Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934


	Filed by the Registrant ý
	Filed by a Party other than the Registrant o
	Check the appropriate box:
	ý		Preliminary Proxy Statement
	o		Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
	o		Definitive Proxy Statement
	o		Definitive Additional Materials
	o		Soliciting Material Pursuant to Section 240.14a-12


HCSB Financial Corporation
(Name of Registrant as Specified in Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of filing fee (Check the appropriate box):
ý	No fee required.
o	Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
	(1)	Title of each class of securities to which transaction applies:
	(2)	Aggregate number of securities to which transaction applies:
	(3)	Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
	(4)	Proposed maximum aggregate value of transaction:
	(5)	Total fee paid:
o	Fee paid previously with preliminary materials.
o	Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
	(1)	Amount Previously Paid:
	(2)	Form, Schedule or Registration Statement No.:
	(3)	Filing Party:
	(4)	Date Filed:

You are cordially invited to attend the 2009 Annual Meeting of Shareholders of HCSB Financial Corporation, the holding company for Horry County State Bank. This letter serves as your official notice that the annual meeting will be held on April 23, 2009 at 7:00 p.m. at the Center for Health and Fitness at 3207 Casey Street, Loris, South Carolina, for the following purposes:

Shareholders owning our common stock at the close of business on February 27, 2009 are entitled to attend and vote at the meeting. A complete list of shareholders will be available at the Company's offices prior to the meeting. At the meeting, we will report on our performance in 2008 and answer your questions. We are excited about our accomplishments in 2008 and look forward to discussing both our accomplishments and our plans with you. We hope that you can attend the meeting and look forward to seeing you there.

Please use this opportunity to take part in the affairs of your Company by voting on the business to come before this meeting. Even if you plan to attend the meeting, we encourage you to complete and return the enclosed proxy to us as promptly as possible.

PROXY STATEMENT FOR THE ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD ON APRIL 23, 2009

Our Board of Directors is soliciting proxies for the 2009 Annual Meeting of Shareholders. This proxy statement contains important information for you to consider when deciding how to vote on the matters brought before the meeting. We encourage you to read it carefully.

The Board set February 27, 2009 as the record date for the meeting. Shareholders owning our common stock at the close of business on that date are entitled to attend and vote at the meeting, with each share entitled to one vote. There were 3,787,170 shares of common stock outstanding on the record date. A majority of the outstanding shares of common stock entitled to vote at the meeting will constitute a quorum. We will count abstentions and broker non-votes, which are described below, in determining whether a quorum exists.

Many of our shareholders hold their shares through a stockbroker, bank, or other nominee rather than directly in their own name. If you hold our shares in a stock brokerage account or by a bank or other nominee, you are considered the beneficial owner of shares held in street name, and these materials are being forwarded to you by your broker or nominee, which is considered the shareholder of record with respect to those shares. As the beneficial owner, you have the right to direct your broker or nominee how to vote and are also invited to attend the annual meeting. However, since you are not the shareholder of record, you may not vote these shares in person at the meeting unless you obtain a signed proxy from the shareholder of record giving you the right to vote the shares. Your broker or nominee has enclosed or provided a voting instruction card for you to use to direct your broker or nominee how to vote these shares.

When you sign the proxy card you appoint Tommie W. Grainger and Gwyn G. McCutchen as your representatives at the meeting. Mr. Grainger and Mr. McCutchen will vote your proxy as you have instructed them on the proxy card. If you submit a proxy but do not specify how you would like it to be voted, Mr. Grainger and Mr. McCutchen will vote your proxy for the election to the Board of Directors of all nominees listed below under "Election of Directors;" the ratification of the selection of our independent public accountants for the year ending December 31, 2009; and the resolution approving the compensation of the Company's named executive officers as determined by the Compensation Committee. We are not aware of any other matters to be considered at the meeting. However, if any other matters come before the meeting, Mr. Grainger and Mr. McCutchen will vote your proxy on such matters in accordance with their judgment.

A majority or more of the outstanding shares of common stock entitled to vote at the meeting will constitute a quorum. We will include abstentions and broker non-votes in determining whether a quorum exists. Assuming in each case that a quorum is present:

You may revoke your proxy and change your vote at any time before the polls close at the meeting. You may do this by signing and delivering another proxy with a later date or voting in person at the meeting. Brokers who hold shares for the accounts of their clients may vote these shares either as directed by their clients or in their own discretion if permitted by the exchange or other organization of which they are members. Proxies that brokers do not vote on some proposals but that they do vote on others are referred to as "broker non-votes" with respect to the proposal for which the broker has no discretionary voting authority. In addition, if a shareholder abstains from voting on a particular proposal, the abstention does not count as a vote in favor of or against the proposal.

