,673 | 8.52% | | Net interest income | $4,700,733 | $4,218,163 | $482,570 | 11.44% | | Interest expense (Deposits) | $931,101 | $36,797 | $894,304 | 2430.88% | | Basic income per common share | $0.29 | $0.26 | $0.03 | 11.54% | | Diluted income per common share | $0.28 | $0.26 | $0.02 | 7.69% | | Total other income | $449,201 | $634,554 | $(185,353) | -29.21% | - Total other income decreased primarily due to lower mortgage banking income and no gain on sales of securities in Q1 2023[10](index=10&type=chunk) [Consolidated Statements of Comprehensive Income (Loss)](index=6&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)%20%E2%80%93%20Three%20months%20ended%20March%2031%2C%202023%20and%202022) Outlines comprehensive income and loss for Q1 2023 and 2022, including net income and other comprehensive income Key Comprehensive Income Metrics | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | Change ($) | | :--------------------------------- | :-------------------------------- | :-------------------------------- | :--------- | | Net income | $1,588,779 | $1,464,106 | $124,673 | | Other comprehensive income (loss) after tax | $4,021,406 | $(9,649,453) | $13,670,859 | | Total comprehensive income (loss) | $5,610,185 | $(8,185,347) | $13,795,532 | - The significant improvement in total comprehensive income (loss) was driven by an unrealized gain on securities of **$3.93 million** in Q1 2023, contrasting with a loss of **$(12.15) million** in Q1 2022[11](index=11&type=chunk) [Consolidated Statements of Shareholders' Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Shareholders'%20Equity%20%E2%80%93%20Three%20months%20ended%20March%2031%2C%202023%20and%202022) Presents changes in shareholders' equity for Q1 2023 and 2022, reflecting net income, comprehensive income, and dividends Key Shareholders' Equity Metrics | Metric | December 31, 2022 | March 31, 2023 | Change ($) | Change (%) | | :--------------------------------- | :---------------- | :------------- | :--------- | :--------- | | Total Shareholders' Equity | $38,811,387 | $43,507,818 | $4,696,431 | 12.08% | | Net income | — | $1,588,779 | $1,588,779 | N/A | | Other comprehensive income | — | $4,021,406 | $4,021,406 | N/A | | Cash dividends | $(943,901) | $(943,901) | $0 | 0.00% | | Accumulated other comprehensive loss | $(20,402,481) | $(16,381,075) | $4,021,406 | -19.71% | - The increase in total shareholders' equity was primarily due to net income and other comprehensive income, partially offset by cash dividends[13](index=13&type=chunk) [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20%E2%80%93%20Three%20months%20ended%20March%2031%2C%202023%20and%202022) Details cash flows from operating, investing, and financing activities for Q1 2023 and 2022, showing changes in cash Key Cash Flow Metrics | Cash Flow Activity | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | Change ($) | | :--------------------------------- | :-------------------------------- | :-------------------------------- | :--------- | | Net cash provided by operating activities | $1,730,490 | $1,704,090 | $26,400 | | Net cash provided by (used in) investing activities | $4,504,494 | $(66,229,256) | $70,733,750 | | Net cash used in financing activities | $(12,021,700) | $(6,220,493) | $(5,801,207) | | Net decrease in cash and cash equivalents | $(5,786,716) | $(70,745,659) | $64,958,943 | | Cash and cash equivalents at end of period | $21,984,983 | $69,366,329 | $(47,381,346) | - Net cash provided by investing activities significantly improved due to no purchase of investment securities in Q1 2023, compared to substantial purchases in Q1 2022[16](index=16&type=chunk) - Net cash used in financing activities increased due to a larger net decrease in deposit accounts[16](index=16&type=chunk) [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Provides detailed disclosures and explanations for the consolidated financial statements, covering accounting policies and specific items [1. Nature of Business and Basis of Presentation](index=9&type=section&id=1.