In 2002, the state's 69 insured banks had total assets of $10 billion. Forty-five of these banks were state-chartered.
South Carolina's community banks (those with assets under $1 billion) saw weakened performance in 2002. The return on assets (ROA) (the measure of earnings in relation to all resources) ratio declined by September 2002 to its lowest point in 12 quarters. The Federal Reserve's steep cuts in interest rates in 2001/02 lowered banks' funding costs, but they also compressed net interest margins (NIMs) (the difference between the lower rates offered to savers and the higher rates charged on loans) as long-term rates declined and short-term rates stabilized. Although the economy was weak in 2002, loan growth stood at 16%, and there was a shift toward higher-yielding commercial real estate (CRE) loans.