BANK OF SOUTH CAROLINA CORPORATION - PARENT COMPANY

12 Months Ended

Dec. 31, 2011

Bank Of South Carolina Corporation - Parent Company

BANK OF SOUTH CAROLINA CORPORATION - PARENT COMPANY

16.

BANK OF SOUTH CAROLINA CORPORATION - PARENT COMPANY

The Company’s principal source of income is dividends from the Bank. Certain regulatory requirements restrict the amount of dividends which the Bank can pay to the Company. The Company’s principal asset is its investment in its Bank subsidiary. The Company’s condensed statements of financial condition as of December 31, 2011 and 2010, and the related condensed statements of operations and cash flows for the years ended December 31, 2011, 2010 and 2009, are as follows:

CONDENSED STATEMENTS OF FINANCIAL CONDITION

	2011		2010
Assets
Cash	$	541,500	$	160,497
Investment in wholly-owned bank subsidiary		31,309,093		28,496,885
Other assets		143,276		61,500
Total assets	$	31,993,869	$	28,718,882
Liabilities and shareholders’ equity
Shareholders’ equity		31,993,869		28,718,882
Total liabilities and shareholders’ equity	$	31,993,869	$	28,718,882

	2011			2010			2009
Interest income	$	289		$	374		$	540
Net operating expenses		(138,877	)		(136,384	)		(123,639	)
Dividends received from bank		1,790,000			1,715,000			905,000
Equity in undistributed earnings of subsidiary		1,537,906			1,531,523			1,087,953
Net income	$	3,189,318		$	3,110,513		$	1,869,854

CONDENSED STATEMENTS OF CASH FLOWS

	2011			2010			2009
Cash flows from operating activities:
Net income	$	3,189,318		$	3,110,513		$	1,869,854
Stock-based compensation expense		64,587			50,721			47,200
Equity in undistributed earnings of subsidiary		(1,537,906	)		(1,531,522	)		(1,087,953	)
Increase in other assets		(81,776	)		(29,102	)		(25,521	)
Net cash provided by operating activities		1,634,223			1,600,610			803,580
Cash flows from financing activities:
Dividends paid		(1,376,623	)		(1,688,084	)		(1,912,940	)
Fractional shares paid		-			(2,466	)
Stock options exercised		123,403			210,811			235,315
Net cash used by financing activities		(1,253,220	)		(1,479,739	)		(1,677,625	)
Net (decrease) increase in cash		381,003			120,871			(874,045	)
Cash at beginning of year		160,497			39,626			913,671
Cash at end of year	$	541,500		$	160,497		$	39,626
Change in dividend payable	$	488,944		$	-		$	(636,256	)