October 13, 2005 Mail Stop 4561 James R. Clarkson President and Chief Executive Officer HCSB Financial Services Corporation 5201 Broad Street Loris, South Carolina 29569 Re:	HCSB Financial Services Corporation 		Form 10-KSB for the period ended December 31, 2004 		File No. 0-26995 Dear Mr. Clarkson: 	We have reviewed your September 21, 2005 response and have the following comments. Form 10-KSB for the period ended December 31, 2004 Financial Statements Note 7 - Derivative and Hedging Instruments, page 40 1. We note your supplemental response to comment 1 from our letter dated September 21, 2005. Please tell us whether your convertible advances automatically convert to a variable-rate when the FHLB exercises its option or if you must prepay the fixed-rate advance in cash unless you can negotiate a new advance. Provide us with the contractual excerpts that describe the conversion terms. 2. Please tell us how you considered the applicability of paragraph 68(d) of SFAS 133 since this paragraph specifically provides an exception for call and put rights that are mirrored and these instruments contain conversion features. Please respond to these comments within 10 business days or tell us when you will provide us with a response. Please file your response letter on EDGAR. Please understand that we may have additional comments after reviewing your responses to our comments. You may contact Sharon Johnson, Staff Accountant, at (202) 551- 3474 or me at (202) 551-3449 if you have questions. Sincerely, Joyce Sweeney 								Branch Chief ?? ?? ?? ?? James R. Clarkson HCSB Financial Services Corporation October 13, 2005 Page 1