We are paying for the costs of preparing and mailing the proxy materials and of reimbursing brokers and others for their expenses of forwarding copies of the proxy materials to our shareholders. Our officers and employees may assist in soliciting proxies but will not receive additional compensation for doing so. We are distributing this proxy statement on or about March 17, 2009.

Important Notice of Internet Availability. The proxy statement and 2008 Annual Report on Form 10-K, and the 2008 Annual Report Overview are available to the public for viewing on the Internet at http://materials.proxyvote.com/40413R.

In addition, the above items and other SEC filings are also available to the public on the SEC's website on the Internet at www.sec.gov. Upon written or oral request by any shareholder, we will deliver a copy of our Form 10-K. In addition, upon written or oral request, we will also promptly deliver a copy of this proxy statement or the enclosed overview to our shareholders at a shared address to which a single copy of the document was delivered.

The Board of Directors is divided into three classes with staggered terms, so that the term of only approximately one-third of the Board members expires at each annual meeting. The current terms of the Class I directors will expire at this Annual Shareholders Meeting. The terms of the Class II directors will expire at the 2010 Annual Shareholders Meeting. The terms of the Class III directors will expire at the 2011 Annual Shareholders Meeting. Our directors and their classes are:

Class I	Class II	Class III

D. Singleton Bailey	Clay D. Brittain, III	Johnny C. Allen
Franklin C. Blanton	Michael S. Addy	Russell R. Burgess, Jr.
Rachel B. Broadhurst	James R. Clarkson	Larry G. Floyd
T. Freddie Moore	J. Lavelle Coleman	Tommie W. Grainger
Carroll D. Padgett, Jr.	Boyd R. Ford, Jr.	Gwyn G. McCutchen, D.D.S.

Shareholders will elect five nominees as Class I directors at the meeting to serve a three-year term, expiring at the 2012 Annual Meeting of Shareholders. The directors will be elected by a plurality of the votes cast at the meeting. This means that the five nominees receiving the highest number of votes will be elected.

The Board of Directors recommends that you elect D. Singleton Bailey, Franklin C. Blanton, Rachel B. Broadhurst, T. Freddie Moore and Carroll D. Padgett, Jr. as Class I directors.

If you submit a proxy but do not specify how you would like to be voted, Mr. Grainger and Mr. McCutchen will vote your proxy to elect Mr. Bailey, Mr. Blanton, Ms. Broadhurst, Mr. Moore and Mr. Padgett. If any of these nominees is unable or fails to accept nomination or election (which we do not anticipate), Mr. Grainger and Mr. McCutchen will vote instead for a replacement to be recommended by the Board of Directors, unless you specifically instruct otherwise in the proxy.

D. Singleton Bailey, 58, has served as a director of the Company since its formation in 1999 and of the Bank since 1987. Mr. Bailey has been the President of Loris Drug Store, Inc., located in Loris, S.C. since 1988. He received a B.A. degree in sociology from Wofford College in 1972. Mr. Bailey now serves as the Secretary of the Board of Directors of the Company and the Bank.

Franklin C. Blanton, 64, has served as a director of the Company since its formation in 1999 and the Bank since 1987. Mr. Blanton has been the President of Blanton Supplies, Inc. in Loris, S.C. since 1981 and of Blanton Supplies in Little River, Inc., in Little River, S.C. since 1985. He presently serves as director of Loris Healthcare System, Inc., Horry Electric Cooperative, Inc. and the Coastal Carolina University Education Foundation. Mr. Blanton is a past Chairman of the Horry County Board of Education and also a past President of the Independent Builders Supply, Inc. He received his B.S. degree in Business Administration from Campbell University in 1968.

Rachel B. Broadhurst, 67, has been President of Century 21 Broadhurst & Associates, Inc. and of Barefoot Vacations, Inc. in Myrtle Beach, S.C., since 1974. Ms. Broadhurst is a former member of the Myrtle Beach City Council and a former Chairperson of the Myrtle Beach Board of Adjustments and Planning and Zoning Board of Appeals. She is a member of the Board of Directors of the Rivoli Theatre, a member of the Myrtle Beach Rotary Club and the Myrtle Beach Chamber of Commerce and has served on the Chamber's Board of Directors. Ms. Broadhurst is a past President of the Myrtle Beach Pilot Club and a past President of the Myrtle Beach Business and Professional Women's Club. She is a former member of the Horry County Cancer Society and served as President and Chairperson of the Board of Directors for this organization. Ms. Broadhurst is also a former member of the Ocean View Memorial Foundation. Ms. Broadhurst has served as a director of the Company and of the Bank since 2006.

T. Freddie Moore, 68, has served as a director of the Company since its formation in 1999 and of the Bank since 1987. Mr. Moore is retired from Gateway Drug Store, Inc., in Loris, S.C. He received his B.S. degree in Pre-Medicine from The Citadel in 1963 and a B.S. degree in Pharmacy in 1966 from the Medical University of South Carolina.

