##### Table of Contents





SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





Form 10-KSB





(Mark One)

|x | Annual Report under Section 13 or 15(d) of the Securities Exchange Act of 1934
|- | ------------------------------------------------------------------------------

For the fiscal year ended December 31, 2007

or



| ̈ | Transition Report under Section 13 or 15(d) of the Securities Exchange Act of 1934
|- | ----------------------------------------------------------------------------------

For the transition period from  to

Commission file no. 33-76644





COMMUNITYCORP

(Name of Small Business Issuer in Its Charter)







|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|South Carolina                                                 |  | 57-1019001                          
|(State or Other Jurisdiction of Incorporation or Organization) |  | (I.R.S. Employer Identification No.)



|                                                   |  |           
|-------------------------------------------------- |  | ----------
|1100 N. Jefferies Blvd. Walterboro, South Carolina |  | 29488     
|(Address of Principal Executive Offices)           |  | (Zip Code)

(843) 549-2265

Issuers Telephone Number, Including Area Code





Securities registered
pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Common Stock





Check whether the issuer is not required to file reports pursuant to Section 13 or 15 (d) of the Exchange Act   ̈.

NOTE  Checking the box above will not relieve any registrant required to file report pursuant to
Section 13 or 15 (d) of the Exchange Act from their obligations under those Sections.

Check whether the issuer (1) filed
all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for past 90 days.    Yes  x    No   ̈

Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-K in this form, and no disclosure will be contained, to
the best of registrants knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB.  x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  YES   ̈    NO  x

The issuers revenues for
its most recent fiscal year were $11,058,149.

The aggregate market value of the voting stock held by non-affiliates of the registrant as
of March 1, 2008 was $19,233,040. This calculation is based upon $80, the last trade price of the common stock of which the Company is aware. There is no active trading market for the common stock and trades are limited and sporadic.

There were 240,413 shares of the Companys common stock issued and outstanding as of the record date, March 1, 2008.

Transitional Small Business Disclosure Format. (Check one):    Yes  x    No   ̈

DOCUMENTS INCORPORATED BY
REFERENCE

The Companys 2007 Annual Report to Shareholders  Part II.

Portions of the Companys Proxy Statement for the 2007 Annual Meeting of Shareholders  Part III.









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##### Table of Contents

Index



|         |  |   |  |                                                                                                                 |  |     
|-------- |  | - |  | --------------------------------------------------------------------------------------------------------------- |  | ----
|         |  |   |  |                                                                                                                 |  | Page
|PART I   |  |  
|Item 1   |  | - |  | Description of Business                                                                                         |  | 2   
|Item 2   |  | - |  | Description of Property                                                                                         |  | 14  
|Item 3   |  | - |  | Legal Proceedings                                                                                               |  | 14  
|Item 4   |  | - |  | Submission of Matters to a Vote of Security Holders                                                             |  | 14  
|         | 
|PART II  |  |  
|Item 5   |  | - |  | Market for Common Equity and Related Shareholder Matters                                                        |  | 14  
|Item 6   |  | - |  | Managements Discussion and Analysis                                                                            |  | 14  
|Item 7   |  | - |  | Financial Statements                                                                                            |  | 14  
|Item 8   |  | - |  | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure                            |  | 14  
|Item 8A  |  | - |  | Controls and Procedures                                                                                         |  | 15  
|Item 8B  |  | - |  | Other Information                                                                                               |  | 16  
|         | 
|PART III |  |  
|Item 9   |  | - |  | Directors, Executive Officers, Promoters and Control Persons; Compliance with Section 16(a) of the Exchange Act |  | 16  
|Item 10  |  | - |  | Executive Compensation                                                                                          |  | 16  
|Item 11  |  | - |  | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters                  |  | 16  
|Item 12  |  | - |  | Certain Relationships and Related Transactions                                                                  |  | 16  
|Item 13  |  | - |  | Exhibits                                                                                                        |  | 16  
|Item 14  |  | - |  | Principal Accountant Fees and Services                                                                          |  | 16  



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##### Table of Contents

PART I

FORWARD-LOOKING STATEMENTS

This Report contains statements which constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements are based on many
assumptions and estimates and are not guarantees of future performance. Our actual results may differ materially from those projected in any forward-looking statements, as they will depend on many factors about which we are unsure, including many
factors which are beyond our control. The words may, would, could, will, expect, anticipate, believe, intend, plan, and estimate,
as well as similar expressions, are meant to identify such forward-looking statements. Potential risks and uncertainties include, but are not limited to:



| |  | significant increases in competitive pressure in the banking and financial services industries;
|- |  | -----------------------------------------------------------------------------------------------



| |  | changes in the interest rate environment which could reduce anticipated or actual margins;
|- |  | ------------------------------------------------------------------------------------------



| |  | changes in political conditions or the legislative or regulatory environment;
|- |  | -----------------------------------------------------------------------------



| |  | general economic conditions, either nationally or regionally and especially in primary service area, becoming less favorable than expected resulting in, among other
things, a deterioration in credit quality;
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | changes occurring in business conditions and inflation;
|- |  | -------------------------------------------------------



| |  | changes in technology;
|- |  | ----------------------



| |  | changes in monetary and tax policies;
|- |  | -------------------------------------



| |  | changes in the securities markets; and
|- |  | --------------------------------------



| |  | other risks and uncertainties detailed from time to time in our filings with the Securities and Exchange Commission.
|- |  | --------------------------------------------------------------------------------------------------------------------



|Item 1. | Description of Business
|------- | -----------------------

General

Communitycorp was organized in 1995 to serve as a bank holding company for Bank of Walterboro. The bank commenced business on May 1, 1989 as a South Carolina
state-chartered bank headquartered in Walterboro, South Carolina. The principal business activity of the Company is to provide banking services to domestic markets, principally in Colleton County, Jasper County and Northern Charleston County, South
Carolina. The Company opened an additional branch in 2004 in Ridgeland, South Carolina.

