EMPLOYEE STOCK OWNERSHIP PLAN

3 Months Ended

Mar. 31, 2012

EMPLOYEE STOCK OWNERSHIP PLAN

EMPLOYEE STOCK OWNERSHIP PLAN

NOTE 21 - EMPLOYEE STOCK OWNERSHIP PLAN

On May 17, 2007, the Company announced the formation of the Tidelands Bancshares, Inc. Employee Stock Ownership Plan (“ESOP”), a non-contributory plan, for its employees.  The ESOP will purchase shares of the Company’s common stock on the open market from time to time with funds borrowed from a loan from a third party lender.  All employees of the Company meeting certain tenure requirements are entitled to participate in the ESOP.  Compensation expense related to the ESOP was $0 and $15,001for the periods ended March 31, 2012 and 2011.  At March 31, 2012, the ESOP has an outstanding loan amounting to $1,375,000.

A summary of the unallocated share activity of the Company’s ESOP is presented for the periods ended March 31, 2012 and December 31, 2011.

	2012	2011
Balance, beginning of year	129,326	150,531
New share purchases	—	—
Shares released to participants	—	(5,587	)
Shares allocated to participants	—	(15,618	)
Balance, end of period	129,326	129,326

The aggregate fair value of the unallocated shares was $25,865 based on the $0.20 closing price of our common stock on March 31, 2012. The aggregate fair value of the 129,326 unallocated shares was $10,346 based on the $0.08 closing price of our common stock on December 31, 2011.