EMPLOYEE STOCK OWNERSHIP PLAN

3 Months Ended

Mar. 31, 2013

EMPLOYEE STOCK OWNERSHIP PLAN

EMPLOYEE STOCK OWNERSHIP PLAN

NOTE 20 - 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 $3,255 and $0 for the periods ended March 31, 2013 and 2012.  At March 31, 2013, the ESOP has an outstanding loan amounting to $1,175,000.

A summary of the unallocated share activity of the Company’s ESOP is presented for the periods ended March 31, 2013 and December 31, 2012.

	2013	2012
Balance, beginning of year	108,825	129,326
New share purchases	—	—
Shares released to participants	—	(10,413	)
Shares allocated to participants	—	(10,088	)
Balance, end of period	108,825	108,825

The aggregate fair value of the unallocated shares was $43,530 based on the $0.40 closing price of our common stock on March 31, 2013. The aggregate fair value of the 108,825 unallocated shares was $33,736 based on the $0.31 closing price of our common stock on December 31, 2012.