February 22, 2013

Congaree Bancshares, Inc. Shareholder Letter

Dear Congaree Bancshares, Inc., Shareholder,

Even though the year 2012 was challenging, it was a productive one for Congaree State Bank.  I am pleased to report that we achieved several milestones, both in profitability and improvements in shareholders’ equity.

The Company recorded unaudited net income, after-tax benefit, of $1,016,983, which was a 37% increase over the net income, after-tax benefit of $741,007 in 2011. Earnings per share based on net income available to all common shareholders improved to $0.57 compared to $0.30 per share for 2011.  Tangible Common shareholder equity continues to strengthen from $8,909,026, or $5.05 per share for fiscal year-end 2011, to $10,183,395, or $5.77 per share for fiscal year-end 2012. Return on Average Assets and Return on Average Equity continues to improve, as reflected in the chart below.

Our net interest income to average earning asset improved from 3.74% in 2011 to 4.12% in 2012.  This contributed significantly to our improvement in net income.   

The Company successfully exited the U. S. Treasury’s Capital Purchase Program during the fourth quarter.  The Company’s regulators allowed the Company to bid on its 3.4 million outstanding preferred shares in an auction in October and the Company was successful in acquiring approximately one-third of the preferred shares.

We continue to see slow growth in the local economy, which is coupled with a highly competitive banking environment.  This combination creates a very difficult market for growth.  However, our products are competitively priced with personalized service and we hope that you will continue to refer business opportunities to us. 

I’m sure that you are all aware of the recent SCDOR breach.  Let me assure you that we consider this security breach to be very serious and we are partnering with the South Carolina Bankers Association to take advantage of their fraudulent activity network as a safeguard for our clients.  For added protection, you may also take advantage of our identity theft protection product, Identity Secure. 

I mentioned that 2013 would be a difficult year for growth.  We launched our new credit card rewards and points program last year as a service for our clients.  I encourage you to replace one of your existing credit cards with a Congaree State Bank credit card. One of our bankers will be happy to assist you.

Mortgage rates are still near historical lows.  If you, or someone you know, are interested in buying or refinancing a home, we will be more than happy to help.  Our mortgage department will work hard to find you the best mortgage rates and payments available in the market today.

Our Annual Meeting this year will be held on Thursday, May 23rd.  With over 1,800 shareholders, Congaree State Bank truly is a community bank and we need your vote.  Fifty percent of the shares have to be voted in order to hold the Annual Meeting that allows us to conduct business.  If you would like to help us reduce further costs, please vote your shares promptly upon receipt of the proxy card we will provide.  We will be mailing the annual report package with the proxy card around April 10, 2013.  If you don’t receive your package by April 26th, please call Julie Coyle at 803.794.2265, extension 122 for assistance.   

We believe our performance in 2012 shows our continued commitment to increase shareholder value.  We will remain focused on continuing this progress. I wish you all a prosperous year and look forward to seeing you in May.

Charles A. Kirby

Selected Financial Information (Unaudited)










       Twelve Months Ended






                 December 31,


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Return on Average Equity








Return on Average Assets
















Tangible Book Value per Share
















Summary Income Statement







Net Interest Income








Provision for Loan Losses








Non-Interest Income








Non-Interest Expense








Pre-Tax Income








     Tax Benefit








Net Income








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