Investment Thesis
Bank of South Carolina demonstrates solid profitability with a 24.6% net margin and positive free cash flow of $2.0M, but faces significant challenges including minimal ROA of 0.4%, weak ROE of 6.7%, and concerningly low interest coverage of 1.5x. The company shows modest revenue growth of 1.6% YoY, which combined with thin asset returns, suggests limited operational efficiency despite healthy margin profiles.
Strengths
- Strong net profit margin of 24.6% demonstrates effective cost control
- Positive free cash flow generation of $2.0M with 17.5% FCF margin indicates operational liquidity
- Zero debt/equity ratio provides financial stability and eliminates leverage risk
- Substantial asset base of $648.4M provides operational foundation
Risks
- Critically low ROA of 0.4% indicates poor asset utilization and operational inefficiency for a bank
- Weak interest coverage ratio of 1.5x suggests minimal buffer for handling interest obligations
- Modest revenue growth of 1.6% YoY indicates stagnation in a competitive banking environment
- Deteriorating EPS of -0.8% YoY despite positive net income signals shareholder value erosion
- Low ROE of 6.7% substantially underperforms typical bank industry benchmarks of 8-12%
Key Metrics to Watch
- Asset quality metrics and non-performing loan ratios to assess credit risk
- Net interest margin trends as primary revenue driver for banks
- Deposit growth and funding cost changes to evaluate competitive positioning
- Return on assets trajectory to determine if operational efficiency is improving
Financial Metrics
Revenue
11.7M
Net Income
2.9M
EPS (Diluted)
$0.51
Free Cash Flow
2.0M
Total Assets
648.4M
Cash
25.4M
Profitability Ratios
Gross Margin
N/A
Operating Margin
30.1%
Net Margin
24.6%
ROE
6.7%
ROA
0.4%
FCF Margin
17.5%
Balance Sheet & Liquidity
Current Ratio
N/A
Quick Ratio
N/A
Debt/Equity
0.00x
Debt/Assets
93.4%
Interest Coverage
1.49x
Long-term Debt
N/A
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-03-21T04:20:16.481740 |
Data as of: 2023-06-30 |
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