MOREHEAD CITY, N.C., Aug. 3 /PRNewswire-FirstCall/ -- Second quarter net income at Sound Banking Company (OTC:SNBN) (BULLETIN BOARD: SNBN) was $162 thousand or $0.24 per share compared with $261 thousand or $0.38 per share for the second quarter of 2006. Net income for the first six months of 2007 was $410 thousand, or $0.60 per share compared with $454 thousand or $0.67 per share for the first six months of 2006. Total assets as of June 30, 2007 were $112 million, a $13 million or 13% increase when compared to total assets of $99 million at June 30, 2006. Deposits at June 30, 2007 were $101 million, a 13% increase when compared to deposits of $89 million at June 30, 2006. Loans outstanding were $90 million at June 30, 2007, a 20% increase when compared to outstanding loans of $75 million reported as of the same date of 2006. "Our second quarter performance is the result of a decline in our net interest margin over the past 12 months," said President & CEO, Phil Collins. "When compared to last year our cost of interest bearing deposits has increased 88 basis points while the yield on our loan portfolio has remained fairly constant. On a positive note we are pleased with our loan growth and the quality of our loan portfolio. We are also pleased to announce that in July the Bank opened a new full service branch in Beaufort. That office will serve existing and prospective customers in the eastern section of Carteret County and should show significant growth in the coming months." Sound Banking Company is a state chartered bank and offers a full range of financial services. Sound Bank, headquartered in Morehead City, operates full service offices in Morehead City, Beaufort and Cape Carteret and a loan production office in New Bern, North Carolina. Information about Sound Banking Company and its products and services is available on its web site at: http://www.soundbanking.com/ The information as of and for the quarter ended June 30, 2007 as presented is unaudited. This news release contains forward-looking statements. The actual results might differ materially from those projected in the forward-looking statements for various reasons, including our limited operating history, substantial changes in financial markets, regulatory changes, changes in interest rates, loss of deposits and loan demand to other savings and financial institutions, and changes in real estate values and the real estate market. DATASOURCE: Sound Banking Company CONTACT: Phil Collins, Sound Banking Company, +1-252-727-5558 Web site: http://www.soundbanking.net/

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