Darlington County Bancshares (DLGB) 10QSB 2004 Q2 Quarterly report (small business)

U.S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-QSB

x QUARTERLY REPORT UNDER SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended June 30, 2004

OR

oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OFTHE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from _________to_________

Commission File No. 000-30001

DARLINGTON COUNTY BANCSHARES, INC.

(Exact Name of Registrant as Specified in the Charter)

South Carolina	57-0805621
(State or other jurisdiction	(I.R.S. Employer
of incorporation)	Identification No.)

202 Cashua Street

Darlington, S.C. 29532

(Address of Principal Executive Offices)

843.395.1956

(Registrant’s Telephone Number, including Area Code)

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 the past 90 days.

xYes  o No

State the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Common Stock - $.01 Par Value; 158,000 Shares Outstanding on July 31, 2004

DARLINGTON COUNTY BANCSHARES, INC.

Index

PART I. - FINANCIAL INFORMATION	Page No.
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets - June 30, 2004 and December 31, 2003	3
Condensed Consolidated Statements of Operations-
Six months ended June 30, 2004 and 2003 and three months ended June 30, 2004 and 2003	4
Condensed Consolidated Statements of Changes in Shareholders' Equity and Comprehensive Income -
Six months ended June 30, 2004 and 2003	5
Condensed Consolidated Statements of Cash Flows - Six months ended June 30, 2004 and 2003	6
Notes to Condensed Consolidated Financial Statements	7
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	8-11
Item 3. Controls and Procedures	12
PART II. - OTHER INFORMATION
Item 1. Legal Proceedings	13
Item 2. Changes in Securities	13
Item 3. Defaults Upon Senior Securities	13
Item 4. Submission of Matters to a Vote of Security Holders	13
Item 5. Other Information	13
Item 6. Exhibits and Reports on Form 8-K	13
(a) Exhibits	13
(b) Reports	13

DARLINGTON COUNTY BANCSHARES, INC.

Condensed Consolidated Balance Sheets

PART I - FINANCIAL INFORMATION

Item 1 - Financial Statements

	June 30,			December 31,
	2004			2003
(Dollars in thousands)	(Unaudited)
Assets
Cash and cash equivalents:
Cash and due from banks	$	1,333		$	1,378
Federal funds sold		2,783			1,368
Total cash and cash equivalents		4,116			2,746
Securities available-for-sale		10,565			11,065
Securities held-to-maturity		511			85
Nonmarketable equity securities		50			50
Total investment securities		11,126			11,200
Loans		19,707			20,543
Less allowance for loan losses		(221	)		(215	)
Loans, net		19,486			20,328
Premises and equipment, net		918			940
Accrued interest receivable		274			295
Other assets		214			134
Total assets	$	36,134		$	35,643
Liabilities
Deposits
Demand	$	5,752		$	6,384
Savings and NOW		20,995			19,256
Other time deposits		5,528			5,928
Total deposits		32,275			31,568
Accrued interest payable		23			23
Other liabilities		55			79
Total liabilities		32,353			31,670
Stockholders' equity
Common stock, $.01 par value, 1,000,000 shares authorized,
158,000 shares issued and outstanding at June 30, 2004
and December 31, 2003		2			2
Capital in excess of par value of stock		1,618			1,618
Retained earnings		2,377			2,355
Accumulated other comprehensive loss		(216	)		(2	)
Total stockholders' equity		3,781			3,973
Total liabilities and stockholders' equity	$	36,134		$	35,643

See notes to condensed consolidated financial statements.
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DARLINGTON COUNTY BANCSHARES, INC.