Carroll D. Padgett, Jr., 61, has served as a director of the Company since its formation in 1999 and of the Bank since 1987. Mr. Padgett has been a practicing attorney at Carroll D. Padgett, Jr., P.A. in Loris. Mr. Padgett received his B.S. degree in Political Science from the University of Georgia in 1969 and received his Juris Doctorate from the University of South Carolina Law School in 1972. He has served as the attorney for the City of Loris since 1977 and for the Loris Healthcare System, Inc. since 1976.

The board unanimously recommends a vote FOR each of these nominees.

Set forth below is also information about each of the Company's other directors and each of its executive officers. Each of the following directors is also a director of our bank.

Michael S. Addy, 57, has been President of Addy's Harbor Dodge, Inc. and MSA, Inc. in Myrtle Beach, S.C., since 1990, and is Managing Member of Addy's Limited Liability Company. Mr. Addy received his B.S. degree in Business Administration from the University of South Carolina in 1973. He is a member of the Myrtle Beach Sertoma Club and serves as the Treasurer of the Carolinas Dodge Dealers Advertising Association. Mr. Addy has served as a director of the Company and of the Bank since 2006.

Johnny C. Allen, 62, has served as a director of the Company and of the Bank since 2002. Mr. Allen served as the Horry County Treasurer from 1983 until his retirement in 2005. He attended the University of South Carolina. Mr. Allen presently serves as Vice Chairman of the Board of Directors of both the Company and the Bank.

Clay D. Brittain, III, 54, has served as a director of the Company and of the Bank since 2002. Mr. Brittain received his B.A. degree in Economics from Wofford College in 1977 and received his Juris Doctorate from the University of South Carolina Law School in 1980. He is an attorney in the firm of Thompson & Henry, PA in Myrtle Beach, S.C. Mr. Brittain presently serves as Chairman of the Board of Directors of both the Company and the Bank.

Glenn R. Bullard, 59, is the Senior Executive Vice President of the Company and of the Bank. He served as Vice President and Manager of our Little River office from February 1997 through December 1999. Mr. Bullard received his B.S. degree in Business Administration from the University of South Carolina in 1977. Mr. Bullard has served as an executive officer of the Company and of the Bank since 2000.

Russell R. Burgess, Jr., 66, has served as a director of the Company since its formation in 1999 and of the Bank since 1998. Mr. Burgess has been the owner of Aladdin Realty Company in North Myrtle Beach, S.C. since 1980 and also the owner and broker-in-charge of Burgess Realty & Appraisal Service in North Myrtle Beach S.C. since 1990. He is a former member of the North Myrtle Beach City Council. He also serves on the Board of Directors of Beechwood Golf Club and on the Board of Directors of the North Myrtle Beach Chamber of Commerce. Mr. Burgess received a B.S. degree in Biology from Campbell University in 1966.

James R. Clarkson, 57, has served as President, Chief Executive Officer and director of the Company since its formation in 1999 and of the Bank since 1987. He received his B.A. degree in Economics from Clemson University in 1973. He is a 1985 graduate of the Graduate School of Banking at Louisiana State University, where he presently serves on the faculty. Mr. Clarkson is also an instructor and a course coordinator for the South Carolina Bankers School and past chairman of the school. He presently serves as a director of Horry Telephone Cooperative, Inc., a member of the Loris

Healthcare System's Strategic Planning Committee and a member of the South Carolina Bankers Employee Benefit Trust.

J. Lavelle Coleman, 69, has served as a director of the Company since its formation in 1999 and of the Bank since 1987. Mr. Coleman is retired from Tabor City Oil Co., Inc. in Tabor City, N.C. He attended East Carolina University.

Denise Floyd, 54, is the Senior Vice President and Personnel Officer of the Bank and the Senior Vice President and Assistant Secretary of the Company. She joined the Bank in 1997 as Administrative Assistant to the President and Chief Executive Officer. She had eleven years of banking experience prior to joining the Bank.

Larry G. Floyd, 68, has served as director of the Company and of the Bank since 2002. He attended the University of South Carolina and the Ringling School of Art in Sarasota, Florida. Mr. Floyd is retired from Floyd's Insulation, Inc. and Cherry Grove Sales, Inc. in North Myrtle Beach, S.C.

Boyd R. Ford, Jr., 69, has served as a director of the Company since its formation in 1999 and of the Bank since 1987. He received his B.S. degree in Business Administration from the University of South Carolina in 1962. Mr. Ford is retired from Ford Fuel Services, Inc. and Ford's Propane Gas, Inc. in Loris, S.C.

Tommie W. Grainger, 70, has served as a director of the Company since its formation in 1999 and of the Bank since 1998. He graduated from the Forest Ranger School of the University of Florida in 1959 with an associates degree in Forestry. Mr. Grainger has been the President of Coastal Timber Co., Inc. in Conway, S.C. since 1966.