Our primary source of revenue is interest income and fees, which
we earn by lending and investing our capital and the funds which are held on deposit. Because loans generally earn higher rates of interest than investments, the bank seeks to employ as many of its deposit funds as possible in the form of loans to
individuals and businesses. To ensure sufficient liquidity, we also maintain a portion of the Banks deposits in cash, government securities, deposits with other financial institutions, and overnight loans of excess reserves (known as
federal funds sold) to correspondent banks. The revenue which the bank earns (prior to deducting its overhead expenses) is essentially a function of the amount of the Banks loans and deposits, as well as the profit margin
(interest spread) and fee income.



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##### Table of Contents

Marketing Focus

Our
bank primarily serves the city of Walterboro and the surrounding area of Colleton County, South Carolina. The banks extended market area also includes the north side of Charleston County, South Carolina where the Ravenel branch is located and
Jasper County where the Ridgeland branch is located. The Bank strives to maintain its business in these market areas.

Banking Services

The bank strives to provide its customers with the breadth of products and services comparable to those offered by large regional banks, while maintaining the quick
response and personal service of a locally owned and managed bank. We offer a full range of deposit services and originate commercial and personal loans.



| |  | Deposit Services. The bank offers a full range of deposit services that are typically available in most banks and savings and loan
associations, including checking accounts, NOW accounts, savings accounts, and other time deposits of various types, ranging from daily money market accounts to longer-term certificates of deposit. The transaction accounts and time certificates are
tailored to our principal market area at rates competitive to those offered by other banks in the area. In addition, we offer certain retirement account services, such as Individual Retirement Accounts (IRAs). All deposit accounts are insured by the
Federal Deposit Insurance Corporation (the FDIC) up to the maximum amount allowed by law. The bank solicits these accounts from individuals, businesses, associations and organizations, and governmental authorities.
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Loan Products. The bank offers a full range of commercial and personal loans. Commercial loans include both secured and unsecured loans for
working capital (including loans secured by inventory and accounts receivable), business expansion (including acquisition of real estate and improvements), and purchase of equipment and machinery. Consumer loans include equity lines of credit and
secured and unsecured loans for financing automobiles, home improvements, education, and personal investments. The bank also makes real estate construction and acquisition loans. The banks lending activities are subject to a variety of lending
limits imposed by federal law. While differing limits apply in certain circumstances based on the type of loan or the nature of the borrower (including the borrowers relationship to us), in general we are subject to a loans-to-one-borrower
limit of an amount equal to 15% of the banks unimpaired capital and surplus. We may not make any loans to any director, officer, employee, or 10% shareholder of the bank unless the loan is approved by our board of directors and is made on
terms not more favorable to such a person than would be available to a person not affiliated with us.
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Other Services.Other bank services include cash management services, safe deposit boxes, travelers checks, direct deposit of payroll and
social security checks, and automatic drafts for various accounts. The bank is associated with Honor and Plus networks of automated teller machines that may be used by our customers throughout South Carolina and other regions. The bank also offers
VISA credit card services through a correspondent bank as an agent for us. The Bank offers an Internet banking product accessible via the Banks custom website at www.bankofwalterboro.com.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

Competition

Banks
generally compete with other financial institutions through the selection of banking products and services offered, the pricing of services, the level of service provided, the convenience and availability of services, and the degree of expertise and
the personal manner in which services are offered. South Carolina law permits statewide branching by banks and savings institutions, and many financial institutions in the state have branch networks. Consequently, commercial banking in South
Carolina is highly competitive. As of December 31, 2007, there were approximately five commercial banks, a savings and loan institutions, and a credit union in the same area as Bank of Walterboro. Many large banking organizations currently
operate in the Banks market area, several of which are controlled by out-of-state ownership. In addition, competition between commercial banks and thrift institutions (savings institutions and credit unions) has been intensified significantly
by the elimination of many previous distinctions between the various types of financial institutions and the expanded powers and increased activity of thrift institutions in areas of banking which previously had been the sole domain of commercial
banks. Recent legislation, together with other regulatory changes by the primary regulators of the various financial institutions, has resulted in almost total elimination of practical distinctions between a commercial bank and a thrift institution.
Consequently, competition among financial institutions of all types is largely unlimited with respect to legal authority to provide most financial services.

SUPERVISION AND REGULATION

Both the company and the bank are subject to extensive state and federal banking laws and regulations which
impose specific requirements or restrictions on and provide for general regulatory oversight of virtually all aspects of operations. These laws and regulations are generally intended to protect depositors, not shareholders. The following summary is
qualified by reference to the statutory and regulatory provisions discussed. Changes in applicable laws or regulations may have a material effect on our business and prospects. Beginning with the enactment of the Financial Institution Report
Recovery and Enforcement Act in 1989 and following with the FDIC Improvement Act in 1991, numerous additional regulatory requirements have been placed on the banking industry in the past several years, and additional changes have been proposed. Our
operations may be affected by legislative changes and the policies of various regulatory authorities. We cannot predict the effect that fiscal or monetary policies, economic control, or new federal or state legislation may have on our business and
earnings in the future.

Gramm-Leach-Bliley Act

On
November 4, 1999, the U.S. Senate and House of Representatives each passed the Gramm-Leach-Bliley Act, previously known as the Financial Services Modernization Act of 1999. The Act was signed into law on November 12, 1999. Among other
things, the Act repeals the restrictions on banks affiliating with securities firms contained in sections 20 and 32 of the Glass-Steagall Act. The Act also permits bank holding companies to engage in a statutorily provided list of financial
activities, including insurance and securities underwriting and agency activities, merchant banking, and insurance company portfolio investment activities. The Act also authorizes activities that are complementary to financial
activities.

The Act is intended to grant to community banks certain powers as a matter of right that larger institutions have accumulated on an ad hoc
basis. Nevertheless, the Act may have the result of increasing the amount of competition that we face from larger institutions and other types of companies. In fact, it is not possible to predict the full effect that the Act will have on us. From
time to time other changes are proposed to laws affecting the Banking industry, and these changes could have a material effect on our business and prospects. We cannot predict the nature or the extent of the effect on our business and earnings of
fiscal or monetary policies, economic controls, or new federal or state legislation.