Condensed Consolidated Statements of Operations

(Unaudited)

	Six Months Ended				Three Months Ended
(Dollars in thousands)	June 30,				June 30,
	2004		2003		2004		2003
Interest income:
Loans, including fees	$	697	$	713	$	350	$	359
Investment securities:
Taxable		173		121		86		61
Nontaxable		10		13		6		6
Nonmarketable equity securities		1		-		1		-
Federal funds sold		15		20		7		9
Total interest income		896		867		450		435
Interest expense:
Deposits		164		186		79		93
Total interest expense		164		186		79		93
Net interest income		732		681		371		342
Provision for loan losses		36		42		18		24
Net interest income after provision for loan losses		696		639		353		318
Noninterest income:
Service charges on deposit accounts		170		162		81		81
Gains on sales of securities available-for-sale		-		20		-		20
Other service charges, commissions and fees		19		11		10		6
Total		189		193		91		107
Noninterest expenses:
Salaries and employee benefits		332		356		169		179
Net occupancy expense		40		41		20		22
Furniture and equipment expense		56		54		31		27
Other operating expenses		187		182		93		83
Total		615		633		313		311
Income before income taxes		270		199		131		114
Income tax provision		90		65		44		37
Net income	$	180	$	134	$	87	$	77
Per Share
Average shares outstanding		158,000		158,000		158,000		158,000
Net income	$	1.14	$	0.84	$	0.55	$	0.48
Dividends paid	$	1.00	$	1.00	$	1.00	$	1.00

See notes to condensed consolidated financial statements.
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DARLINGTON COUNTY BANCSHARES, INC.

Condensed ConsolidatedStatements of Stockholders' Equity and Comprehensive Income

For the six months ended June 30, 2004 and 2003

(Unaudited)

										Accumulated
										Other
					Additional					Comprehensive
	Common Stock				Paid-In		Retained			Income
(Dollars in thousands ,except shares)	Shares		Amount		Capital		Earnings			(Loss)				Total
Balance, December 31, 2002		158,000	$	2	$	1,618	$	2,260		$	67		$	3,947
Net income for the period								134						134
Other comprehensive loss, net of tax											(12	)		(12	)
Comprehensive income														122
Cash dividend ($1.00 per share)								(158	)					(158	)
Balance, June 30, 2003		158,000	$	2	$	1,618	$	2,236		$	55		$	3,911
Balance, December 31, 2003		158,000	$	2	$	1,618	$	2,355		$	(2	)	$	3,973
Net income for the period								180						180
Other comprehensive loss, net of tax											(214	)		(214	)
Comprehensive loss														(34	)
Cash dividend ($1.00 per share)								(158	)					(158	)
Balance, June 30, 2004		158,000	$	2	$	1,618	$	2,377		$	(216	)	$	3,781

See notes to condensed consolidated financial statements.
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DARLINGTON COUNTY BANCSHARES, INC.

Condensed ConsolidatedStatements of Cash Flows

(Unaudited)

	Six Months Ended
	June 30,
(Dollars in thousands)	2004			2003
Cash flows from operating activities:
Net income	$	180		$	134
Adjustments to reconcile net income to net cash
provided by operating activities:
Accretion less amortization on investments		26			-
Depreciation		43			40
Provision for loan losses		36			42
Gain on sales of securities available-for-sale		-			(20	)
(Increase) decrease in other assets		3			(39	)
Decrease in other liabilities		(24	)		(35	)
Net cash provided by operating activities		264			122
Cash flows from investing activities:
Proceeds from maturities of securities held-to-maturity		85			80
Proceeds from sales of investment securities available-for-sale		-			835
Proceeds from calls and maturities of securities available-for-sale		4,283			2,172
Purchase of investment securities available-for-sale		(4,084	)		(5,095	)
Purchase of investment securities held-to-maturity		(512	)		-
Net (increase) decrease in loans		806			(590	)
Purchase of equipment		(21	)		(2	)
Net cash provided by (used for) investing activities		557			(2,600	)
Cash flows from financing activities:
Net increase in deposit accounts		707			2,118
Cash dividends paid		(158	)		(158	)
Net cash provided for financing activities		549			1,960
Net increase (decrease) in cash and cash equivalents		1,370			(518	)
Cash and cash equivalents, beginning of period		2,746			3,530
Cash and cash equivalents, end of period	$	4,116		$	3,012
Supplemental disclosure of cash flow information
Decrease in net unrealized gains on securities available-for-sale	$	(214	)	$	(12	)
Cash paid for
Interest	$	163		$	190
Income taxes	$	45		$	76

See notes to condensed consolidated financial statements.
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DARLINGTON COUNTY BANCSHARES, INC.

