The federal tax-law changes that caused some short-term financial pain for the banking industry are helping put a shine on earnings for 2018.
The Bank of South Carolina Corp. is a case in point. When the corporate tax rate was cut in late 2017, many U.S. lenders were required to make last-minute accounting adjustments. At the small Charleston-based community bank, the onetime move lopped about $600,000 from its bottom line for that year.
The payback came in 2018. The Bank of South Carolina said its net income soared 113 percent to $1.8 million for the final three months last year, partly because it wasn't required to book the same kind of unfavorable writedown again.
"Everybody's fourth-quarter earnings should be way up," CEO Fleetwood Hassell said.
Profits increased sharply for the full year as well, though not at a triple-digit pace. The bank's 2018 net income hit an all-time high of $6.92 million, a 41 percent gain from 2017.
Hassell said the company was "pleased to end 2018 with record earnings for the quarter and the year."
"It was a great year in terms of consistent lending, superior expense control, great margins and, of course, tax reform," he said.
President Donald Trump signed the latter into law in the waning days of 2017. It slashed the nation's top corporate tax rate to about 21 percent from 35 percent.
This year, Hassell said, the Bank of South Carolina is looking forward to completing its long-planned North Charleston brick-and-mortar expansion. It hopes to open a full-service office on U.S. Highway 78 in the second half of 2019.
The company's four other branches are in downtown Charleston, Mount Pleasant, Summerville and West Ashley.