Name: BANK OF SOUTH CAROLINA CORP Q3 2022 Earnings Call
Start: 2022-10-13T00:00:00.000Z

Executive Summary

Q3 2022 net income was $1.84M and EPS was $0.33, up 6.56% year over year; sequentially stronger than Q2’s $1.54M net income and $0.27 diluted EPS as higher rates improved margins despite weaker mortgage fee income .
Year-to-date profitability remained solid with annualized ROA/ROE of 0.98%/14.11% vs 1.23%/12.64% in the prior year-to-date period; management emphasized strong capital position and reserves entering Q4 .
The Board declared a $0.17 per share quarterly dividend payable October 31, 2022, reinforcing capital-return consistency amid rate-driven margin tailwinds .
No formal financial guidance or Q3 earnings call transcript was found; management commentary suggests continued focus on asset quality, liquidity deployment, and offsetting mortgage origination softness with higher loan yields .

What Went Well and What Went Wrong

Fed rate increases benefitted margins, helping offset mortgage origination declines: “Increased interest rates from recent Federal Reserve actions have helped offset a decline in the contribution from mortgage originations” .
Balance sheet strength and reserves: “We are adequately reserved for credit losses and remain well capitalized as we enter the fourth quarter” .
Operational execution and margin improvement: “Margins are improving, and we are optimistic that higher loan interest income will offset any declines in mortgage origination volume. We remain ahead of our profit plan for the first six months…” .

Mortgage activity and PPP fee headwinds pressured earnings earlier in the year: “Less fee income from mortgage activity, diminishing fees from the PPP program, and razor thin margins have adversely impacted our first quarter bottom line” .
Ongoing challenge deploying excess liquidity into higher-yielding assets, weighing on ROA: “Balance sheet growth continues to impact return on assets; however, return on equity remains favorable. Our challenge remains the deployment of excess liquidity…” .
Mortgage originations contribution declined into Q3, even as rates helped margins: “Increased interest rates… helped offset a decline in the contribution from mortgage originations” .

Metric	Q3 2021	Q1 2022	Q2 2022	Q3 2022
Net Income ($USD)	$1,726,937	$1,464,106	$1,542,981	$1,840,267
EPS (Basic) ($)	$0.31	$0.26	$0.28	$0.33
EPS (Diluted) ($)	$0.30	$0.26	$0.27	$0.33

KPIs

KPI	Q1 2022	Q2 2022	Q3 2022
Total Assets ($USD)	$664,993,337	$655,465,190	$630,129,805
Book Value per Share ($)	$8.10	$7.50	$6.49
Common Shares Outstanding	5,550,476	5,552,351	5,552,351
Annualized ROA (YTD/Period %)	0.88% (Q1 period)	0.90% (YTD 6M)	0.98% (YTD 9M)
Annualized ROE (YTD/Period %)	11.24% (Q1 period)	12.57% (YTD 6M)	14.11% (YTD 9M)

Notes:

Revenue and segment detail were not disclosed in the Q1/Q2/Q3 press releases. No non-GAAP adjustments were mentioned in these releases .

Metric	Period	Previous Guidance	Current Guidance	Change
Dividend per share	Q4 2022 (payable Oct 31, 2022)	n/a	$0.17	Declared
James Island branch opening timeline	Q2 2023	Q2 2023 (reiterated)	Q2 2023	Maintained
PPP program status	Q3 2022	Diminishing fees from PPP	PPP program closed	Completed

Management did not provide quantitative guidance on revenues, margins, OpEx, OI&E, tax rate, or segment metrics in the Q3 materials .

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q3 2022)	Trend
Rate environment / margins	“Margins are improving… optimistic higher loan interest income will offset declines” (Q2) ; “razor thin margins” early year (Q1)	“Increased interest rates… helped offset decline in mortgage originations”	Improving with rising rates
Mortgage originations / fee income	“Less fee income from mortgage activity” (Q1) ; expected declines (Q2)	Contribution declined, partly offset by higher rates	Downward contribution
Liquidity deployment	“Challenge remains the deployment of excess liquidity into higher-yielding investments” (Q2) ; similar emphasis (Q1)	Continued focus on deploying liquidity amid higher rates	Ongoing challenge
Asset quality / reserves	“Reserve for loan losses is strong” (Q1) ; focus on asset quality (Q2)	“Adequately reserved for credit losses”	Stable/strong
Capitalization	Favorable ROE with balance sheet growth (Q2)	“Remain well capitalized”	Stable
Expansion	James Island branch target Q2 2023 (Q2)	Timeline reiterated (Q3)	On track
Macro/inflation	“40-year high inflation… changing rate environment” (Q1)	Rate increases continue to shape earnings mix	Persistent macro backdrop

Note: No earnings call transcript was found; themes are inferred from management press releases .

“Increased interest rates from recent Federal Reserve actions have helped offset a decline in the contribution from mortgage originations. We are adequately reserved for credit losses and remain well capitalized as we enter the fourth quarter. We have closed our books on the PPP program and are focused on finishing out another successful year for the bank.” – Fleetwood S. Hassell, President .
“Margins are improving, and we are optimistic that higher loan interest income will offset any declines in mortgage origination volume. We remain ahead of our profit plan for the first six months and look forward to the second half of the year.” – Fleetwood S. Hassell, President & CEO .
“Less fee income from mortgage activity, diminishing fees from the PPP program, and razor thin margins have adversely impacted our first quarter bottom line… our reserve for loan losses is strong… our challenge moving forward remains to deploy our excess liquidity into higher yielding assets.” – Fleetwood S. Hassell, President .

No public Q3 2022 earnings call transcript was identified; there were no available Q&A clarifications beyond press release commentary [Search attempted; none found].

S&P Global Wall Street consensus estimates for Q3 2022 EPS and revenue were unavailable via our data access at the time of analysis (SPGI limit error), so no beat/miss determination can be made. Values would normally be retrieved from S&P Global; in this case, consensus values were unavailable to us at the time of this report.

Earnings inflected positively in Q3 with EPS up to $0.33 and net income to $1.84M; higher rates are supporting margins even as mortgage originations soften .
Profitability ratios (ROA/ROE annualized YTD) remained healthy at 0.98%/14.11%, underpinning capital strength and dividend continuity ($0.17 declared) .
Excess liquidity deployment remains a key tactical lever; improving loan yields as rates rise should gradually enhance returns if asset quality remains solid .
Mortgage fee exposure continues to be a headwind; monitoring mix shift toward interest income is critical for near-term earnings resilience .
With PPP fully wound down and reserves emphasized as adequate, near-term volatility should be driven by funding costs vs asset yield expansion in a higher-rate environment .
Expansion plans (James Island) are intact for Q2 2023, signaling continued local market investment and potential deposit/loan growth catalysts .
Without consensus data, traders should focus on sequential EPS improvement and margins commentary as the primary narrative drivers into Q4 earnings updates .