Notes to CondensedConsolidated Financial Statements

(Unaudited)

Note 1 - Basis of Presentation

The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and item 310(b) of Regulation S-B of the Securities and Exchange Commission. Accordingly, they do not include all information and footnotes required by generally accepted accounting principles for complete financial statements. However, in the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included.

Note 2 - Net Income Per Share

Net income per share is computed on the basis of the weighted average number of common shares outstanding in accordance with Statement of Financial Accounting Standards No. 128, "Earnings per Share". Darlington County Bancshares, Inc. does not have any instruments which are dilutive; therefore, only basic net income per share of common stock is presented.

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DARLINGTON COUNTY BANCSHARES, INC.

Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following is a discussion of our financial condition as of June 30, 2004 compared to December 31, 2003, and the results of operations for the six and three months ended June 30, 2004 compared to the six and three months ended June 30, 2003. These comments should be read in conjunction with our condensed financial statements and accompanying notes appearing in this report and in conjunction with the financial statements and related notes and disclosures in our Annual Report on Form 10_KSB for the year ended December 31, 2003.

This report contains "forward-looking statements" relating to, without limitation, future economic performance, plans and objectives of management for future operations, and projections of revenues and other financial items that are based on the beliefs of our management, as well as assumptions made by and information currently available to our management. The words "expect," "estimate," "anticipate," and "believe," as well as similar expressions, are intended to identify forward-looking statements. Our actual results may differ materially from the results discussed in the forward-looking statements, and our operating performance each quarter is subject to various risks and uncertainties. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. In order to comply with terms of the safe harbor, we note that a variety of factors could cause our actual results and experience to differ materially from the anticipated results or other expectations expressed in our forward-looking statements. The risks and uncertainties that may affect the operations, performances, development and results of our business include, but are not limited to, the following: risks from changes in economic and industry conditions; changes in interest rates; risks inherent in making loans including repayment risks and value of collateral; dependence on senior management; and recently-enacted or proposed legislation. Statements contained in this filing regarding the demand for our products and services, changing economic conditions, interest rates, consumer spending and numerous other factors may be forward-looking statements and are subject to uncertainties and risks. When relying on forward-looking statements to make decisions with respect to us, investors and others are cautioned to consider these and other risks and uncertainties.

Such forward-looking statements speak only as of the date on which such statements are made. We undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made to reflect the occurrence of unanticipated events. In addition, certain statements in future filings by us with the Securities and Exchange Commission, in press releases and in oral and written statements made by or with the approval of us which are not statements of historical fact constitute forward-looking statements.

RESULTS OF OPERATIONS - SIX MONTHS ENDED JUNE 30, 2004

Our net income for the six months ended June 30, 2004 was $180,000 or $1.14 per share as compared to $134,000 or $0.84 per share for the six months ended June 30, 2003.

Net Interest Income

Net interest income is the difference between the interest earned on earning assets and the interest paid for funds acquired to support those assets. Net interest income, the principal source of our earnings, was $732,000 and $681,000 for the six months ended June 30, 2004 and 2003, respectively.

Changes that affect net interest income are changes in the average rate earned on interest-earning assets, changes in the average rate paid on interest-bearing liabilities, and changes in the volume of interest-earning assets and interest-bearing liabilities.

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DARLINGTON COUNTY BANCSHARES, INC.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations -continued

Net Interest Income -continued

Average interest-earning assets for the six months ended June 30, 2004 increased by $5,137,686 or 17.5% over the same period in 2003, while average interest-bearing liabilities increased by $3,891,586 or 17.0% comparing the six months ended June 30, 2004 and 2003.