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##### Table of Contents

SUPERVISION AND REGULATION(continued)



Sarbanes-Oxley Act

The Sarbanes-Oxley Act was signed into law on July 30, 2002, and mandated extensive reforms and requirements for public companies. The SEC has adopted extensive new regulations pursuant to the requirements of the Sarbanes-Oxley Act.
The Sarbanes-Oxley Act and the SECs new regulations have increased the Companys cost of doing business, particularly its fees for audit services and legal services, and the law and regulations are expected to continue to do so. However,
the Company does not believe that it will be affected by Sarbanes-Oxley and the new SEC regulations in ways that are materially different or onerous than those of other public companies of similar size and in similar businesses

Communitycorp

Because it owns the outstanding capital stock of the
bank, the company is a bank holding company under the federal Bank Holding Company Act of 1956 and the South Carolina Banking and Branching Efficiency Act.

The Bank Holding Company Act. Under the Bank Holding Company Act, the company is subject to periodic examination by the Federal Reserve and required to file periodic reports of its operations and any additional
information that the Federal Reserve may require. Our activities at the bank and holding company level are limited to:



| |  | banking and managing or controlling banks;
|- |  | ------------------------------------------



| |  | furnishing services to or performing services for its subsidiaries; and
|- |  | -----------------------------------------------------------------------



| |  | engaging in other activities that the Federal Reserve determines to be so closely related to banking
|- |  | ----------------------------------------------------------------------------------------------------



| |  | and managing or controlling banks as to be a proper incident thereto.
|- |  | ---------------------------------------------------------------------

Investments, Control, and Activities. With certain limited exceptions, the Bank Holding Company Act requires every bank holding company to obtain the prior approval of the Federal Reserve before:



| |  | acquiring substantially all the assets of any bank;
|- |  | ---------------------------------------------------



| |  | acquiring direct or indirect ownership or control of any voting shares of any bank if after the acquisition it would own or control more than 5% of the voting
shares of such bank (unless it already owns or controls the majority of such shares); or
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | merging or consolidating with another bank holding company.
|- |  | -----------------------------------------------------------

In addition, and subject to certain exceptions, the Bank Holding Company Act and the Change in Bank Control Act, together with regulations there under, require Federal Reserve approval prior to any person or company acquiring
control of a bank holding company. Control is conclusively presumed to exist if an individual or company acquires 25% or more of any class of voting securities of a bank holding company. Control is reputably presumed to exist if a person
acquires 10% or more, but less than 25%, of any class of voting securities and either the company has registered securities under Section 12 of the Securities Exchange Act of 1934 or no other person owns a greater percentage of that class of
voting securities immediately after the transaction. The companys common stock is registered under the Securities Exchange Act of 1934. The regulations provide a procedure for challenge of the rebutable control presumption.



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##### Table of Contents

SUPERVISION AND REGULATION (continued)



Communitycorp(continued)



Under the Bank Holding Company Act, a bank holding company is generally prohibited from engaging in, or acquiring
direct or indirect control of more than 5% of the voting shares of any company engaged in nonbanking activities unless the Federal Reserve Board, by order or regulation has found those activities to be so closely related to banking or managing or
controlling banks as to be a proper incident thereto. Some of the activities that the Federal Reserve Board has determined by regulation to be proper incidents to the business of a bank holding company include:



| |  | making or servicing loans and certain types of leases;
|- |  | ------------------------------------------------------



| |  | engaging in certain insurance and discount brokerage activities;
|- |  | ----------------------------------------------------------------



| |  | performing certain data processing services;
|- |  | --------------------------------------------



| |  | acting in certain circumstances as a fiduciary or investment or financial adviser;
|- |  | ----------------------------------------------------------------------------------



| |  | owning savings associations; and
|- |  | --------------------------------



| |  | making investments in certain corporations or projects designed primarily to promote community welfare.
|- |  | -------------------------------------------------------------------------------------------------------

The Federal Reserve Board imposes certain capital requirements on the company under the Bank Holding Company Act, including a minimum leverage ratio and a minimum ratio
of qualifying capital to risk-weighted assets. These requirements are described below under Capital Regulations. Subject to its capital requirements and certain other restrictions, the company is able to borrow money to make
a capital contribution to the bank, and these loans may be repaid from dividends paid from the bank to the company. Our ability to pay dividends is subject to regulatory restrictions as described below in Bank of
WalterboroDividends. The company is also able to raise capital for contribution to the bank by issuing securities without having to receive regulatory approval, subject to compliance with federal and state securities laws.

Source of Strength; Cross-Guarantee. In accordance with Federal Reserve Board policy, the company is expected to act as a source of financial
strength to the bank and to commit resources to support the bank in circumstances in which the company might not otherwise do so. Under the Bank Holding Company Act, the Federal Reserve Board may require a bank holding company to terminate any
activity or relinquish control of a nonbank subsidiary, other than a nonbank subsidiary of a bank, upon the Federal Reserve Boards determination that such activity or control constitutes a serious risk to the financial soundness or stability
of any subsidiary depository institution of the banks holding company. Further, federal bank regulatory authorities have additional discretion to require a bank holding company to divest itself of any bank or nonbank subsidiary if the agency
determines that divestiture may aid the depository institutions financial condition.

South Carolina State Regulation. As a bank
holding company registered under the South Carolina Banking and Branching Efficiency Act, we are subject to limitations on sale or merger and to regulation by the South Carolina Board of Financial Institutions. We must receive the Boards
approval prior to engaging in the acquisition of banking or nonbanking institutions or assets, and we must file periodic reports with respect to our financial condition and operations, management, and intercompany relationships between the company
and its subsidiaries.



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SUPERVISION AND REGULATION(continued)



Bank of Walterboro

The bank operates as a South Carolina state bank and is subject to examination by the South Carolina Board of Financial Institutions. Deposits in the bank are insured by the FDIC up to a maximum amount, which is generally $100,000 per
depositor subject to aggregation rules.

