BANK SOUTH CAROL(BKSC) - 2022 Q4 - Annual Report

Financial Performance - The Company reported net income of $6.7 million for the year ended December 31, 2022, compared to $6.7 million in 2021, indicating a stable performance year-over-year[89]. - Net income for the year ended December 31, 2022, decreased by $0.1 million or 1.3% to $6.66 million, with basic and diluted income per share of $1.20 and $1.18, respectively[101]. - Net income for 2022 was $6,655,140, a slight decrease of 1.32% from $6,744,865 in 2021[244]. - Total comprehensive loss for 2022 was $(11,614,371), compared to a gain of $2,942,029 in 2021, indicating a significant decline[244]. - Other comprehensive loss after tax for 2022 was $(18,269,511), compared to $(3,802,836) in 2021, showing a substantial increase in losses[244]. Assets and Liabilities - Total assets as of December 31, 2022, were $653.3 million, a decrease from $679.2 million in 2021, reflecting a 3.8% decline[89]. - Total average assets increased to $656.83 billion in 2022 from $589.38 billion in 2021, representing an increase of approximately 11.4%[134]. - Total contractual cash obligations amounted to $34.79 million, with $16.01 million due within one year[131]. - The liquidity ratio decreased to 48.09% in 2022 from 56.43% in 2021, indicating a reduction in liquidity management effectiveness[132]. - The company maintained a strong focus on liquidity management, with primary liquid assets accounting for 45.89% of total assets as of December 31, 2022[130]. Loans and Allowance for Loan Losses - Total loans increased to $331.8 million in 2022 from $309.4 million in 2021, representing a growth of 7.1%[89]. - The allowance for loan losses as a percentage of total loans was 1.30% in 2022, compared to 1.43% in 2021, suggesting improved asset quality[89]. - The allowance for loan losses decreased to $4.3 million or 1.30% of total loans as of December 31, 2022, following a reduction of $75,000 compared to the previous year[104]. - The allowance for loan losses recorded a reduction of $0.1 million for the year ended December 31, 2022, compared to a provision for loan loss of $0.1 million for the year ended December 31, 2021[185]. - Nonaccrual loans decreased to $631,453 in 2022 from $814,614 in 2021, representing a decline of approximately 22.4%[157]. Income and Expenses - Net interest income increased by $1.5 million or 8.74% to $18.9 million for the year ended December 31, 2022, driven by higher average earning assets and increased asset yields[102]. - Other income decreased by $1.8 million or 46.62% to $2.1 million for the year ended December 31, 2022, largely due to lower mortgage banking income[105]. - Total other income decreased to $2,064,862 in 2022 from $3,868,231 in 2021, a decline of 46.55%[241]. - Salaries and employee benefits increased to $7,547,306 in 2022, up from $7,437,787 in 2021, reflecting a rise of 1.48%[241]. - The provision for loan losses decreased significantly to $75,000 in 2022 from $120,000 in 2021, indicating improved credit quality[241]. Deposits - The Company maintained total deposits of $598.7 million in 2022, a decrease from $609.2 million in 2021, which is a decline of 1.9%[89]. - Total deposits decreased by $10.5 million or 1.73% to $598.7 million as of December 31, 2022, from $609.2 million in 2021[202]. - Non-interest-bearing demand deposits decreased by $32.7 million to $223.1 million as of December 31, 2022[202]. - Certificates of Deposit of $100,000 and over decreased by $4.3 million or 28.3% to $10.9 million as of December 31, 2022, from $15.2 million in 2021[200]. Investment Securities - Investment securities available for sale rose to $271.2 million in 2022, up from $212.3 million in 2021, marking a significant increase of 27.7%[89]. - The total amortized cost of investment securities as of December 31, 2022, was $296,998,000, with an estimated fair value of $271,172,000[145]. - The weighted average yield on investment securities was 1.17% as of December 31, 2022, down from 1.34% in 2021[144]. - The company had unrealized losses of $12.1 million on U.S. Treasury Notes and $3.4 million on Municipal Securities as of December 31, 2022[145]. Shareholder Equity - Total shareholders' equity decreased to $38.8 million as of December 31, 2022, down from $53.9 million in 2021, reflecting a decline of approximately 28%[238]. - The Company’s CBLR (Community Bank Leverage Ratio) was 9.03% as of December 31, 2022, categorizing the Company as "well capitalized"[222]. Miscellaneous - The Company processed approximately $0.7 million in principal deferments to 84 customers during 2020, representing 0.24% of the total loan portfolio as of December 31, 2020, with no deferments processed in 2021 and 2022[98]. - The company focuses its lending activities on small and middle-market businesses, professionals, and individuals within its geographic market[149]. - The Company recognizes operating lease ROU assets and lease liabilities at the commencement of the lease based on the present value of lease payments over the lease term[280]. - Currently, the Company does not have any finance leases[278].