	Average Balances, Income and Expenses, and Rates
	Six Months Ended June 30, 2004
	Average		Income/		Annualized
	Balance		Expense		Yield/Rate
Federal funds sold	$	3,278,132	$	15,000		0.92	%
Investment securities		11,244,386		184,000		3.28	%
Loans		19,976,971		697,000		7.00	%
Total earning assets	$	34,499,489		896,000		5.21	%
Total interest bearing liabilities	$	26,787,757		164,000		1.23	%
Net interest spread						3.98	%
Net interest income/margin			$	732,000		4.26	%

	Average Balances, Income and Expenses, and Rates
	Six Months Ended June 30, 2003
	Average		Income/		Annualized
	Balance		Expense		Yield/Rate
Federal funds sold	$	3,461,084	$	20,000		1.16	%
Investment securities		6,825,556		134,000		3.90	%
Loans		19,075,162		713,000		7.48	%
Total earning assets	$	29,361,802		867,000		5.91	%
Total interest bearing liabilities	$	22,896,171		186,000		1.62	%
Net interest spread						4.29	%
Net interest income/margin			$	681,000		4.64	%

As reflected above, for the first six months of 2004 the average yield on earning assets amounts amounted to 5.21%, while the average cost of interest-bearing liabilities was 1.23%. For the same period of 2003, the average yield on earning assets was 5.91% and the average cost of interest-bearing liabilities was 1.62%. The decrease in the yield on earning assets is attributable to a decrease in the yield on all interest earning assets. The net interest margin is computed by subtracting interest expense from interest income and dividing the resulting figure by average interest-earning assets. The net interest margin for the period ended June 30, 2004 was 4.26% and for 2003 was 4.64%.

Noninterest Income

Noninterest income for the six months ended June 30, 2004 and 2003 was $189,000 and $193,000, respectively. There were no gains on sales of securities during the six months ended June 30, 2004, while there were $20,000 of gains on sales of securities for the six months ended June 30, 2003. Service charges on deposit accounts increased $8,000 or 4.94% to $170,000 when comparing the six months ended June 30, 2004 to 2003.

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DARLINGTON COUNTY BANCSHARES, INC.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations -continued

Noninterest Expenses

Noninterest expenses for the six months ended June 30, 2004 and 2003 were $615,000 and $633,000, respectively. Noninterest expenses decreased primarily due to lower salaries and benefits, which were lower primarily as a result of the retirement of our former president at year end who was replaced by our executive vice president.

Provision for Loan Losses

The allowance for loan losses was 1.12% of loans as of June 30, 2004, compared to 1.05% at December 31, 2003. The provision for loan losses was $36,000 and $42,000 for the six months ended June 30, 2004 and 2003, respectively. Management reviews the adequacy of the allowance on an ongoing basis and believes the allowance is adequate.

Risks are inherent in making all loans, including risks with respect to the period of time over which loans may be repaid, risks resulting from changes in economic and industry conditions, risks inherent in dealing with individual borrowers, and, in the case of a collateralized loan, risks resulting from uncertainties about the future value of the collateral. We maintain an allowance for loan losses based on, among other things, historical experience, an evaluation of economic conditions, and regular reviews of delinquencies and loan portfolio quality. Our judgment about the adequacy of the allowance is based upon a number of assumptions about future events, which we believe to be reasonable, but which may not prove to be accurate. Thus, charge-offs in future periods could exceed the allowance for loan losses, or subst antial additional increases in the allowance for loan losses could be required. Additions to the allowance for loan losses would result in a decrease of our net income and, possibly, our capital. Based on present information, we believe the allowance for loan losses is adequate at June 30, 2004 to meet presently known and inherent risks in the loan portfolio.

RESULTS OF OPERATIONS - THREE MONTHS ENDED JUNE 30, 2004

Our net income for the second quarter of 2004 was $87,000 or $0.55 per share compared to $77,000 or $0.48 per share for the second quarter of 2003.

Net Interest Income

Net interest income is the difference between the interest earned on earning assets and the interest paid for funds acquired to support those assets. Net interest income, the principal source of our earnings, was $371,000 and $342,000 for the quarters ended June 30, 2004 and 2003, respectively.

Noninterest Income

Noninterest income for the three months ended June 30, 2004 and 2003 was $91,000 and $107,000, respectively. Noninterest income decreased from the prior year due to not having any gains on sales of securities for the quarter ended June 30, 2004, while there were $20,000 gains on sales of securities for the quarter ended June 30, 2003. Service charges on deposit accounts had no change for the three months ended June 30, 2003 compared to the same period in 2004.