The South Carolina Board of Financial Institutions and the FDIC regulate or monitor virtually all areas of the
banks operations, including:



| |  | security devices and procedures;
|- |  | --------------------------------



| |  | adequacy of capitalization and loss reserves;
|- |  | ---------------------------------------------



| |  | loans;
|- |  | ------



| |  | investments;
|- |  | ------------



| |  | borrowings;
|- |  | -----------



| |  | deposits;
|- |  | ---------



| |  | mergers;
|- |  | --------



| |  | issuances of securities;
|- |  | ------------------------



| |  | payment of dividends;
|- |  | ---------------------



| |  | interest rates payable on deposits;
|- |  | -----------------------------------



| |  | interest rates or fees chargeable on loans;
|- |  | -------------------------------------------



| |  | establishment of branches;
|- |  | --------------------------



| |  | corporate reorganizations;
|- |  | --------------------------



| |  | maintenance of books and records; and
|- |  | -------------------------------------



| |  | adequacy of staff training to carry on safe lending and deposit gathering practices.
|- |  | ------------------------------------------------------------------------------------

The South Carolina Board of Financial Institutions requires the bank to maintain specified capital ratios and imposes limitations on the banks aggregate investment
in real estate, bank premises, and furniture and fixtures. The FDIC requires the bank to prepare quarterly reports on the banks financial condition and to conduct an annual audit of its financial affairs in compliance with its minimum
standards and procedures.

Under the FDIC Improvement Act, all insured institutions must undergo regular on site examinations by their appropriate banking
agency. The cost of examinations of insured depository institutions and any affiliates may be assessed by the appropriate agency against each institution or affiliate as it deems necessary or appropriate. Insured institutions are required to submit
annual reports to the FDIC, their federal regulatory agency, and their state supervisor when applicable. The FDIC Improvement Act directs the FDIC to develop a method for insured depository institutions to provide supplemental disclosure of the
estimated fair market value of assets and liabilities, to the extent feasible and practicable, in any balance sheet, financial statement, report of condition or any other report of any insured depository institution. The FDIC Improvement Act also
requires the federal banking regulatory agencies to prescribe, by regulation, standards for all insured depository institutions and depository institution holding companies relating, among other things, to the following:



| |  | internal controls;
|- |  | ------------------



| |  | information systems and audit systems;
|- |  | --------------------------------------



| |  | loan documentation;
|- |  | -------------------



| |  | credit underwriting;
|- |  | --------------------



| |  | interest rate risk exposure; and
|- |  | --------------------------------



| |  | asset quality.
|- |  | --------------



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##### Table of Contents

SUPERVISION AND REGULATION (continued)



Bank of Walterboro(continued)



Deposit Insurance and Assessments. Deposits at the Bank are insured by the Deposit Insurance Fund
(the DIF) as administered by the FDIC, up to the applicable limits established by lawgenerally $100,000 per account holder and $250,000 for certain retirement account holders. In November 2006, the FDIC adopted final
regulations that set the deposit insurance assessment rates that took effect in 2007. The FDIC uses a risk-based assessment system that assigns insured depository institutions to one of four risk categories based on three primary sources of
informationsupervisory risk ratings for all institutions, financial ratios for most institutions, including the Company, and long-term debt issuer ratings for large institutions that have such ratings. The new premium rate structure
imposes a minimum assessment of from five to seven cents for every $100 of domestic deposits on institutions that are assigned to the lowest risk category. This category is expected to encompass substantially all insured institutions, including
the Bank. A one-time assessment credit is available to offset up to 100% of the 2007 assessment. Any remaining credit can be used to offset up to 90% of subsequent annual assessments through 2010. For institutions assigned to higher
risk categories, the premium that took effect in 2007 ranges from ten cents to forty-three cents per $100 of deposits.

The FDIC also collects a
deposit-based assessment from insured financial institutions on behalf of The Financing Corporation (FICO). The funds from these assessments are used to service debt issued by FICO in its capacity as a financial vehicle for the
Federal Savings and Loan Insurance Corporation. The FICO assessment rate is set quarterly and in 2006 ranged from 1.32 cents to 1.24 cents per $100 of assessable deposits. For the first quarter of 2007, the FICO assessment rate was
1.22 cents per $100 of assessable deposits.

Transactions With Affiliates and Insiders.The bank is subject to the provisions of
Section 23A and 23B of the Federal Reserve Act, which places limits on the amount of loans or extensions of credit to, or investments in, or certain other transactions with, affiliates and on the amount of advances to third parties
collateralized by the securities or obligations of affiliates. The aggregate of all covered transactions is limited in amount, as to any one affiliate, to 10% of the banks capital and surplus and, as to all affiliates combined, to 20% of the
banks capital and surplus. Furthermore, within the foregoing limitations as to amount, each covered transaction must meet specified collateral requirements. Compliance is also required with certain provisions designed to avoid the taking of
low quality assets.

The bank is also subject to the provisions of Section 23B of the Federal Reserve Act which, among other things, prohibits an
institution from engaging in certain transactions with certain affiliates unless the transactions are on terms substantially the same, or at least as favorable to such institution or its subsidiaries, as those prevailing at the time for comparable
transactions with nonaffiliated companies. The bank is subject to certain restrictions on extensions of credit to executive officers, directors, certain principal shareholders, and their related interests. Such extensions of credit (i) must be
made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with third parties and (ii) must not involve more than the normal risk of repayment or present other
unfavorable features.

Dividends. The bank is subject to regulatory restrictions on the payment of dividends, including a prohibition
of payment of dividends from its capital. All dividends must be paid out of the undivided profits then on hand, after deducting expenses, including losses and bad debts. In addition, under the FDIC Improvement Act, the bank may not pay a dividend
if, after paying the dividend, the bank would be undercapitalized. See Capital Regulations below.

Branching. Under
current South Carolina law, we may open bank branch offices throughout South Carolina with the prior approval of the South Carolina Board of Financial Institutions. In addition, with prior regulatory approval, the bank may acquire existing banking
operations in South Carolina. Furthermore, federal legislation has recently been passed which permits interstate branching. The new law permits out-of-state acquisitions by bank holding companies, interstate branching by banks if allowed by state
law, interstate merging by banks, and de novo branching by banks if allowed by state law. North Carolina has passed legislation that, in effect, prohibits de novo branching by South Carolina banks into North Carolina.