Edward L. Loehr, Jr., 55, is the Senior Vice President and Chief Financial Officer of the Company and of the Bank. He joined the Bank on January 1, 2008. He had twenty-four years of banking experience prior to joining the Bank. He received his B.S. degree in Business Administration from the University of South Carolina in 1983.

Gwyn G. McCutchen, D.D.S., 64, has served as a director of the Company since its formation in 1999 and of the Bank since 1987. Dr. McCutchen received his B.S. degree in Biology in 1966 from Presbyterian College and his D.D.S. from the Medical College of Virginia Dentistry in 1970. Dr. McCutchen has been a dentist in Loris, S.C. since 1970.

PROPOSAL NO 2:
RATIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

On February 23, 2009, the Audit Committee of the Board of Directors appointed Elliott Davis, LLC as our independent registered public accounting firm for the year ending December 31, 2009. Although we are not required to seek shareholder ratification in the selection of our accountants, we believe obtaining shareholder ratification is desirable. If the shareholders do not ratify the appointment of Elliott Davis, the audit committee will re-evaluate the engagement of our independent auditors. Even if the shareholders do ratify the appointment, our audit committee has the discretion to appoint a different independent registered public accounting firm at any time during the year if the audit committee believes that such a change would be in the best interest of us and our shareholders. We expect that a representative of Elliott Davis will attend the meeting and will be available to respond to appropriate questions from shareholders.

The board unanimously recommends that shareholders vote FOR the ratification of the appointment of Elliott Davis, LLC as our independent registered public accounting firm for the year ending December 31, 2009.

If a quorum is present, the proposal will be approved if the number of shares of common stock voted in favor of the matter exceed the number of shares of common stock voted against the matter. Abstentions, broker non-votes, and the failure to return a signed proxy will have no effect on the outcome of the vote on this matter.

PROPOSAL NO. 3:
NON-BINDING RESOLUTION TO APPROVE THE COMPENSATION
OF THE NAMED EXECUTIVE OFFICERS

This proposal, commonly known as a "say-on-pay" proposal, gives the Company's shareholders the opportunity to endorse or not endorse the Company's executive pay program and policies through the following resolution:

"Resolved, that the shareholders approve the compensation of the named executive officers, as disclosed in the Summary Compensation Table and in the other tables and related discussion included in this proxy statement."

We believe that our compensation policies and procedures are competitive and focused on performance and are strongly aligned with the long-term interest of our shareholders. We encourage you to review our discussion and the tables included in this proxy statement. Recent legislation and new regulations will impact our compensation practices because we sold preferred stock to the United States Treasury in the first quarter of 2009 under its Capital Purchase Program. Key details of these new laws will be determined only after the Treasury and the SEC issue new regulations. As a result, we cannot reliably predict what changes we will be required to make to our compensation programs, if any. We will fully comply with all applicable requirements as they become known to us and as long as the preferred stock, under the Capital Purchase Program, is outstanding.

Under the America Recovery and Reinvestment Act of 2009, your vote is advisory and will not be binding upon our board of directors. However, the compensation committee will take into account the outcome of the vote when considering future executive compensation arrangements.

The board unanimously recommends a vote FOR approval of the compensation of the named executive officers.

The following table shows the compensation we paid for the years ended December 31, 2008 and 2007 to our chief executive officer and the two other most highly compensated executive officers that earned over $100,000 for the years ended 2008 and 2007 (collectively, the "named executive officers").

Names and Principal Position			Salary		Bonus		Option Awards			Non Equity Incentive Plan Compensation			All Other Compensation			Total

James R. Clarkson		2008	$	215,000	$	4,135	$	9,528	(1)	$	487	(2)	$	21,078	(3)	$	250,228
	President and Chief	2007	$	207,240	$	18,985	$	44,717	(1)	$	0	(2)	$	20,289	(3)	$	246,514
	Executive Officer of the
	Company and the Bank

Glenn R. Bullard		2008	$	160,000	$	3,068	$	5,295	(1)	$	967	(2)	$	12,567	(4)	$	181,897
	Senior Executive Vice	2007	$	153,300	$	10,948	$	23,732	(1)	$	2,575	(2)	$	11,827	(4)	$	199,807
	President of the Company
	and the Bank

Ron L. Paige, Sr.		2008	$	155,500	$	2,990	$	19,949	(1)	$	2,377	(2)	$	12,362	(5)	$	193,178
	Executive Vice President-	2007	$	146,250	$	10,812	$	19,935	(1)	$	3,656	(2)	$	11,504	(5)	$	192,157
	Myrtle Beach Region

	Option Awards									Stock Awards

Name	Number of Securities Underlying Unexercised Options Exercisable		Number of Securities Underlying Unexercised Options Unexercisable			Option Exercise Price ($)		Option Expiration Date		Number of Shares or Units of Stock That Have Not Vested			Market Value of Shares or Units of Stock That Have Not Vested ($)
James R. Clarkson		8,624		—			12.50		2/23/14		11,431	(2)		288,518	(3)
		5,449		1,363	(1)		17.00		2/17/15		—			—
Glenn R. Bullard		4,348		—			12.50		2/23/14		6,017	(2)		151,869	(3)
		3,028		758	(1)		17.00		2/17/15		—			—
Ron L. Paige, Sr.		3,942		—			12.50		2/23/14		5,282	(2)		133,318	(3)
		2,556		640	(1)		17.00		2/17/15		—			—

Neither the Company nor the Bank has entered into any employment agreements with any of our officers or employees.