%20NATURE%20OF%20BUSINESS%20AND%20BASIS%20OF%20PRESENTATION) Describes the Company's business, subsidiary, and basis of financial statement presentation, including recent accounting changes - The Bank of South Carolina was established in 1986 and became a wholly-owned subsidiary of Bank of South Carolina Corporation in 1995[18](index=18&type=chunk) - The Company adopted ASU 2016-13 (CECL methodology) on January 1, 2023, leading to a **$0.60 million** increase in the allowance for unfunded commitments and a **$0.60 million** decrease in the allowance for credit losses[27](index=27&type=chunk) - Under CECL, credit losses for available-for-sale securities and loans are recognized earlier, with specific methodologies for each asset type[26](index=26&type=chunk)[29](index=29&type=chunk)[32](index=32&type=chunk) [2. Investment Securities](index=12&type=section&id=Note%202%3A%20Investment%20Securities) Provides details on the Company's investment securities portfolio, including amortized cost, fair value, and unrealized losses Investment Securities Summary | Metric | March 31, 2023 | December 31, 2022 | | :--------------------------------- | :------------- | :---------------- | | Amortized Cost | $289,337,630 | $296,998,150 | | Estimated Fair Value | $267,439,924 | $271,172,226 | | Net Unrealized Loss | $(21,897,706) | $(25,825,924) | - The Company believes all unrealized losses are temporary and due to interest rate changes, with no intent to sell before recovery of amortized cost[50](index=50&type=chunk) - Securities pledged to secure deposits totaled **$30.6 million**, and an additional **$25.0 million** were pledged for the Federal Reserve's Bank Term Funding Program at March 31, 2023[48](index=48&type=chunk) [3. Loans and Allowance for Credit Losses](index=14&type=section&id=Note%203%3A%20Loans%20and%20Allowance%20for%20Credit%20Losses) Details the loan portfolio composition, changes in the allowance for credit losses, and nonaccrual loan balances Loans and Allowance for Credit Losses Summary | Metric | March 31, 2023 | December 31, 2022 | Change ($) | Change (%) | | :--------------------------------- | :------------- | :---------------- | :--------- | :--------- | | Loans, net | $330,100,952 | $326,690,561 | $3,410,391 | 1.04% | | Allowance for credit losses | $3,688,503 | $4,291,221 | $(602,718) | -14.04% | | Nonaccrual loans | $627,927 | $631,453 | $(3,526) | -0.56% | - The adoption of CECL on January 1, 2023, resulted in an initial adjustment of **$(0.60) million** to the allowance for credit losses[67](index=67&type=chunk) - Net charge-offs for the three months ended March 31, 2023, were **$47,718**[67](index=67&type=chunk) [4. Leases](index=23&type=section&id=Note%204%3A%20Leases) Presents information on operating lease assets and liabilities, including weighted average lease terms and borrowing rates Lease Metrics | Metric | March 31, 2023 | December 31, 2022 | | :--------------------------------- | :------------- | :---------------- | | Operating right of use (ROU) assets | $13,275,236 | $13,433,692 | | Operating lease liabilities | $13,275,236 | $13,433,692 | | Weighted average remaining lease term | 15.3 years | N/A | | Weighted average incremental borrowing rate | 4.18% | N/A | - Total lease expense for Q1 2023 was **$0.30 million**, a slight increase from **$0.30 million** in Q1 2022[81](index=81&type=chunk) [5. Disclosures Regarding Fair Value of Financial Statements](index=23&type=section&id=Note%205%3A%20Disclosures%20Regarding%20Fair%20Value%20of%20Financial%20Statements) Explains the fair value hierarchy and provides fair value measurements for financial instruments, including investment securities and loans - Fair value measurements are categorized into a three-level hierarchy based on input observability: Level 1 (quoted prices), Level 2 (observable inputs), and Level 3 (unobservable inputs)[85](index=85&type=chunk) Fair Value of Financial Instruments | Asset Type | Fair Value (March 31, 2023) | Level 1 | Level 2 | Level 3 | | :--------------------------------- | :-------------------------- | :---------- | :---------- | :---------- | | Investment