Income from mortgages and fixed-term business loans helped the Bank of South Carolina achieve almost 12 percent profit growth in the second quarter.
The Charleston-based lender said on July 8 that its profit for the April-June period was nearly $ 1.67 million, up from $ 1.5 million a year earlier. On a per share basis, net income rose a penny to 27 cents.
In the first six months of 2021, profits rose 15.1 percent to about $ 3.48 million.
The public bank, with five branches, was pleased with the results, which exceeded forecasts and expectations, although overall demand for loans remains “moderate,” Chief Executive Officer Fleetwood Hassell said in a prepared speech.
The lender continued to capitalize on the region’s hot housing market, which generates mortgage income from home buyers as well as tracking operating expenses.
In addition, processing fees for loans under the Federal Payroll Protection Program for businesses affected by the COVID-19 pandemic helped boost net profit in the last quarter.
But prolonged periods of low interest rates remain a major problem for banks of all sizes, as they reduce lending margins and restrict income from bonds and other investments.
“Our challenge is to channel the huge amounts of liquidity accumulated over the past 18 months into high yielding assets,” Hassell said.
He added that the Bank of South Carolina will not compromise on its traditionally conservative lending standards.
“Asset quality remains our priority,” he said.
Some rate cuts may be on the horizon for the banking sector – or not.
Following the June meeting, the Federal Reserve released a statement and a series of economic forecasts that signaled that it would potentially reverse its stance on low interest rates earlier than previously predicted. Policymakers predict they will raise the central bank’s benchmark short-term interest rate twice by the end of 2023. In March, they indicated that the increase would not happen until 2024.
But minutes from the June 15-16 meeting released this week showed that politicians were not in agreement on when to take action.
On Friday, the Fed said in its latest message to Congress that its low-interest rate strategy is providing “strong support” to the economy recovering from the recession caused by the pandemic.
The central bank also indicated that it plans to maintain this support for as long as necessary. The new report will be the subject of a two-day hearing next week with Fed Chairman Jerome Powell, who will likely be asked when rates will start rising again.
IN Associated Press contributed to this report. Contact John McDermott by phone 843-937-5572 or follow him on Twitter at @byjohnmcdermott