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##### Table of Contents

SUPERVISION AND REGULATION (continued)



Bank of Walterboro(continued)



Anti-Tying Restrictions. Under amendments to the Bank Holding Company Act and Federal Reserve
regulations, a bank is prohibited from engaging in certain tying or reciprocity arrangements with its customers. In general, a bank may not extend credit, lease, sell property, or furnish any services or fix or vary the consideration for these
on the condition that (i) the customer obtain or provide some additional credit, property, or services from or to the bank, the bank holding company or subsidiaries thereof or (ii) the customer may not obtain some other credit, property,
or services from a competitor, except to the extent reasonable conditions are imposed to assure the soundness of the credit extended. Certain arrangements are permissible: a bank may offer combined-balance products and may otherwise offer more
favorable terms if a customer obtains two or more traditional bank products; and certain foreign transactions are exempt from the general rule. A bank holding company or any bank affiliate also is subject to anti-tying requirements in
connection with electronic benefit transfer services.

Community Reinvestment Act. The Community Reinvestment Act requires that, in
connection with examinations of financial institutions within their respective jurisdictions, a financial institutions primary federal regulator (this is the FDIC for our bank) shall evaluate the record of each financial institution in meeting
the credit needs of its local community, including low and moderate income neighborhoods. These factors are also considered in evaluating mergers, acquisitions, and applications to open a branch or facility. Failure to adequately meet these criteria
could impose additional requirements and limitations on the bank.

Consumer Protection Regulations. Interest and other charges
collected or contracted for by the bank are subject to state usury laws and federal laws concerning interest rates. The banks loan operations are also subject to federal laws applicable to credit transactions, such as:



| |  | the federal Truth-In-Lending Act, governing disclosures of credit terms to consumer borrowers;
|- |  | ----------------------------------------------------------------------------------------------



| |  | the Home Mortgage Disclosure Act of 1975, requiring financial institutions to provide information to enable the public and public officials to determine whether a
financial institution is fulfilling its obligation to help meet the housing needs of the community it serves;
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | the Equal Credit Opportunity Act, prohibiting discrimination on the basis of race, creed or other prohibited factors in extending credit;
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------



| |  | the Fair Credit Reporting Act of 1978, governing the use and provision of information to credit reporting agencies;
|- |  | -------------------------------------------------------------------------------------------------------------------



| |  | the Fair Debt Collection Act, governing the manner in which consumer debts may be collected by collection agencies; and
|- |  | -----------------------------------------------------------------------------------------------------------------------



| |  | the rules and regulations of the various federal agencies charged with the responsibility of implementing such federal laws.
|- |  | ----------------------------------------------------------------------------------------------------------------------------

The deposit operations of the bank also are subject to:



| |  | the Right to Financial Privacy Act, which imposes a duty to maintain confidentiality of consumer financial records and prescribes procedures for complying with
administrative subpoenas of financial records; and
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | the Electronic Funds Transfer Act and Regulation E issued by the Federal Reserve Board to implement that act, which governs automatic deposits to and withdrawals
from deposit accounts and customers rights and liabilities arising from the use of automated teller machines and other electronic banking services.
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

SUPERVISION AND REGULATION (continued)



Bank of Walterboro(continued)



Capital Regulations. The federal bank regulatory authorities have adopted risk-based capital
guidelines for banks and bank holding companies that are designed to make regulatory capital requirements more sensitive to differences in risk profiles among banks and bank holding companies and account for off-balance sheet items. The guidelines
are minimums, and the federal regulators have noted that banks and bank holding companies contemplating significant expansion programs should not allow expansion to diminish their capital ratios and should maintain ratios in excess of the minimums.
We have not received any notice indicating that either the company or the bank is subject to higher capital requirements. The current guidelines require all bank holding companies and federally regulated banks to maintain a minimum risk-based total
capital ratio equal to 8%, of which at least 4% must be Tier 1 capital. Tier 1 capital includes common shareholders equity, qualifying perpetual preferred stock, and minority interests in equity accounts of consolidated subsidiaries, but
excludes goodwill and most other intangibles and excludes the allowance for loan and lease losses. Tier 2 capital includes the excess of any preferred stock not included in Tier 1 capital, mandatory convertible securities, hybrid capital
instruments, subordinated debt and intermediate term-preferred stock, and general reserves for loan and lease losses up to 1.25% of risk-weighted assets.

Under these guidelines, banks and bank holding companies assets are given risk-weights of 0%, 20%, 50%, or 100%. In addition, certain off-balance sheet items are given credit conversion factors to convert them to asset
equivalent amounts to which an appropriate risk-weight applies. These computations result in the total risk-weighted assets. Most loans are assigned to the 100% risk category, except for first mortgage loans fully secured by residential property
and, under certain circumstances, residential construction loans, both of which carry a 50% rating. Most investment securities are assigned to the 20% category, except for municipal or state revenue bonds, which have a 50% rating, and direct
obligations of or obligations guaranteed by the United States Treasury or United States Government agencies, which have a 0% rating.

The federal bank
regulatory authorities have also implemented a leverage ratio, which is equal to Tier 1 capital as a percentage of average total assets less intangibles, to be used as a supplement to the risk-based guidelines. The principal objective of the
leverage ratio is to place a constraint on the maximum degree to which a bank holding company may leverage its equity capital base. The minimum required leverage ratio for top-rated institutions is 3%, but most institutions are required to maintain
an additional cushion of at least 100 to 200 basis points.

The FDIC Improvement Act established a new capital-based regulatory scheme designed to promote
early intervention for troubled banks which requires the FDIC to choose the least expensive resolution of bank failures. The new capital-based regulatory framework contains five categories of compliance with regulatory capital requirements,
including well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized. To qualify as a well capitalized
institution, a bank must have a leverage ratio of no less than 5%, a Tier 1 risk-based ratio of no less than 6%, and a total risk-based capital ratio of no less than 10%, and the bank must not be under any order or directive from the appropriate
regulatory agency to meet and maintain a specific capital level. Currently, we qualify as well capitalized.