securities available for sale | $267,439,924 | $170,236,530 | $74,654,094 | $22,549,300 | | Individually assessed loans | $1,438,744 | — | — | $1,438,744 | | Mortgage loans to be sold | $1,278,158 | — | $1,278,158 | — | - The fair value of loans, net, was estimated at **$305.60 million** at March 31, 2023, compared to a carrying value of **$330.10 million**, with the fair value primarily derived from Level 3 inputs[110](index=110&type=chunk) [6. Income Per Common Share](index=29&type=section&id=Note%206%3A%20Income%20Per%20Common%20Share) Details basic and diluted income per common share calculations and weighted average shares outstanding Income Per Common Share Metrics | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--------------------------------- | :-------------------------------- | :-------------------------------- | | Basic income per common share | $0.29 | $0.26 | | Diluted income per common share | $0.28 | $0.26 | | Weighted average shares outstanding (basic) | 5,552,351 | 5,544,546 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's perspective on financial condition and results, including balance sheet analysis and performance comparison [Cautionary Statement Regarding Forward-Looking Statements](index=30&type=section&id=CAUTIONARY%20STATEMENT%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) Highlights that the report contains forward-looking statements subject to various risks and uncertainties, with no update obligation - The report contains forward-looking statements subject to various risks and uncertainties, including economic, monetary policy, interest rate, and regulatory changes[112](index=112&type=chunk)[114](index=114&type=chunk) - The Company disclaims any obligation to update forward-looking statements[113](index=113&type=chunk) [Overview](index=31&type=section&id=Overview) Provides a general overview of Bank of South Carolina Corporation's business, assets, and primary income sources - Bank of South Carolina Corporation, headquartered in Charleston, SC, had **$647.4 million** in assets as of March 31, 2023, offering financial services primarily in Charleston, Dorchester, and Berkeley counties[115](index=115&type=chunk) - The Company's main income sources are interest on loans and investments, funded by deposits, with net interest income and spread being key performance indicators[116](index=116&type=chunk) [Critical Accounting Policies](index=32&type=section&id=Critical%20Accounting%20Policies) Discusses critical accounting policies involving significant judgments and assumptions, noting the adoption of the CECL methodology - Critical accounting policies involve significant judgments and assumptions impacting asset and liability carrying values[119](index=119&type=chunk) - Except for the adoption of ASC 326 (CECL) on January 1, 2023, critical accounting policies remain unchanged from the 2022 Annual Report on Form 10-K[119](index=119&type=chunk) [Balance Sheet Analysis](index=32&type=section&id=Balance%20Sheet) Analyzes key balance sheet components: cash, investments, loans, nonperforming assets, allowance for credit losses, and deposits [Cash and Cash Equivalents](index=32&type=section&id=Cash%20and%20Cash%20Equivalents) Examines changes in cash and cash equivalents, attributing decreases to deposit outflows and increases to investment maturities Cash and Cash Equivalents Summary | Metric | March 31, 2023 | December 31, 2022 | Change ($) | Change (%) | | :--------------------------------- | :------------- | :---------------- | :--------- | :--------- | | Total cash and cash equivalents | $7,099,250 | $14,772,564 | $(7,673,314) | -51.94% | - The decrease was primarily due to a net decrease in deposit accounts, partially offset by net proceeds from investment securities maturities and cash generated from operations[120](index=120&type=chunk) [Investment Securities Available for Sale](index=32&type=section&id=Investment%20Securities%20Available%20for%20Sale) Reviews the investment securities portfolio, focusing