The Southern Banc Company, Inc. Announces First Quarter Earnings

GADSDEN, Ala.--([ BUSINESS WIRE ])--The Southern Banc Company, Inc. (OTCBB: SRNN), the holding company for The Southern Bank Company, formerly First Federal Savings and Loan Association of Gadsden, Alabama, announced a net loss of $6,440, or $(0.01) per basic and diluted share, for the quarter ended September 30, 2008, as compared to a net loss of $52,134, or $(0.07) per basic and diluted share, for the quarter ended September 30, 2008.

Gates Little, President and Chief Executive Officer of the Company stated that the Company's net interest margins improved during the quarter as compared to the same period in 2007. Net interest income for the quarter ended September 30, 2008 was approximately $521,000 as compared to approximately $470,000 for the quarter ended September 30, 2007. The improvement in the net interest margin for the quarter was primarily attributable to a decrease in total interest expense of approximately $114,000 offset in part by a decrease in total interest income of approximately $63,000. For the quarter ended September 30, 2008, total non-interest income increased approximately $29,000 or 113.95% while total non-interest expense increased approximately $12,000 or 2.17% as compared to the same three month period in 2007. The increase in non-interest income was primarily attributable to an increase in customer service fees.

The Company's total assets at September 30, 2008 were $100.8 million, as compared to $102.9 million at September 30, 2007. Total stockholders' equity was approximately $15.1 million at September 30, 2008 and 2007 or approximately 15.00% of total assets, respectively.

The Bank has four offices located in Gadsden, Albertville, Guntersville, and Centre, Alabama. The stock of The Southern Banc Company, Inc. is listed on the OTC Bulletin Board.

Certain statements in this release contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, which statements can generally be identified by the use of forward-looking terminology, such as "may," "will," "expect," "estimate," "anticipate," "believe," "target," "plan," "project," "continue," or the negatives thereof, or other variations thereon or similar terminology, and are made on the basis of management's plans and current analyses of the Company, its business and the industry as a whole. These forward-looking statements are subject to risks and uncertainties, including, but not limited to, economic conditions, competition, interest rate sensitivity and exposure to regulatory and legislative changes. The above factors, in some cases, have affected, and in the future could affect the Company's financial performance and could cause actual results to differ materially from those expressed or implied in such forward-looking statements, even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized.

THE SOUTHERN BANC COMPANY, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollar Amounts in Thousands)

		September 30,			June 30,
		2008			2008


ASSETS
CASH AND CASH EQUIVALENTS	$	4,383		$	4,344
SECURITIES AVAILABLE FOR SALE, at fair value		57,529			60,320
SECURITIES HELD TO MATURITY, at amortized cost, fair value of $85 and $112, respectively		83			94
FEDERAL HOME LOAN BANK (FHLB) STOCK		328			328

LOANS RECEIVABLE, net of allowance for loan losses of $194 and $170, respectively		36,687			36,140
PREMISES AND EQUIPMENT, net		947			947
ACCRUED INTEREST AND DIVIDENDS RECEIVABLE		438			508
PREPAID EXPENSES AND OTHER ASSETS		359			207

TOTAL ASSETS	$	100,754		$	102,889


LIABILITIES
DEPOSITS	$	82,257		$	84,387
FHLB ADVANCES		3,075			3,075
OTHER LIABILITIES		285			283

TOTAL LIABILITIES		85,617			87,745


STOCKHOLDERS' EQUITY:
Preferred stock, par value $.01 per share 500,000 shares authorized, shares issued and outstanding-- none
Common stock, par value $.01 per share, 3,500,000 authorized, 1,454,750 shares issued		15			15
Additional paid-in capital		13,887			13,887
Shares held in trust, at cost, 25,768 shares		(571	)		(571	)
Retained earnings		10,737			10,811
Treasury stock, at cost, 648,664 shares		(8,825	)		(8,825	)
Accumulated other comprehensive (loss)		(106	)		(173	)
TOTAL STOCKHOLDERS' EQUITY		15,137			15,144
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	100,754		$	102,889

THE SOUTHERN BANC COMPANY, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollar Amounts in Thousands, except per share data)

		Three Months Ended
		September 30,

		2008			2007
		(Unaudited)			(Unaudited)
INTEREST INCOME:
Interest and fees on loans	$	567		$	512
Interest and dividends on securities available for sale		644			740
Interest and dividends on securities held to maturity		2			2
Other interest income		8			30
Total interest income		1,221			1,284
INTEREST EXPENSE:
Interest on deposits		679			780
Interest on borrowings		21			34
Total interest expense		700			814
Net interest income before provision for loan losses		521			470
Provision for loan losses		3			8
Net interest income after provision for loan losses		518			462
NON-INTEREST INCOME:
Fees and other non-interest income		51			21
Miscellaneous income		5			4
Total non-interest income		56			25

NON-INTEREST EXPENSE:
Salaries and employee benefits		350			306
Office building and equipment expenses		52			52
Professional Services Expense		42			78
Data Processing Expense		68			65
Other operating expense		72			70
Total non-interest expense		584			571
Loss before income tax benefit		(10	)		(84	)
PROVISION FOR INCOME TAX (BENEFIT)		(4	)		(32	)
Net Loss	$	(6	)	$	(52	)
EARNINGS PER SHARE:
Basic	$	(0.01	)	$	(0.07	)
Diluted	$	(0.01	)	$	(0.07	)

DIVIDENDS DECLARED PER SHARE	$	0.0875		$	0.0875

AVERAGE SHARES OUTSTANDING:
Basic		780,318			780,318
Diluted		780,422			782,673

Contributing Sources

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The Southern Banc Company, Inc. Announces First Quarter Earnings