First Reliance shares hit new low


First Reliance Bancshares, one of SC’s fastest-growing bank companies over the past decade, continues to see its stock price dwindle, along with that of many other financial services companies across the nation.

First Reliance, the $600-million Florence-based parent of First Reliance Bank, saw its shares fall 75 cents Friday, or nearly 25 percent, to $3.01. That’s down from $10.53 a share a year ago.

First Reliance earned $625,632 in 2008, but its performance was marred by a $1.6 million loss in the fourth quarter.

Fourth-quarter earnings were hurt by a $3.2 million provision for loan losses, according to a filing with the Securities & Exchange Commission.

In January, First Reliance was advised it had been approved for the Treasury Department’s TARP Capital Purchase Program.

First Reliance expects to receive nearly $15 million from the Treasury Department in exchange for senior preferred stock and warrants.

The transaction is expected to close by the end of the quarter, according to the SEC filing.

Price controls: Bad in Ancient Sumeria, bad now


One of the great downfalls of modern society is our propensity for navel-gazing: The idea that everything that happens to us is unique and that nothing can be learned from history.

We see this whenever economic crises spiral beyond our control, which happens on a regular basis, and our political leaders immediately shift into “do something” mode, which almost always involves oodles of legislation.

For example, a favorite concept of politicians trying to get a handle on inflation – the rise in the general level of prices of goods and services in an economy over a substantial period of time – is to implement price controls.

Many Americans may recall President Nixon’s imposition of wage and price controls in 1971, to combat what was seen as “intolerable” inflation of more than 4 percent. What was originally a 90-day freeze on wages and prices turned into nearly 1,000 days of measures.

Not surprisingly, “the initial attempt to dampen inflation by calming inflationary expectations was a monumental failure,” as US inflation reached double digits, according to The Econ Review.

To demonstrate the inanity of price controls, The Ludwig von Mises Institute’s website has an article with excerpts from the book “Forty Centuries of Wage and Price Controls: How Not to Fight Inflation.”

A highlight: “For the past forty-six centuries (at least) governments all over the world have tried to fix wages and prices from time to time. When their efforts failed, as they usually did, governments then put the blame on the wickedness and dishonesty of their subjects, rather than upon the ineffectiveness of the official policy. The same tendencies remain today.”

The book covers the ancient world, the Roman Republic and Empire, Medieval Europe, the first centuries of the U.S. and Canada, the French Revolution, the 19th century, World War I and II, the Nazis, the Soviets, postwar rent control, and the 1970s.

It’s extremely informative and excellent evidence once again that we as a species seem to have a great deal of difficulty learning from our past mistakes.

Peoples Bancorporation posts major loss


Peoples Bancorporation Inc. lost $8.3 million in 2008, “by far the most difficult year in our Company’s history,” according to a letter to shareholders dated Feb. 26.

That compares with a $4.3 million gain in 2007. In the last three months of 2008, Peoples lost $2.8 million, compared with a gain of $693,000 during the same period the previous year.

Easley, SC-based Peoples posted a pre-tax loss of $13.4 million for the year and it more than doubled its reserves  against  possible loan losses from $4.3 million to $9.2 million during 2008, according to information filed with the Securities & Exchange Commission.

Peoples, the parent company of The Peoples National Bank, Bank of Anderson and Seneca National Bank, has seen its stock price plummet over the past year, from more than $9 a share to its current level of $1.65.

The letter to shareholders is reprinted below:

Dear Shareholder:

We would  like to thank  you for  being a  stockholder  and  supporting  Peoples Bancorporation.  In  difficult  times such as these,  your  support is extremely valuable to our entire organization, its employees and its directors. We want to take this opportunity to share with you our assessment of Peoples Bancorporation as it relates to these  difficult  economic  times.  With the  ongoing  economic recession that impacted every household in the nation,  we realize that 2008 was by far the most difficult year in our Company’s history. Having earned in excess of $4 million in each of 2005,  2006,  and 2007 we  experienced a net loss – our
first in many  years – of $8.3  million  in 2008.  Management  has  focused  its efforts on  generating  revenue and  controlling  expenses with renewed vigor in response to these difficult economic times.