on fair market value, unrealized losses, and portfolio objectives Investment Securities Available for Sale Summary | Metric | March 31, 2023 | December 31, 2022 | | :--------------------------------- | :------------- | :---------------- | | Fair market value | $267.4 million | $271.2 million | | Net unrealized loss | $(21.9) million | $(25.8) million | | % of total assets | 41.35% | 41.5% | | Average yield | 1.15% | 1.18% | - The investment portfolio's primary objective is to maintain high quality, highly liquid investments yielding competitive returns, while managing interest rate and prepayment risk[121](index=121&type=chunk)[122](index=122&type=chunk) [Loans](index=32&type=section&id=Loans) Analyzes the loan portfolio composition and growth, emphasizing lending activities to small and middle market businesses Loan Portfolio Composition | Loan Type | March 31, 2023 (Amount) | March 31, 2023 (Percent) | December 31, 2022 (Amount) | December 31, 2022 (Percent) | | :--------------------------------- | :------------------------ | :----------------------- | :------------------------- | :------------------------ | | Commercial | $46,212,003 | 13.84% | $45,072,059 | 13.62% | | Commercial Real Estate Construction | $20,146,368 | 6.04% | $17,524,260 | 5.29% | | Commercial Real Estate Other | $174,860,808 | 52.39% | $172,897,387 | 52.24% | | Consumer Real Estate | $88,962,556 | 26.65% | $91,636,538 | 27.69% | | Consumer Other | $3,607,720 | 1.08% | $3,851,538 | 1.16% | | Total loans, net | $330,100,952 | N/A | $326,690,561 | N/A | - Net loans increased by **$3.41 million** (**1.04%**) to **$330.10 million** at March 31, 2023, primarily due to growth in Commercial and Commercial Real Estate loans[125](index=125&type=chunk) - The Bank focuses lending activities on small and middle market businesses, professionals, and individuals within its geographic markets[124](index=124&type=chunk) [Nonperforming Assets](index=34&type=section&id=Nonperforming%20Assets) Details nonperforming assets, specifically nonaccruing loans, and confirms the absence of 90-day past due accruing loans Nonperforming Assets Summary | Asset Type | March 31, 2023 | December 31, 2022 | | :--------------------------------- | :------------- | :---------------- | | Total nonaccruing loans | $627,927 | $631,453 | | Total nonperforming assets | $627,927 | $631,453 | - All nonaccruing loans were classified under Commercial Real Estate Other[130](index=130&type=chunk) - There were no loans 90 days past due and still accruing interest as of March 31, 2023[129](index=129&type=chunk) [Allowance for Credit Losses](index=34&type=section&id=Allowance%20for%20Credit%20Losses) Discusses the allowance for credit losses, its adequacy, and the impact of the CECL adoption on its balance Allowance for Credit Losses Summary | Metric | March 31, 2023 | December 31, 2022 | | :--------------------------------- | :------------- | :---------------- | | Allowance for credit losses | $3.7 million | $4.3 million | | % of outstanding loans | 1.11% | 1.30% | | % of nonperforming loans | 587.41% | 679.58% | | Net charge-offs (Q1 2023) | $47,718 | N/A | - Management believes the allowance for credit losses at March 31, 2023, is adequate based on coverage of nonperforming loans and portfolio analysis[131](index=131&type=chunk) [Deposits](index=34&type=section&id=Deposits) Examines changes in deposit balances by type, noting decreases in demand deposits and increases in brokered time deposits Deposit Composition | Deposit Type | March 31, 2023 (Amount) | March 31, 2023 (Percent) | December 31, 2022 (Amount) | December 31, 2022 (Percent) | | :--------------------------------- | :------------------------ | :----------------------- | :------------------------- | :------------------------ | | Non-interest bearing demand | $211,238,078 | 35.95% | $223,117,903 | 37.26% | | Interest bearing demand | $149,605,230 | 25.46% | $195,143,514 | 32.60% | | Money market accounts | $102,387,646 | 17.42% | $100,014,125 | 16.71% | | Time deposits $250,000 and over | $52,635,553 | 