In February 1997, the Bank established a Deferred Compensation Plan for its directors, which applies to Mr. Clarkson. Under the terms of this plan, a director may choose to defer payment of all or a portion of his director and committee fees until the director's termination of service from the Board of Directors. Also the Bank has established a 401(k) retirement plan for all eligible full-time employees. Under the terms of this plan the Bank will match contributions up to 4.0% of an eligible employee's salary.

During the year ended December 31, 2008, directors received fees of $500 per month, and outside directors received an additional $200 fee for each applicable committee meeting attended. The Bank has established a Deferred Compensation Plan for its directors to defer payment of all or a portion of his or her director and committee fees until the director's termination of service from the Board of Directors.

Name

Michael S. Addy	10,400	10,400
Johnny C. Allen	10,000	10,000
D. Singleton Bailey	8,600	8,600
Franklin C. Blanton	10,000	10,000
Clay D. Brittain, III	8,400	8,400
Rachel B. Broadhurst	8,600	8,600
Russell R. Burgess, Jr.	8,600	8,600
James R. Clarkson	6,000	6,000
J. Lavelle Coleman	7,800	7,800
Larry G. Floyd	9,000	9,000
Boyd R. Ford, Jr.	7,200	7,200
Tommie W. Grainger	10,800	10,800
Gwyn G. McCutchen, D.D.S.	8,000	8,000
T. Freddie Moore	7,600	7,600
Carroll D. Padgett, Jr.	8,200	8,200

The following table shows how much common stock is owned by our directors and executive officers and by owners of more than 5% of the outstanding common stock, as of March 3, 2009. The mailing address for each beneficial owner is care of HCSB Financial Corporation, P.O. Box 218, Loris, South Carolina, 29569. Unless otherwise indicated in footnotes, the named person has sole voting and investment power, has shared voting and investment power, or holds in an IRA or other retirement plan program.

Name			Percentage of Beneficial Ownership(2)

Michael S. Addy	5,060		*
Johnny C. Allen	3,753		*
D. Singleton Bailey	45,837		1.21%
Franklin C. Blanton	88,248		2.33%
Clay D. Brittain, III	5,659		*
Rachel B. Broadhurst	160		*
Glenn R. Bullard(3)	13,724	7,376	*
Russell R. Burgess, Jr.	5,872		*
James R. Clarkson(4)	40,159	14,073	1.43%
J. Lavelle Coleman	18,215		*
Denise Floyd(5)	6,818	1,723	*
Larry G. Floyd	10,758		*
Boyd R. Ford, Jr.	115,495		3.05%
Tommie W. Grainger	54,072		1.43%
Edward L. Loehr, Jr.	0		*
Gwyn G. McCutchen, D.D.S.	32,959		*
T. Freddie Moore	18,941		*
Carroll D. Padgett, Jr.	31,148		*
Executive officers and directors as a group (18 persons)	496,878	23,172	13.73%

During the year ended December 31, 2008, the Board of Directors of the Company held eleven meetings and the Board of Directors of the Bank held twelve meetings. All of the directors of the Company and of the Bank attended at least 75% of the aggregate of such board meetings and the meetings of each committee on which they serve, except Carroll D. Padgett, Jr., who attended 70.0%.

The Company has a formal policy of corporate governance principles, which sets forth that directors are expected to attend the annual meeting of shareholders of HCSB Financial Corporation. Fourteen of our directors attended the 2008 annual meeting of shareholders.

Our Board of Directors has implemented a process for shareholders of the Company to send communications to the Board. Any shareholder desiring to communicate with the Board, or with specific individual directors, may do so by writing to the secretary of the company, at HCSB Financial Corporation, P.O. Box 218, Loris, South Carolina, 29569. The secretary has been instructed by the Board to promptly forward all such communications to the addressees indicated thereon.

