Business Description
The Bank of South Carolina was organized on October 22, 1986 and opened for
business as a state-chartered financial institution on February 26, 1987, in
Charleston, South Carolina. The Bank was reorganized into a wholly-owned subsidiary
of Bank of South Carolina Corporation (the “Company”), effective
April 17, 1995. At the time of the reorganization, each outstanding share of
the Bank was exchanged for two shares of Bank of South Carolina Corporation
Stock.
The primary economic drivers of our market area are tourism, manufacturing
and medical services. In addition, we have one of the busiest container ports
in the United States as well as a Boeing plant in North Charleston, SC. In October
2009, Boeing selected a site in North Charleston SC, for a 787 Dreamliner final
assembly and delivery line. Boeing South Carolina has added the IT Centers of
Excellence, Engineering Design Center, Boeing Research & Technology Center
and Propulsion South Carolina to its North Charleston campus and will be adding
a painting facility in 2016. Future development in our market area includes
both a Volvo and Mercedes plant.
In the underwriting of commercial real estate loans, we generally lend up to
the lesser of 80% of the appraised value or the purchase price of the property.
We base our decision to lend primarily on the economic viability of the property
and the creditworthiness of the borrower. In evaluating a proposed commercial
real estate loan, we emphasize the ratio of the property’s projected net
cash flow to the loan’s debt service requirement computed after deduction
for an appropriate vacancy factor and reasonable expenses. We typically require
title insurance, earthquake insurance, casualty insurance, and, if appropriate,
flood insurance, in order to protect our security interest in the underlying
property.
Commercial credit decisions are based upon our credit assessment of each applicant.
We evaluate the applicant’s ability to repay in accordance with the proposed
terms of the loan and we assess the risks involved. In addition to evaluating
the applicant’s financial statements, we consider the adequacy of the
primary and secondary sources of repayment for the loan. Credit agency reports
of the applicant’s personal credit history supplement our analysis of
the applicant’s creditworthiness. In addition, collateral supporting a
secured transaction is analyzed to determine its marketability. Commercial business
loans generally have higher interest rates than residential loans of similar
duration because they have a higher risk of default with repayment generally
depending on the successful operation of the borrower’s business and the
sufficiency of any collateral.
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