Helped by steady demand for home loans, the Bank of South Carolina's parent reported a 19 percent gain in its first-quarter profit compared to the same period a year ago.
Net income for the Charleston-based company totaled $1.81 million for the January-March period, according to a statement released before its annual meeting of stockholders on April 13.
On a per-share basis, earnings rose a nickel to 32 cents, and total assets increased about 11 percent to $554 million.
Overall, the five-branch lender was pleased with the results, Bank of South Carolina Corp. CEO Fleetwood Hassell said in prepared remarks.
"Robust mortgage activity continues to produce strong earnings for the bank, as interest rates remain low and housing inventory scarce," he said.
Also, fees the company received from processing federal Payroll Protection Program loans for businesses affected by the COVID-19 pandemic helped firm up the bottom line last quarter.
While tock-bottom interest rates have helped fuel mortgage volume, they also continue to crimp how much money banks can earn from underwriting loans and investing in bonds and other securities.
"Loan demand is consistent, albeit with narrower margins," Hassell said. "Moving forward, our challenge is to deploy excess liquidity into higher-yielding assets in a rate environment that rivals that of the Great Recession."
The situation isn't expected to change soon. Federal Reserve chief Jerome Powell said during an appearance on “60 Minutes" this weekend that it's "highly unlikely" the central bank will raise it benchmark rate from near zero in 2021. An increase will be considered once the labor market has fully recovered and inflation remains “moderately above 2 percent for some time,” the Fed chairman reiterated on the news show.
Banks also are looking ahead at how long the residential real estate boom can be sustained, as dwindling supply and strong demand push prices higher.
In the local region, for example, less than 1,600 homes were actively seeking buyers as of this week. That's down more than 70 percent from a year ago and about 500 below the number of properties that were sold in March, according to new figures released by the Charleston Trident Association of Realtors.
Over the same period, the median home price increased about 14 percent to $330,000.