Please find enclosed a copy of our  Consolidated  Financial  Highlights  for the fourth quarter and year ended December 31, 2008. It is important to realize that all three of our  subsidiary  banks remain “well  capitalized”  according to the federal  government  guidelines,  and in this economic  environment  it is often stated that, “capital is king.” We have also taken proactive, conservative steps to shore up our asset quality, not the least of which was more than doubling our reserves  against  possible loan losses from $4.3 million to $9.2 million during 2008.

We will weather this economic  storm as we have in the past, and we believe that solid,  profitable,  community banking has always been our niche and will remain our focus going  forward.  Our  strategic  plan has us well  positioned  for the future, in spite of the difficult  economy that will undoubtedly  persist in the near term.  Last of all, we  sincerely  appreciate  your  continued  support and patronage of our banks.


George B. Nalley, Jr., Chairman

R. Riggie Ridgeway, Chief Executive Officer

L. Andrew Westbrook, III, President and Chief Operating Officer 

TSFG shares showing short-term rebound


Shares of South Financial Group still have a long way to go, but they’ve shown a nice gain recently, moving from a low of 67 cents late last week to as much as $2.21 Thursday. By late morning Thursday, TSFG was trading at $1.68.

It’s been a good week for South Financial so far as company stock has moved up steadily, ending Monday at 75 cents a share, Tuesday at 95 cents and Wednesday at $1.15.

Volume has been significantly higher, as well, with approximately 8 million shares trading hands in the five trading days between Feb. 19-25, according to Yahoo! Finance. In the seven trading days prior to that, volume never topped 957,500 shares on a single day.

Obviously, South Financial has its work cut out for itself if it wants to return to its former days of glory price-wise, particularly given its nightmarish performance in 2008, but it’s nice to see it’s reversed the downward trend, at least for the time being.

Columbia airport among most expensive


Forbes magazine is reporting that Columbia Metropolitan Airport was the third-most expensive airport for commercial airline passengers last year, according to a story in The State.

“In an article headlined ‘America’s Rip-Off Airports,’ Forbes calculated that the average fare per mile at Columbia costs 39 cents,” The State reported. “That was 9 cents below the nation’s highest average fare of 48 cents a mile at Cincinnati, and 2 cents lower than Traverse City, Mich.’s 41 cents.”

The State went on to say that the Forbes’ report “debunked the perception that travelers can save money by catching a flight at Douglas International in Charlotte.”

“The average air fare per mile at Charlotte was 37 cents, a penny lower than Columbia,” the article said.

A key difference between Charlotte and Columbia, however, is that Charlotte has a significantly greater number of direct flights, which is a key concern to individuals traveling on business.

That’s one of the reasons Columbia has had a hard time luring Fortune 500 companies when they have considered relocating their corporate headquarters.

No corporate bigwig wants to have to catch connecting flights every time he or she has to head out to the West Coast or up to most Eastern or Midwestern cities of any size.

Another banner day for media watchdogs


One wonders at what point members of the Big Media – led by The New York Times, The Washington Post and National Public Radio, along with the major network news outlets – officially shunned watchdog journalism for lapdog journalism?

Steven Pearlstein’s report in The Washington Post on President Obama’s recent speech before the joint session of Congress couldn’t be any more fawning if it were written by Obama’s communications office, and then edited by his own late grandmother.

“Not since Franklin Roosevelt delivered his first fireside chat, eight days into his presidency, have Americans been more hungry – and more desperate – for economic leadership,” Pearlstein writes. “And not since FDR has there been an economic agenda as bold or ambitious, or as likely to reshape American capitalism.”

Russell Roberts of Cafe Hayek, however, says that Pearlstein is mistaken. Roberts points out that When President Reagan gave his first State of the Union address, in 1982, unemployment was more than 10 percent; today it’s currently at 7.6 percent. In the year before Reagan’s first address, inflation had exceeded 10 percent; today it’s roughly zero, Roberts added.

“Yes, Obama is spending a lot of money,” Roberts adds. “But the spending itself isn’t reshaping capitalism.”

The Washington Post would do its readers a great service by impressing upon Steven Pearlstein and its other reporters the difference between recounting their own wishful thinking and reporting actual news.

Some might expect that a reporter who’s made it to a paper of The Post’s stature would already know the difference, but apparently not.

Two more SC bank companies join bailout


The list of South Carolina financial institutions taking part in the US Treasury Department’s Capital Purchase Program continues to grow.