8.96% | $5,303,509 | 0.89% | | Total deposits | $587,592,459 | 100.00% | $598,670,258 | 100.00% | - Total deposits decreased by **$11.1 million** (**1.85%**) due to a net decrease in demand deposit accounts, partially offset by a significant increase in brokered time deposits (**$47.8 million**)[136](index=136&type=chunk) - Total assets decreased by **$5.98 million** (**0.92%**) to **$647.36 million** at March 31, 2023, from **$653.35 million** at December 31, 2022[8](index=8&type=chunk) - Net loans increased by **$3.41 million** (**1.04%**) to **$330.10 million** at March 31, 2023, driven by growth in Commercial and Commercial Real Estate loans[125](index=125&type=chunk) - Total deposits decreased by **$11.08 million** (**1.85%**) to **$587.59 million** at March 31, 2023, primarily due to decreases in demand deposits, partially offset by a significant increase in time deposits[136](index=136&type=chunk) [Comparison of Q1 2023 to Q1 2022 Financial Performance](index=35&type=section&id=Comparison%20of%20Three%20Months%20Ended%20March%2031%2C%202023%20to%20Three%20Months%20Ended%20March%2031%2C%202022) Compares financial performance for Q1 2023 and Q1 2022, analyzing net interest income, non-interest income, and expenses [Net Interest Income](index=35&type=section&id=Net%20Interest%20Income) Analyzes changes in net interest income, highlighting the impact of rising interest rates on loan yields and deposits Net Interest Income Performance | Metric | Q1 2023 | Q1 2022 | Change ($) | Change (%) | | :--------------------------------- | :------ | :------ | :--------- | :--------- | | Net interest income | $5.6 million | $4.2 million | $1.4 million | 32.36% | | Yield on average loans | 5.86% | 4.99% | 0.87% | 17.43% | | Interest income on loans | $4.7 million | $3.6 million | $1.1 million | 30.56% | | Average balance of interest-bearing deposits at Federal Reserve | $10.0 million | $70.9 million | $(60.9) million | -85.87% | | Yield on Federal Reserve deposits | 4.53% | 0.20% | 4.33% | 2165.00% | - The increase in net interest income was driven by higher yields on average loans due to rising interest rates on variable-rate loans and new originations[139](index=139&type=chunk) [Provision for Credit Losses](index=35&type=section&id=Provision%20for%20Credit%20Losses) Discusses the provision for credit losses, noting the impact of the CECL methodology on the allowance for credit losses Provision for Credit Losses Summary | Metric | Q1 2023 | Q1 2022 | | :--------------------------------- | :------ | :------ | | Provision for credit losses | $45,000 | $(75,000) | - The Company recorded a **$45,000** increase to the allowance for credit losses in Q1 2023, compared to a **$(75,000)** reduction in the prior year, reflecting analysis under the new CECL methodology[141](index=141&type=chunk) [Non-Interest Income](index=35&type=section&id=Non-Interest%20Income) Examines the decrease in non-interest income, primarily due to lower mortgage banking income and no securities sales gains Non-Interest Income Performance | Metric | Q1 2023 | Q1 2022 | Change ($) | Change (%) | | :--------------------------------- | :------ | :------ | :--------- | :--------- | | Total other income | $0.4 million | $0.6 million | $(0.2) million | -29.21% | | Mortgage banking income | $112,160 | $258,896 | $(146,736) | -56.68% | | Gain on sales of securities | $0 | $61,780 | $(61,780) | -100.00% | - The decrease in non-interest income was primarily due to lower mortgage banking income and the absence of gains on sales of investment securities[142](index=142&type=chunk) [Non-Interest Expense](index=35&type=section&id=Non-Interest%20Expense) Analyzes the increase in non-interest expense, driven by higher salaries, employee benefits, and net occupancy costs Non-Interest Expense Performance | Metric | Q1 2023 | Q1 2022 | Change ($) | Change (%) | | :--------------------------------- | :------ | :------ | :--------- | :--------- | | Total other expense | $3.2 million | $3.0 million | $0.2 million | 7.75% | | Salaries and employee benefits | $1,966,523 | $1,812,155 | $154,368 | 8.52% | | Net occupancy expense | $654,062 | $620,942 | $33,120 | 5.33% | - The increase in non-interest expense was primarily driven by higher salaries and employee benefits and net occupancy expense, with plans to open a new branch[143](index=143&type=chunk) [Income Tax Expense](index=36&type=section&id=Income%20Tax%20Expense) Discusses income tax expense and the effective tax rate, noting the impact of prior year tax provision calculations Income Tax Expense Summary | Metric | Q1 2023 | Q1 2022 | Change ($) | Change (%) | | :--------------------------------- | :------ | :------ | :--------- | :--------- | | Income tax expense | $0.3 million | $0.4 million | $(0.1) million | -22.50% | | Effective tax rate | 14.33% | 23.39% | -9.06% | -38.73% | - The lower effective tax rate in Q1 2023 was a result of the prior year's tax provision calculation[144](index=144&type=chunk) Overall Financial Performance | Metric | Q1 2023 | Q1 2022 | Change ($) | Change (%) | | :--------------------------------- | :------ | :------ | :--------- | :--------- | | Net income | $1.6 million | $1.5 million | $0.1 million | 8.52% | | Basic EPS | $0.29 | $0.26 | $0.03 | 11.54% | | Diluted EPS | $0.28 | $0.26 | $0.02 | 7.69% | | Annualized ROAA | 1.00% | 0.89% | 0.11% | 12.36% | | Annualized ROAE | 15.73% | 11.40% | 4.33% | 37.98% | [Off-Balance Sheet Arrangements](index=36&type=section&id=Off-Balance%20Sheet%20Arrangements) Details off-balance sheet arrangements, including credit commitments, standby letters of credit, and forward sales commitments Off-Balance Sheet Arrangements Summary | Arrangement | March 31, 2023 | December 31, 2022 | | :--------------------------------- | :------------- | :---------------- | | Commitments to extend credit | $141.1 million | $145.4 million | | Standby letters of credit (max potential payment) | $1.7 million | $2.5 million | | Forward sales commitments on mortgage loans | $1.3 million | $0.9 million | | Unpaid principal balance of loans sold with recourse | $8.5 million | N/A | - The Company had no repurchases of loans sold with recourse during the three months ended March 31, 2023[150](index=150&type=chunk) [Liquidity](index=37&type=section&id=Liquidity) Discusses the Company's liquidity management, primary liquid assets, and available credit lines, including the BTFP Liquidity Metrics | Metric | March 31, 2023 | December 31, 2022 | | :--------------------------------- | :------------- | :---------------- | | Primary liquid assets (% of total assets) | 44.95% | 45.89% | | Unused short-term lines of credit | ~$41.0 million | N/A | | Federal Reserve Discount Window borrowing capacity | Up to $107.9 million | N/A | | Bank Term Funding Program credit line | $25.0 million | N/A | | Liquidity ratio | 57.82% | 48.09% | - The Company manages liquidity to meet operational requirements, deposit outflows, and loan demand, utilizing customer deposits, loan payments, and securities sales as primary sources[152](index=152&type=chunk) - The Bank established a **$25.0 million** credit line under the Federal Reserve's Bank Term Funding Program in Q1 2023, with no borrowings as of March 31, 2023[154](index=154&type=chunk) [Capital Resources](index=37&type=section&id=Capital%20Resources) Reviews the Company's capital resources, including total shareholders' equity and compliance with 'well capitalized' requirements Capital Resources Summary | Metric | March 31, 2023 | | :--------------------------------- | :------------- | | Total shareholders' equity | $43.5 million | | Community Bank Leverage Ratio (CBLR) | 9.42% | - Both the Company and the Bank were categorized as 'well capitalized' as of March 31, 2023, meeting all applicable capital adequacy requirements[159](index=159&type=chunk) - The Bank adopted the CBLR framework as of September 30, 2020, which simplifies capital adequacy measurement for qualifying community banking organizations[159](index=159&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=26&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, the Company is exempt from providing quantitative and qualitative disclosures about market risk - Smaller reporting companies are exempt from providing disclosures about market risk[162](index=162&type=chunk)[168](index=168&type=chunk) [Item 4. Controls and Procedures](index=26&type=section&id=Item%204.