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##### Table of Contents

SUPERVISION AND REGULATION (continued)



Bank of Walterboro(continued)



Under the FDIC Improvement Act regulations, the applicable agency can treat an institution as if it were in the next
lower category if the agency determines (after notice and an opportunity for hearing) that the institution is in an unsafe or unsound condition or is engaging in an unsafe or unsound practice. The degree of regulatory scrutiny of a financial
institution increases, and the permissible activities of the institution decreases, as it moves downward through the capital categories. Institutions that fall into one of the three undercapitalized categories may be required to do some or all of
the following:



| |  |  | submit a capital restoration plan;
| | - |  | ----------------------------------



| |  |  | raise additional capital;
| | - |  | -------------------------



| |  |  | restrict their growth, deposit interest rates, and other activities;
| | - |  | --------------------------------------------------------------------



| |  |  | improve their management;
| | - |  | -------------------------



| |  |  | eliminate management fees; or
| | - |  | -----------------------------



| |  |  | divest themselves of all or a part of their operations.
| | - |  | -------------------------------------------------------

Bank holding companies controlling financial institutions can be called upon to boost the institutions capital and to partially guarantee the institutions performance under their capital restoration plans.

These capital guidelines can affect us in several ways. If we grow at a rapid pace, our capital may be depleted too quickly, and a capital infusion from the holding
company may be necessary which could impact our ability to pay dividends. Our capital levels currently are adequate; however, rapid growth, poor loan portfolio performance, poor earnings performance, or a combination of these factors could change
our capital position in a relatively short period of time.

Failure to meet these capital requirements would mean that a bank would be required to develop
and file a plan with its primary federal banking regulator describing the means and a schedule for achieving the minimum capital requirements. In addition, such a bank would generally not receive regulatory approval of any application that requires
the consideration of capital adequacy, such as a branch or merger application, unless the bank could demonstrate a reasonable plan to meet the capital requirement within a reasonable period of time.

Enforcement Powers. The Financial Institution Report Recovery and Enforcement Act expanded and increased civil and criminal penalties available for
use by the federal regulatory agencies against depository institutions and certain institution-affiliated parties. Institution-affiliated parties primarily include management, employees, and agents of a financial institution, as well as
independent contractors and consultants such as attorneys and accountants and others who participate in the conduct of the financial institutions affairs. These practices can include the failure of an institution to timely file required
reports or the filing of false or misleading information or the submission of inaccurate reports. Civil penalties may be as high as $1,000,000 a day for such violations. Criminal penalties for some financial institution crimes have been increased to
20 years. In addition, regulators are provided with greater flexibility to commence enforcement actions against institutions and institution-affiliated parties. Possible enforcement actions include the termination of deposit insurance. Furthermore,
banking agencies power to issue cease-and-desist orders were expanded. Such orders may, among other things, require affirmative action to correct any harm resulting from a violation or practice, including restitution, reimbursement,
indemnification or guarantees against loss. A financial institution may also be ordered to restrict its growth, dispose of certain assets, rescind agreements or contracts, or take other actions as determined by the ordering agency to be appropriate.

Anti-Money Laundering.Financial institutions must maintain anti-money laundering programs that include established internal policies,
procedures, and controls; a designated compliance officer; an ongoing employee training program; and testing of the program by an independent audit function. The Company and the Bank are also prohibited from entering into specified financial
transactions and account relationships and must meet enhanced standards for due diligence and knowing your customer in their dealings with foreign financial institutions and foreign customers. Financial institutions must take reasonable
steps to conduct enhanced scrutiny of account relationships to guard against money laundering and to report any suspicious transactions, and recent laws provide



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##### Table of Contents

SUPERVISION AND REGULATION (continued)



Bank of Walterboro(continued)



law enforcement authorities with increased access to financial information maintained by banks. Anti-money laundering obligations have been substantially
strengthened as a result of the USA Patriot Act, enacted in 2001 and renewed in 2006. Bank regulators routinely examine institutions for compliance with these obligations and are required to consider compliance in connection with the regulatory
review of applications. The regulatory authorities have been active in imposing cease and desist orders and money penalty sanctions against institutions found to be violating these obligations.

USA PATRIOT Act/Bank Secrecy Act. The USA PATRIOT Act, amended, in part, the Bank Secrecy Act and provides for the facilitation of information sharing
among governmental entities and financial institutions for the purpose of combating terrorism and money laundering by enhancing anti-money laundering and financial transparency laws, as well as enhanced information collection tools and enforcement
mechanics for the U.S. government, including: (i) requiring standards for verifying customer identification at account opening; (ii) rules to promote cooperation among financial institutions, regulators, and law enforcement entities
in identifying parties that may be involved in terrorism or money laundering; (iii) reports by nonfinancial trades and businesses filed with the Treasury Departments Financial Crimes Enforcement Network for transactions exceeding $10,000;
and (iv) filing suspicious activities reports if a bank believes a customer may be violating U.S. laws and regulations and requires enhanced due diligence requirements for financial institutions that administer, maintain, or manage private bank
accounts or correspondent accounts for non-U.S. persons. Bank regulators routinely examine institutions for compliance with these obligations and are required to consider compliance in connection with the regulatory review of applications.

Under the USA PATRIOT Act, the FBI can send to the banking regulatory agencies lists of the names of persons suspected of involvement in terrorist
activities. The Bank can be requested to search its records for any relationships or transactions with persons on those lists. If the Bank finds any relationships or transactions, it must file a suspicious activity report and contact the
FBI.

The Office of Foreign Assets Control (OFAC), which is a division of the U.S. Department of the Treasury, is responsible for helping to
insure that United States entities do not engage in transactions with enemies of the United States, as defined by various Executive Orders and Acts of Congress. OFAC has sent, and will send, our banking regulatory agencies lists of
names of persons and organizations suspected of aiding, harboring or engaging in terrorist acts. If the Bank finds a name on any transaction, account or wire transfer that is on an OFAC list, it must freeze such account, file a suspicious
activity report and notify the FBI. The Bank has appointed an OFAC compliance officer to oversee the inspection of its accounts and the filing of any notifications. The Bank actively checks high-risk OFAC areas such as new accounts, wire
transfers and customer files. The Bank performs these checks utilizing software, which is updated each time a modification is made to the lists provided by OFAC and other agencies of Specially Designated Nationals and Blocked Persons.