According to recent information released by the US Treasury Department, two more SC companies have been added to the number of Palmetto State companies taking part in program:

Regional Bankshares Inc. of Hartsville received approval for $1.5 million and BankGreenville Financial Corp. of Greenville was okayed for $1 million, according to the US Treasury Department.

For those of you keeping score at home, that brings the number of Palmetto State institutions involved in the bailout to 11:

  • The South Financial Group, which received $347 million from the government;
  • First Financial Holdings Inc., $65 million;
  • SCBT Financial Group, $64.8 million;
  • Security Federal Corp., $18 million;
  • Tidelands Bancshares Inc., $14.45 million;
  • First Community Corp., $11.35 million;
  • Greer Bancshares Inc. , $9.99 million;
  • GrandSouth Bancorporation, $9 million;
  • Congaree Bancshares Inc., $3.3 million.
  • Total federal dollars sent to SC financial institutions as part of the bailout program now sits at more than $635 million.

    Treasury created the Capital Purchase Program, a part of the Troubled Asset Relief Program, to help to stabilize and strengthen the U.S. financial system.

    Treasury allocated $250 billion under TARP’s Capital Purchase Program to invest in U.S. financial institutions.

    Race game helps those keeping pot stirred


    If, as attorney general Eric Holder said recently, the US is “a nation of cowards” when it comes to race relations, it’s because attempts at rational and logical discussion regarding the issue have been drowned out beneath the organized hysteria of race hustlers and others with something to gain by keeping the racial pot stirred.

    No one in their right mind believes we don’t still have residual problems related to race that need to be addressed. But the belief that the US is still two countries segregated by skin color, even if unofficially, is ridiculous.

    Walter Williams has an outstanding column here that looks at the fact that “just because some activity is not racially integrated does not mean that it is racially segregated.”

    Williams adds: “The bottom line is that the civil rights struggle is over and it is won. At one time black Americans didn’t share the constitutional guarantees shared by whites; today we do.”

    One often gets the impression that many liberal whites, black politicians and assorted race activists would gladly forsake the freedom of association aspect of our Constitution if it helped them achieve their political goals and, of course, put a few more dollars in their pockets.

    Is there anything Obama can’t do?


    Apparently, this past January 20 was a bigger day than many of us realized. Not only was a new president inaugurated, but the second coming of the Messiah occurred, as well.

    Consider these subheads on The Drudge Report from Tuesday, which ran one on top of the other:

    • Obama says USA will rebuild and emerge stronger
    • Obama vows to increase number of soldiers …
    • Obama vows to seek cure for cancer ‘in our time’ …
    • Obama says bank bailout may cost more than expected …
    • Obama promises universal EDUCATION THROUGH COLLEGE …
    • Obama promises universal health care … 

    The only thing missing? “Obama’s tears cure cancer,” or maybe he’s simply saving that for later in the week.

    One gets the impression that, given the staggering scope of his promises, the president has already begun campaigning for 2012. That’s possible thanks to the complicity of much of the Mainstream Media, who seem reluctant to actually ask him how the US could possibly pay for even a portion of what he’s proposed to date.

    Yes, we all know it’s the job of politicians to shovel as much BS as possible, but it’s the media’s job to wade through it all and call them on what’s realistic and what’s demagoguery.

    Here’s a news flash for the Fourth Estate – you’re falling down on the job.

    President Obama should know better, as well. At present, a significant number of sizeable financial institutions are struggling to stay solvent which has helped precipitate a painful recession and considerable concern among a large portion of the populace.

    The responsible thing to do at a time like this would be to get the country’s house in order before we begin embarking on Utopian dreams such as universal health care and universal education through college.

    Lincolnville, SC: 150 years and going strong


    The State newspaper has a fascinating feature on Linconville, SC, the only SC town founded by freed slaves that still exists.

    The Charleston County community was founded in 1867 and was named for Abraham Lincoln.

    Interestingly, the town doesn’t have a historical marker or its own entry in Walter Edgar’s recently completed Encyclopedia of South Carolina, according to The State.

    However, a 185-page book, “The History of Lincolnville, South Carolina,” was published last year by two Lincolnville sisters, Christine Hampton, 63, and Rosalee Washington, 73, the paper reported.

    Copies of the book can be found on for as little as $23.76.