Noninterest Expenses

Noninterest expenses for the three months ended June 30, 2004 and 2003 were $313,000 and $311,000, respectively. Noninterest expenses increased due to increased furniture and fixtures expense and other operating expenses, partially offset by decreases in salaries and employee benefits. These increases were due to the normal growth of our bank.

Provision for Loan Losses

The provision for loan losses was $18,000 and $24,000 for the three months ended June 30, 2004 and 2003, respectively.

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DARLINGTON COUNTY BANCSHARES, INC.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations -continued

FINANCIAL CONDITION

Liquidity

Liquidity is the ability to meet current and future obligations through liquidation or maturity of existing assets or the acquisition of liabilities. We manage both assets and liabilities to achieve appropriate levels of liquidity. Cash and short-term investments are our primary sources of asset liquidity. These funds provide a cushion against short-term fluctuations in cash flow from both deposits and loans. The investment portfolio is our principal source of secondary asset liquidity. However, the availability of this source of funds is influenced by market conditions. Management believes that our liquidity sources are adequate to meet our operating needs. However, we have approximately $2,500,000 of unused lines of credit to purchase federal funds should additional funding sources be needed.

Off-Balance Sheet Risk

Through the operations of our bank, we have made contractual commitments to extend credit in the ordinary course of our business activities. These commitments are legally binding agreements to lend money to our customers at predetermined interest rates for a specified period of time. At June 30, 2004, we had issued commitments to extend credit of $5,038,000 through various types of commercial lending arrangements. We evaluate each customer's credit worthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by us upon extension of credit, is based on our credit evaluation of the borrower. Collateral varies but may include accounts receivable, inventory, property, plant and equipment, and commercial and residential real estate. We manage the credit risk on these commitments by subjecting them to normal underwriting and risk management processes.

Investment Securities

Total investment securities decreased $74,000 during the first six months of 2004. This decrease was due to a decrease in securities available-for-sale of $500,000, partially offset by an increase in securities held-to-maturity of $426,000. Excess funds generated from deposit growth were invested in securities held-to-maturity.

Loans

Loans decreased slightly during the first six months of 2004. Net loans decreased $842,000 or 4.14%, during the period. As shown below, the main component of the decrease in the loan portfolio was real estate-mortgage loans which decreased $463,000, or 4.87%, from December 31, 2003 to June 30, 2004. Balances within the major loans receivable categories as of June 30, 2004 and December 31, 2003 are as follows:

	June 30,		December 31,
	2004		2003
Real estate - construction	$	1,382,000	$	1,231,000
Real estate - mortgage		9,048,000		9,511,000
Commercial and industrial		3,537,000		3,755,000
Agriculture		921,000		931,000
Consumer and other		4,819,000		5,115,000
	$	19,707,000	$	20,543,000

Deposits

Total deposits increased $707,000 or 2.24% to $32,275,000 during the first six months of 2004. The largest increase was in savings and NOW accounts which increased $1,739,000 to $20,995,000 at June 30, 2004. Money market accounts are included in this total and we believe we offer a higher interest rate on money market accounts than do our competitors. Money market accounts are an important source of our deposits and we anticipate continuing to offer competitive rates on such deposits in the near future.

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DARLINGTON COUNTY BANCSHARES, INC.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations -continued

Capital Resources

Our capital base decreased by $192,000 during the first six months of 2004. This net change includes an increase to equity for net income of $180,000 offset by a decrease in unrealized gains on investment securities of $214,000 and cash dividends paid of $158,000.

The Federal Deposit Insurance Corporation has issued guidelines for risk-based capital requirements. As of June 30, 2004, we exceed the capital requirement levels that are to be maintained.