Privacy and Credit Reporting. Financial institutions are required to disclose their policies for collecting and protecting confidential
information. Customers generally may prevent financial institutions from sharing nonpublic personal financial information with nonaffiliated third parties except under narrow circumstances, such as the processing of transactions requested by
the consumer. Additionally, financial institutions generally may not disclose consumer account numbers to any nonaffiliated third party for use in telemarketing, direct mail marketing or other marketing to consumers. It is the Banks
policy not to disclose any personal information unless required by law. The FDIC and the federal banking agencies have prescribed standards for maintaining the security and confidentiality of consumer information. The Bank is subject to
such standards, as well as standards for notifying consumers in the event of a security breach.

Like other lending institutions, the Bank utilizes credit
bureau data in its underwriting activities. Use of such data is regulated under the Federal Credit Reporting Act on a uniform, nationwide basis, including credit reporting, prescreening, sharing of information between affiliates, and the use of
credit data. The Fair and Accurate Credit Transactions Act of 2003 (the FACT Act) permits states to enact identity theft laws that are not inconsistent with the conduct required by the provisions of the FACT Act.



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##### Table of Contents

SUPERVISION AND REGULATION (continued)



Bank of Walterboro(continued)



Check 21. The Check Clearing for the 21st Century Act gives substitute checks, such as
a digital image of a check and copies made from that image, the same legal standing as the original paper check. Some of the major provisions include:



| |  |  | allowing check truncation without making it mandatory;
| | - |  | ------------------------------------------------------



| |  |  | demanding that every financial institution communicate to accountholders in writing a description of its substitute check processing program and their rights under
the law;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | legalizing substitutions for and replacements of paper checks without agreement from consumers;
| | - |  | -----------------------------------------------------------------------------------------------



| |  |  | retaining in place the previously mandated electronic collection and return of checks between financial institutions only when individual agreements are in place;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | requiring that when accountholders request verification, financial institutions produce the original check (or a copy that accurately represents the original) and
demonstrate that the account debit was accurate and valid; and
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | requiring the re-crediting of funds to an individuals account on the next business day after a consumer proves that the financial institution has erred.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------

Effect of Governmental Monetary Policies. Our earnings are affected by domestic economic conditions and the
monetary and fiscal policies of the United States government and its agencies. The Federal Reserve Banks monetary policies have had, and are likely to continue to have, an important impact on the operating results of commercial banks through
its power to implement national monetary policy in order, among other things, to curb inflation or combat a recession. The monetary policies of the Federal Reserve Board have major effects upon the levels of bank loans, investments and deposits
through its open market operations in United States government securities and through its regulation of the discount rate on borrowings of member banks and the reserve requirements against member bank deposits. It is not possible to predict the
nature or impact of future changes in monetary and fiscal policies.

Legislative Proposals. Proposed legislation, which could
significantly affect the business of banking, is introduced in Congress from time to time. Management of the Company cannot predict the future course of such legislative proposals or their impact on the Company and the Bank should they be adopted.

Employees

As of December 31, 2007, the Bank had
forty full-time and six part-time employees. The Company had no employees.



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##### Table of Contents

|Item 2. | Description of Property
|------- | -----------------------

The Company owns a 5,400 square
foot facility located at 1100 North Jefferies Boulevard, Walterboro, South Carolina, which is its corporate banking office. Construction on this facility was completed in 1989 at a total cost, including land, furniture and fixtures of $775,345. All
corporate headquarters as well as normal banking services and operations are housed at this location. The facility has a second floor which would allow for expansion consisting of 2,700 square feet. The existing building was built to adequately
serve the anticipated needs of the Bank for the foreseeable future.

The Company opened its second banking location at 6225 Savannah Highway, Ravenel,
South Carolina. This 3,622 square foot facility opened for business on October 6, 1997 and provides traditional banking services. The total cost of this facility, including land, and furniture and fixtures was $930,344.

The Company acquired a 5500 square foot building at 110 Forest Hills Road in Walterboro, South Carolina on November 16, 2000 and began using it as a branch location
in 2001. The total cost of the facility, including land, was $485,000.

The Company opened its fourth banking location at 398 East Main street Ridgeland,
South Carolina. This 3,800 square foot facility opened for business on December 6, 2004 and provides traditional banking services. The total cost of this facility, including land, and furniture and fixtures was $1,105,257.



|Item 3. | Legal Proceedings
|------- | -----------------

The Company may from time to time be a
party to various legal proceedings arising in the ordinary course of business, but management of the Company is not aware of any pending or threatened litigation or unasserted claims or assessments that are expected to result in losses, if any, that
would be material to the Companys business and operations.



|Item 4. | Submission of Matters to a Vote of Security Holders
|------- | ---------------------------------------------------

No
matter was submitted to a vote of security holders during the fourth quarter of the fiscal year covered by this report.

Part II



|Item 5. | Market for Common Equity and Related Stockholder Matters
|------- | --------------------------------------------------------

In
response to this Item, the information contained on page 49 of the Companys Annual Report to Shareholders for the year ended December 31, 2007 is incorporated herein by reference.



|Item 6. | Managements Discussion and Analysis or Plan of Operation
|------- | ---------------------------------------------------------

In response to this Item, the information contained on pages 8 through 24 of the Companys Annual Report to Shareholders for the year ended December 31, 2007 is incorporated herein by reference.



|Item 7. | Financial Statements
|------- | --------------------

In response to this Item, the
information contained on pages 26 through 47 of the Companys Annual Report to Shareholders for the year ended December 31, 2007 is incorporated herein by reference.



|Item 8. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|------- | ------------------------------------------------------------------------------------

N/A



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##### Table of Contents

|Item 8A. | Control and Procedures
|-------- | ----------------------

Evaluation of Disclosure Controls
and Procedures

The Companys Chief Executive Officer and acting Chief Financial Officer has evaluated the effectiveness of the Companys
disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the fiscal period ending December 31, 2007 covered by this Annual Report on Form 10-KSB. Based upon such evaluation, the Chief
Executive Officer and acting Chief Financial Officer has concluded that, as of the end of such period, the Companys disclosure controls and procedures were effective as required under Rules 13a-15(e) and 15d-15(e) under the Exchange Act. This
conclusion by the Companys Chief Executive Officer and acting Chief Financial Officer does not relate to reporting periods after December 31, 2007.