%20Controls%20and%20Procedures) Management evaluated disclosure controls and procedures, concluding they were effective, with no material internal control changes - The Company's disclosure controls and procedures were evaluated and deemed effective as of March 31, 2023[163](index=163&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended March 31, 2023[164](index=164&type=chunk) - The Audit and Compliance Committee, composed of independent Directors, periodically reviews audit, financial, and related matters[165](index=165&type=chunk) Part II. Other Information Presents other required information, including legal proceedings, risk factors, equity sales, defaults, and exhibits [Item 1. Legal Proceedings](index=26&type=section&id=Item%201.%20Legal%20Proceedings) The Company reports no material legal proceedings pending other than routine litigation incidental to its business - No material legal proceedings are pending, only routine litigation incidental to the Company's business[167](index=167&type=chunk) [Item 1A. Risk Factors](index=26&type=section&id=Item%201A.%20Risk%20Factors) As a smaller reporting company, the Company is exempt from providing specific risk factor disclosures in this quarterly report - Smaller reporting companies are exempt from providing risk factor disclosures[168](index=168&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=26&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The Company reports no unregistered sales of equity securities or use of proceeds for the period - No unregistered sales of equity securities or use of proceeds occurred during the period[169](index=169&type=chunk) [Item 3. Defaults Upon Senior Securities](index=26&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The Company reports no defaults upon senior securities for the period - No defaults upon senior securities were reported[170](index=170&type=chunk) [Item 4. Mine Safety Disclosure](index=26&type=section&id=Item%204.%20Mine%20Safety%20Disclosure) The Company reports no mine safety disclosures for the period - No mine safety disclosures were reported[171](index=171&type=chunk) [Item 5. Other Information](index=26&type=section&id=Item%205.%20Other%20Information) The Company reports no other information for the period - No other information was reported[171](index=171&type=chunk) [Item 6. Exhibits](index=26&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including CEO/CFO certifications and XBRL taxonomy documents - Exhibits include certifications (31.1, 31.2, 32.1, 32.2) and XBRL Taxonomy Extension documents[172](index=172&type=chunk) - Certifications pursuant to 18 U.S.C. Section 1350 are furnished, not filed, and not incorporated by reference[173](index=173&type=chunk) - XBRL-related information is deemed not filed for liability purposes under specific sections of the Securities Act and Exchange Act[173](index=173&type=chunk) [Signatures](index=27&type=section&id=Signatures) The report is duly signed by the President/CEO and CFO of Bank of South Carolina Corporation on May 11, 2023 - The report was signed by Fleetwood S. Hassell (President/CEO) and Eugene H. Walpole, IV (CFO/EVP) on May 11, 2023[176](index=176&type=chunk) [Certifications](index=28&type=section&id=Certifications) This section refers to the certifications required by the Securities Exchange Act of 1934, provided as exhibits - Certifications are required by the Securities Exchange Act of 1934[6](index=6&type=chunk) - The actual certifications are provided as exhibits 31.1, 31.2, 32.1, 32.2[172](index=172&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to _________ Commission file number: 000-27702 (Address of principal executive offices) (Zip Code) Issuer's telephone number: (843) 724-1500 Securities registered pu ...