Our Board of Directors has determined that Michael S. Addy, Johnny C. Allen, D. Singleton Bailey, Franklin C. Blanton, Clay D. Brittain, III, Rachel B. Broadhurst, Russell R. Burgess, Jr., J. Lavelle Coleman, Larry G. Floyd, Boyd R. Ford, Jr., Tommie W. Grainger, Gwyn G. McCutchen, D.D.S., T. Freddie Moore and Carroll D. Padgett, Jr. are "independent" directors, based upon the independence criteria set forth in the corporate governance listing standards of The NASDAQ Global Market, the exchange that we selected in order to determine whether our directors and committee members meet the independence criteria of a national securities exchange, as required by Item 407(a) of Regulation S-K.

The Board of Directors of the Company has appointed an Audit Committee. The Audit Committee has the responsibility of reviewing the Company's financial statements, evaluating internal accounting controls, reviewing reports of regulatory agencies and the Bank's internal auditor and determining that all audits and examinations required by law are performed. The Committee reports its finding to the Board of Directors. The Audit Committee also recommends to the Board of Directors the appointment of the independent accounting firm. During 2008, the Audit Committee met four times. The current members of the Audit Committee are Michael S. Addy, D. Singleton Bailey, J. Lavelle Coleman, Larry G. Floyd, Boyd R. Ford, Jr. and T. Freddie Moore. Each of these members is considered independent, as contemplated in the listing standards of the NASD and The NASDAQ Global Market. The Board of Directors has adopted an Audit Committee charter, which was attached as Exhibit A to the proxy statement for the 2008 annual meeting of shareholders.

None of the current members of the Audit Committee nor any other member of our Board qualifies as an "Audit Committee Financial Expert" as defined under the rules of the Securities and Exchange Commission. As a relatively small public company, it is difficult to identify potential qualified candidates that are willing to serve on our Board and otherwise meet our requirements for service. At present, we do not know if or when we will appoint a new board member who qualifies as an Audit Committee Financial Expert.

Although none of the members of our Audit Committee qualify as "financial experts" as defined in the SEC rules, each of our Audit Committee members has made valuable contributions to the Company and its shareholders as members of the Audit Committee. The board has determined that each member is fully qualified to monitor the performance of management, the public disclosures by

the Company of its financial condition and performance, our internal accounting operations, and our independent auditors.

The report of the Audit Committee shall not be deemed incorporated by reference by any general statement incorporating by reference this proxy statement into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that the company specifically incorporates the information contained in the report by reference, and shall not be deemed under such acts.

The Audit Committee has reviewed and discussed with management the audited financial statements. The Audit Committee has discussed with the independent auditors the matters required to be discussed by the Statement on Auditing Standards No. 61. The Audit Committee has received from the independent auditors the written disclosures and the letters required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant's communications with the audit committee concerning independence and has discussed with the independent auditor's independence from the Company and its management. In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Company's Board of Directors that the audited financial statements be included in the Company's Annual Report on SEC Form 10-K for the fiscal year ended December 31, 2008 for filing with the SEC.

The report of the Audit Committee is included herein at the direction of its members, Michael S. Addy, D. Singleton Bailey, J. Lavelle Coleman, Larry G. Floyd, Boyd R. Ford, Jr. and T. Freddie Moore.

The Board of Directors has appointed a Compensation Committee. The Compensation Committee has a charter, which was attached to our proxy statement for the 2008 annual shareholders meeting. This committee evaluates the performance of our chief executive officer and determines his compensation, including grants, awards, and bonuses under incentive compensation plans. Our chief executive officer is responsible for determining the compensation of our other executive officers and the management group. The Compensation Committee administrates the Company's stock option plans and makes recommendations to the Board of Directors as to incentive compensation plans and equity-based plans, including awards and grants with each plan. In addition, the Compensation Committee is responsible for the establishment of policies dealing with various compensation and employee benefit matters for the Company. The Compensation Committee must meet at least semiannually to discuss and evaluate employee compensation plans in light of an assessment of any risk posed to the Company from such plans. The Compensation Committee must also certify that it has reviewed the senior executive officers' compensation arrangements to ensure that there are no incentives to take unnecessary or excessive risks that threaten the value of the Company.

The Compensation Committee currently consists of Michael S. Addy, Johnny C. Allen, Russell R. Burgess, Jr., Tommie W. Grainger, Gwyn G. McCutchen, D.D.S., and Carroll D. Padgett, Jr. Each of these members is considered independent, as contemplated in the listing standards of the NASD and The NASDAQ Global Market. During 2008, the Compensation Committee met two times. Our Board of Directors has adopted a Compensation Committee Charter.

The Board of Directors has appointed a Nominating Committee. The Nominating Committee has a Nominating and Corporate Governance Charter, which was included as Exhibit B in the Proxy Statement for the 2008 Annual Meeting of Shareholders. The Nominating Committee's primary

purposes are to (1) identify, screen, recruit and nominate director candidates to the Board; (2) develop, recommend and oversee corporate governance policies of the Company; and (3) establish and administer processes to evaluate the effectiveness of the board, committees and management. The Nominating Committee currently consists of D. Singleton Bailey, Franklin C. Blanton, Rachel B. Broadhurst, Russell R. Burgess, Jr., Gwyn G. McCutchen, D.D.S. and T. Freddie Moore. Each of these members is considered independent, as contemplated in the listing standards of the NASD and The NASDAQ Global Market. The Nominating Committee met two times during 2008.