Managements Report on Internal Control Over Financial Reporting

Management is responsible for establishing and
maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) of the Company. Internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.

The Companys internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in
reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in
accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and
(iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Companys assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management, under the supervision of the Companys Chief Executive Officer and acting Chief Financial Officer, conducted an evaluation of the effectiveness of
internal control over financial reporting based on the framework in Internal ControlIntegrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management concluded that
the Companys internal control over financial reporting was effective as of December 31, 2007 under the criteria set forth in the in Internal ControlIntegrated Framework.

This annual report does not include an attestation report of the Companys registered public accounting firm regarding internal control over financial reporting.
Managements report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only managements report in this Annual Report on Form 10-KSB.

Changes in Internal Control Over Financial Reporting

No change in
the Companys internal control over financial reporting occurred during the quarter ended December 31, 2007, that materially affected, or is reasonably likely to materially affect, the Companys internal control over financial
reporting.



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##### Table of Contents

|Item 8B. | Other Information
|-------- | -----------------

No disclosure is required.

Part III



|Item 9. | Directors, Executive Officers, Promoters and Control Persons; Compliance with Section 16(a) of the Exchange Act
|------- | ---------------------------------------------------------------------------------------------------------------

In response to this Item, the information contained on pages 2 through 3 of the companys Proxy Statement for the Annual Meeting of Shareholders to be held on
April 29, 2008 is incorporated herein by reference.



|Item 10. | Executive Compensation
|-------- | ----------------------

In response to this Item, the
information contained on page 6 of the Companys Proxy Statement for the Annual Meeting of Shareholders to be held on April 29, 2008 is incorporated herein by reference.



|Item 11. | Security Ownership of Certain Beneficial Owners and Management
|-------- | --------------------------------------------------------------

In response to this Item, the information contained on page 5 of the Companys Proxy Statement for the Annual Meeting of Shareholders to be held on April 29, 2008 is incorporated herein by reference.



|Item 12. | Certain Relationships and Related Transactions
|-------- | ----------------------------------------------

In response
to this Item, the information contained on page 5 of the Companys Proxy Statement for the Annual Meeting of Shareholders to be held on April 29, 2008 is incorporated herein by reference.



|Item 13. | Exhibits, List and Reports on Form 8-K
|-------- | --------------------------------------

(a) The following
documents are filed as part of this report:



|     |  |                                                                                               
|---- |  | ----------------------------------------------------------------------------------------------
|13   |  | Annual Report of Shareholders for the year ended December 31, 2007 (Incorporated by reference)
|21.1 |  | Subsidiaries of the Company                                                                   
|31.1 |  | Rule 15d-14(a) Certifications                                                                 
|31.2 |  | Rule 15d-14(a) Certifications                                                                 
|32   |  | Section 1350 Certifications                                                                   

(b) Reports on Form 8-K

No reports on Form 8-K were filed during the fourth quarter of 2007.



|Item 14. | Principal Accountant Fees and Services.
|-------- | ---------------------------------------

In response to this
Item, the information contained on page 4 of the Companys Proxy Statement for the Annual Meeting of Shareholders to be held on April 29, 2008 is incorporated herein by reference.



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##### Table of Contents

SIGNATURES

In
accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



|                     |  |                    |  |                                      
|-------------------- |  | ------------------ |  | -------------------------------------
|                     |  | BANK OF WALTERBORO
|                     |  |                   
|Date: March 26, 2008 |  | By:                |  | /s/ W. Roger Crook                   
|                     |  |                    |  | W. Roger Crook                       
|                     |  |                    |  | President and Chief Executive Officer

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints W. Roger
Crook, his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-KSB, and
to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto attorney-in-fact and agent full power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that attorney-in-fact and agent, or his substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.

In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the
registrant in the capacities and on the dates indicated.



|                          |  |                                  |  |               
|------------------------- |  | -------------------------------- |  | --------------
|Signature                 |  | Title                            |  | Date          
|                          |  |                                 
|/s/ W. Roger Crook        |  |                                  |  |               
|W. Roger Crook            |  | President, Director (CEO)        |  | March 26, 2008
|                          |  |                                 
|/s/ Gwendolyn P. Bunton   |  |                                  |  |               
|Gwendolyn P. Bunton       |  | Vice President (CFO)             |  | March 26, 2008
|                          |  |                                 
|/s/ Peden B. McLeod       |  |                                  |  |               
|Peden B. McLeod           |  | Director & Chairman of the Board |  | March 26, 2008
|                          |  |                                 
|/s/ George W. Cone        |  |                                  |  |               
|George W. Cone            |  | Director & Corporate Secretary   |  | March 26, 2008
|                          |  |                                 
|/s/ J. Barnwell Fishburne |  |                                  |  |               
|J. Barnwell Fishburne     |  | Director                         |  | March 26, 2008
|                          |  |                                 
|/s/ Harry L. Hill         |  |                                  |  |               
|Harry L. Hill             |  | Director                         |  | March 26, 2008
|                          |  |                                 
|/s/ Steven D. Murdaugh    |  |                                  |  |               
|Steven D. Murdaugh        |  | Director                         |  | March 26, 2008
|                          |  |                                 
|/s/ Harold M. Robertson   |  |                                  |  |               
|Harold M. Robertson       |  | Director                         |  | March 26, 2008
|                          |  |                                 
|/s/ Calvert Huffines      |  |                                  |  |               
|Calvert Huffines          |  | Director                         |  | March 26, 2008



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##### Table of Contents

Index To Exhibits



|            |  |                                                                                               
|----------- |  | ----------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                   
|13          |  | Annual Report of Shareholders for the year ended December 31, 2007 (Incorporated by reference)
|            | 
|21.1        |  | Subsidiaries of the Company                                                                   
|            | 
|31.1        |  | Rule 15d-14(a) Certifications                                                                 
|            | 
|31.2        |  | Rule 15d-14(a) Certifications                                                                 
|            | 
|32          |  | Section 1350 Certifications                                                                   



18