						Well Capitalized Requirement					Adequately Capitalized Requirement
	Actual
( Dollars in thousands)	Amount		Ratio			Amount		Ratio			Amount		Ratio
Total capital (to risk-weighted assets)	$	4,218		18.04	%	$	2,339		10.0	%	$	1,871		8.0	%
Tier 1 capital (to risk weighted assets)	$	3,997		17.09	%	$	1,403		6.0	%	$	935		4.0	%
Tier 1 capital (to average assets)	$	3,997		10.92	%	$	1,830		5.0	%	$	1,464		4.0	%

Critical Accounting Policies

We have adopted various accounting policies which govern the application of accounting principles generally accepted in the United States in the preparation of our financial statements. Our significant accounting policies are described in the notes to the consolidated financial statements at December 31, 2003 as filed in our annual report on Form 10-KSB. Certain accounting policies involve significant judgments and assumptions by us which have a material impact on the carrying value of certain assets and liabilities. We consider these accounting policies to be critical accounting policies. The judgments and assumptions we use, which we believe to be reasonable under the circumstances, are based on the historical experience and other factors. Because of the nature of the judgments and assumptions we make, actual resul ts could differ from these judgments and estimates, which could have a major impact on our carrying values of assets and liabilities and our results of operations.

We believe the allowance for loan losses is a critical accounting policy that requires the most significant judgments and estimates used in preparation of our consolidated financial statements. Refer to the portions of our 2003 Annual Report on Form 10-KSB and this Form 10-QSB that address our allowance for loan losses for a description of our processes and methodology for determining our allowance for loan losses. There have been no significant changes in our critical accounting policies since December 31, 2003.

Effects of Regulatory Action

Our management is not aware of any current recommendations by regulatory authorities, which if they were to be implemented, would have a material effect on liquidity, capital resources, or operations.

Item 3.Controls and Procedures

Our management, with the participation of our chief executive officer and our chief financial officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in 17 C.F.R. Sections 240.13a-15(e) and 240.15d-15(e)) as of June 30, 2004, and, based on such evaluation, our chief executive officer and chief financial officer concluded that such controls and procedures were effective as of June 30, 2004.

There were no significant changes in our internal controls over financial reporting that occurred during the fiscal quarter ended June 30, 2004 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

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DARLINGTON COUNTY BANCSHARES, INC.

PARTII - OTHER INFORMATION

Item 1. Legal Proceedings

There are no material pending legal proceedings to which the Company or its subsidiary is a party to which any of their property is the subject.

Item 2. Changes in Securities and Small Business Issuer Purchases of Equity Securities

Not Applicable

Item 3. Defaults Upon Senior Securities

Not Applicable

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

The annual shareholders' meeting of Darlington County Bancshares, Inc. was held on April 20, 2004. Of the 158,000 outstanding shares, 80,798 were either voted in person or by proxy. At the meeting the following directors were elected for three-year terms:

	Number of Votes		Number of Votes		Number of Votes
	For		Against		Abstained
Raymond L. Galloway		80,478		-		320
R.E. Goodson, Sr.		80,368		-		430
Charles G. Howard		80,368		-		430

The Company has a "staggered" board of directors, and the following directors continued in office after the meeting: W. Edwin Dargan, Albert L. James, III, W.B. McCown, III, Hubert C. Baker, G. Clyde Scott, Eugene A. Vaughan, and Henry M. Funderburk, III.

Item 5. Other Information

None

Item 6. Exhibits and Report on Form 8-K

(a)    Exhibits 

31.1    Certification of CEO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2    Certification of CFO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1    Certification Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2    Certification Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(b) Reportson 8-K

 No reports on 8-K were filed during the quarter ended June 30, 2004.

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DARLINGTON COUNTY BANCSHARES, INC.

SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, the Bank has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

DARLINGTON COUNTY BANCSHARES, INC.

Name of Bank

By:/s/ Henry M. Funderburk	Date:   8/10/04
Henry M. Funderburk, President and
Chief Executive Officer
By:/s/ Ellen Berry	Date:   8/10/04
Ellen Berry
Vice President and Cashier (Controller)
Darlington County Bank
By:/s/ Charles A. Hardin	Date:   8/10/04
Charles A. Hardin, Vice President
Darlington County Bank
(Performing the Functions of Chief Financial Officer
of Darlington County Bancshares, Inc.)

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