Our Nominating Committee will consider director candidates recommended by shareholders who submit nominations in accordance with our bylaws. Shareholders must deliver nominations in writing to the secretary of the Company no later than (i) with respect to an election to be held at an annual meeting of shareholders, 90 days in advance of such meeting; and (ii) with respect to an election to be held at a special meeting of shareholders for the election of directors, seven days after notice of the special meeting is given to shareholders. Each notice must set forth: (i) the name and address of the shareholder who intends to make the nomination and of the person or persons to be nominated; (ii) a representation that the shareholder is a holder of record of stock of the company entitled to a vote at such meeting and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice; (iii) a description of all arrangements or understandings between the shareholder and each nominee and any other person or persons (naming such person or persons) pursuant to which the nominations are to be made by the shareholder; (iv) such other information regarding each nominee proposed by such shareholder as would be required to be included in a proxy statement filed pursuant to the proxy rules of the Securities and Exchange Commission, had the nominee been nominated, or intended to be nominated, by the Board of Directors; and (v) the consent of each nominee to serve as a director of the Company if so elected. The chairman of the meeting may refuse to acknowledge the nomination of any person not made in compliance with the foregoing procedure.

In evaluating such recommendations, the Nominating Committee uses a variety of criteria to evaluate the qualifications and skills necessary for members of our Board of Directors. Under these criteria, members of the Board of Directors should have the highest professional and personal ethics and values, consistent with our longstanding values and standards. They should also have broad experience at the policy-making level in business, government, education, technology, or public interest. They should be committed to enhancing shareholder value and should have sufficient time to carry out their duties and to provide insight and practical wisdom based on experience. Their service on other boards of public companies should be limited to a number that permits them, given their individual circumstances, to perform responsibly all director duties. Each director must represent the interest of our shareholders.

Our Nominating Committee uses a variety of methods for identifying and evaluating nominees for director. They regularly assess the appropriate size of the Board of Directors, and whether any vacancies are expected due to retirement or otherwise. If vacancies are anticipated, or otherwise arise, the Committee considers various potential candidates for directors. Candidates may come to their attention through current members of the Board, shareholders, or other persons. These candidates are evaluated at regular or special meetings of the Board, and may be considered at any point during the year. The Committee considers properly submitted shareholder recommendations for candidates. In evaluating such recommendations, the Committee uses the qualifications and standards discussed above and seeks to achieve a balance of knowledge, experience and capability on the Board of Directors. The Company does not pay a third party to assist in identifying and evaluating candidates for the Board of Directors.

We expect all of our employees to conduct themselves honestly and ethically, particularly in handling actual and apparent conflicts of interest and providing full, accurate, and timely disclosure to the public.

We have adopted a Code of Ethics that is specifically applicable to our senior management and financial officers, including our principal executive officer, our principal financial officer, and our principal accounting officer and controllers. A copy of this Code of Ethics is available without charge to shareholders upon request to the secretary of the Company, at HCSB Financial Corporation, P.O. Box 218, Loris, South Carolina, 29569.

The Company and the Bank have banking and other transactions in the ordinary course of business with directors and officers of the Company and the Bank and their affiliates. It is the Company's policy that these transactions be on substantially the same terms (including price, or interest rates and collateral) as those prevailing at the time for comparable transactions with unrelated parties. The Company does not expect these transactions to involve more than the normal risk of collectibility nor present other unfavorable features to the Company or the Bank. Loans to individual directors and officers must also comply with the Bank's lending policies and statutory lending limits, and directors with a personal interest in any loan application are excluded from the consideration of the loan application. The Company intends for all of its transactions with its affiliates to be on terms no less favorable to the Company than could be obtained from an unaffiliated third party and to be approved by a majority of disinterested directors.

We have selected the firm of Elliott Davis, LLC to serve as our independent auditors for the year ending December 31, 2009 subject to the ratification of this selection by our shareholders. We expect that a representative from this firm will be present and available to answer appropriate questions at the annual meeting and will have an opportunity to make a statement if he or she desires to do so.

The following table shows the fees that we paid for services performed in fiscal years ended December 31, 2008 and 2007:

	Year Ended December 31, 2008		Year Ended December 31, 2007

Audit Fees	$	67,385	$	58,500
Audit-Related Fees		14,475		—
Tax Fees		7,395		6,230
All Other Fees		—		525

Total	$	89,255	$	65,255

Audit Fees. This category includes the aggregate fees billed for each of the last two fiscal years for professional services rendered by Elliott Davis, LLC for the audit of our annual financial statements and for reviews of the condensed financial statements included in our quarterly reports on Form 10-Q.

Audit-Related Fees. This category includes the aggregate fees billed for non-audit services, exclusive of the fees disclosed relating to audit fees, rendered by Elliott Davis, LLC during the fiscal years ended December 31, 2008 and 2007. These services principally included the audit of the Company's Trusteed Retirement Savings Plan (401K) and research and consultation related to

accounting advice for the proposal issuance of preferred stock under the U.S. Treasury TARP-Capital Purchase Program.

Tax Fees. This category includes the aggregate fees billed for tax services rendered by Elliott Davis, LLC during the fiscal years ended December 31, 2008 and 2007. These services include preparation of state and federal tax returns for the Company and its subsidiary.

All Other Fees. This category includes the aggregate fees billed for all other services, exclusive of the fees disclosed above, rendered by Elliott Davis, LLC during the fiscal years ended December 31, 2008 and 2007. These other services consisted primarily of the preparation of the Form 5500.

Oversight of Accountants; Approval of Accountant Fees. Under the provisions of its charter, the Audit Committee is responsible for the retention, compensation, and oversight of the work of the independent auditors. The charter provides that the Audit Committee must pre-approve the fees paid for the audit. The Audit Committee has delegated approval of non-audit services and fees to the chairman of the Audit Committee for presentation to the full Audit Committee at the next scheduled meeting. The policy specifically prohibits certain non-audit services that are prohibited by securities laws from being provided by an independent auditor. All of the accounting services and fees reflected in the table above were reviewed and approved by the Audit Committee, and none of the services were performed by individuals who were not employees of the independent auditor.

As required by Section 16(a) of the Securities Exchange Act of 1934, the Company's directors, its executive officers, and certain individuals are required to report periodically their ownership of the Company's common stock and any changes in ownership to the SEC. Based on review of Forms 3, 4, and 5 and any representations made to the company, the Company believes that all such reports for these persons were filed in a timely fashion during 2008.

If shareholders wish a proposal to be included in the Company's proxy statement and form of proxy relating to the 2010 annual meeting, they must deliver a written copy of their proposal to the principal executive offices of the Company no later than November 24, 2009. To ensure prompt receipt by the Company, the proposal should be sent certified mail, return receipt requested. Proposals must comply with the Company's bylaws relating to shareholder proposals in order to be included in the Company's proxy materials. A copy of our bylaws is available upon written request.

Any shareholder proposal to be made at an annual meeting, but which is not requested to be included in the Company's proxy materials, must comply with the Company's bylaws. Proposals must be delivered between 30 and 60 days prior to the annual meeting; provided, however, that if less than 31 days' notice of the meeting is given to shareholders, the notice must be delivered within 10 days following the day on which notice of the meeting was mailed to shareholders.

PROXY SOLICITED FOR ANNUAL MEETING OF SHAREHOLDERS OF
HCSB FINANCIAL CORPORATION
To be held on April 23, 2009
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby constitutes and appoints Tommie W. Grainger and Gwyn G. McCutchen, and each of them, his or her true and lawful agents and proxies with full power of substitution in each, to represent and vote, as indicated below, all of the shares of Common Stock of HCSB Financial Corporation that the undersigned would be entitled to vote at the Annual Meeting of Shareholders of the company to be held at the Center for Health and Fitness at 3207 Casey Street, Loris, South Carolina, at 7:00 p.m. local time, and at any adjournments or postponements, upon the matters described in the accompanying Notice of Annual Meeting of Shareholders and Proxy Statement as follows (and the proxies are authorized to vote in their discretion upon other business as may properly come before the meeting and any adjournments or postponements thereof):

This proxy, when properly executed, will be voted in the manner directed herein by the undersigned shareholder. If no direction is made, this proxy will be voted: "FOR" the proposal to elect the five identified nominees as Class I directors to serve on the Board of Directors each for three-year terms, and "FOR" the ratification of the appointment of Elliott Davis, LLC as our independent registered public accounting firm for the year ending December 31, 2009, and "FOR" the nonbinding resolution to approve the compensation of the named executive officers.

Please sign exactly as name or names appear on your stock certificate. Where more than one owner is shown on your stock certificate, each owner should sign. Persons signing in a fiduciary or representative capacity shall give full title. If a corporation, please sign in full corporate name by authorized officer. If a partnership, please sign in partnership name by authorized person.

PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY IN THE ENCLOSED ENVELOPE.


Dated:	, 2009


(Signature of Shareholder(s))		(Signature of Shareholder(s))

Print name clearly		Print name clearly


		By Order of the Board of Directors
		/s/ JAMES R. CLARKSON James R. Clarkson President and Chief Executive Officer
Loris, South Carolina March 17, 2009


o FOR all nominees listed (except as marked to the contrary)		o WITHHOLD AUTHORITY to vote for all nominees