SRNN Southern Banc Company Inc (PK)

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 net loss of $133,060, or $(0.17) per basic and diluted share, for the year ended June 30, 2008, as compared to a net loss of $160,883, or $(0.21) per basic and $(0.20) per diluted share, for the year ended June 30, 2007. For the three month period ended June 30, 2008, the Company reported a net loss of $20,056, as compared to a net loss of $30,489 for the three month period ended June 30, 2007. In addition to reporting earnings, the Company announced that the annual meeting of stockholders will be held on November 19, 2008 at 5:00 PM at the main office of The Southern Bank Company in Gadsden, Alabama. The voting record date for the purpose of determining stockholders eligible to vote on proposals presented at the annual meeting is September 26, 2008. Gates Little, President and Chief Executive Officer of the Company stated that the Company�s net loss for the fiscal year ended June�30, 2008 was primarily attributable to an increase in non-interest expense of approximately $69,000, or 3.0%, offset in part by an improvement in the net interest margin of approximately $45,000, or 2.4%. The increase in non-interest expense was primarily attributable to an increase in salaries and benefits associated with the addition of one lending officer and one secondary market loan originator. During the year ended June 30, 2008, total interest income increased approximately $85,000, or 1.7%, and total interest expense increased approximately $57,000, or 1.8%. The Company�s total assets at June 30, 2008 were $102.9 million, as compared to $99.1 million at June 30, 2007. Total stockholders� equity at June 30, 2008, was $15.1 million, or 14.7% of total assets. 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. (Selected financial data attached) � THE SOUTHERN BANC COMPANY, INC. Consolidated Statements of Financial Condition June 30, 2008 and 2007 � Assets � 2008 � 2007 Cash and cash equivalents: Cash on hand and in other banks $ 3,513,585 $ 2,394,900 Interest�bearing deposits in other banks � 829,923 � � 2,746,733 � Total cash and cash equivalents 4,343,508 5,141,633 Securities available for sale, at fair value 60,321,760 58,784,841 Securities held to maturity (fair value of $112,265 and $2,615,941, respectively) 93,758 107,638 Federal Home Loan Bank stock 327,800 328,800 Loans held for sale 185,000 � Loans receivable, net of allowance for loan losses of $192,532 and $169,908, respectively 35,954,882 32,575,281 Accrued interest and dividends receivable 508,202 537,966 Premises and equipment, net 946,535 988,262 Prepaid expenses and other assets � 207,353 � � 668,132 � Total assets $ 102,888,798 � $ 99,132,533 � Liabilities and Stockholders� Equity Deposits $ 84,368,467 $ 82,582,606 Federal Home Loan Bank advances 3,075,350 1,416,667 Other liabilities � 282,931 � � 256,754 � Total liabilities � 87,744,748 � � 84,256,027 � Commitments and contingencies Stockholders� equity: Preferred stock, par value $0.01 per share. Authorized 500,000 shares; no shares issued and outstanding � � Common stock, par value $0.01 per share. Authorized 3,500,000 shares; issued 1,454,750 shares in 2007 and 2006 14,548 14,548 Additional paid-in capital 13,886,524 13,997,847 Retained earnings 10,812,325 11,218,497 Shares held in trust, at cost, 25,768 shares (570,629 ) (570,629 ) Treasury stock, at cost, 648,664 and 645,464 shares in 2007 and 2006, respectively (8,825,282 ) (8,825,282 ) Accumulated other comprehensive loss � (173,436 ) � (958,455 ) Total stockholders� equity � 15,144,050 � � 14,876,526 � Total liabilities and stockholders� equity $ 102,888,798 � $ 99,132,553 � � THE SOUTHERN BANC COMPANY, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Dollar Amounts in Thousands) � � Three Months Ended � Twelve Months Ended June 30, June 30, 2008 � 2007 2008 � 2007 � INTEREST INCOME: Interest and fees on loans $ 527 543 2,124 1,987 Interest and dividends on securities available for sale 725 729 2,977 2,888 Interest and dividends on securities held to maturity 2 2 7 71 Other interest income � 12 � 43 � 118 � 195 � � Total interest income 1,266 1,317 5,226 5,141 � INTEREST EXPENSE: Interest on deposits 729 802 3,122 3,063 Interest on borrowings � 21 � 20 � 129 � 131 � Total interest expense � 750 � 822 � 3,251 � 3,194 � Net interest income 516 495 1,975 1,947 Provision for loan losses � 10 � 8 � 18 � 35 � Net interest income after provision for loan losses � 506 � 487 � 1,957 � 1,912 � � � NON-INTEREST INCOME: Customer service fees 44 32 127 119 Gain on sale of securities 0 1 67 11 Miscellaneous income, net � 3 � 4 � 13 � 9 � Total non-interest income � 47 � 37 � 207 � 139 � NON-INTEREST EXPENSE: Salaries and employee benefits 355 309 1,364 1,293 Office building and equipment expenses 52 56 206 267 Professional service expense 43 71 221 229 Data processing expense 68 63 267 220 Other operating expense � 67 � 74 � 320 � 300 � Total non-interest expense � 585 � 573 � 2,378 � 2,309 � � Loss (income) before income taxes (32 ) (49 ) (214 ) (258 ) Provision for income tax (benefit) expense � (12 ) (18 ) ( 81 ) (97 ) Net (loss) income $ (20 ) (31 ) (133 ) (161 ) ======== ======== ======== ======== � Earnings per share � Basic $ (0.03 ) (0.04 ) (0.17 ) (0.21 ) Earnings per share � Diluted $ (0.03 ) (0.04 ) (0.17 ) (0.20 ) � � Dividends declared per share $ 0.0875 0.0875 0.3500 0.3500 � THE SOUTHERN BANC COMPANY, INC. Consolidated Statements of Cash Flows Years ended June 30, 2008 and 2007 � � 2008 � 2007 Cash flows from operating activities: Net (loss) income $ (133,060 ) (160,883 ) Adjustments to reconcile net (loss) income to net cash (used in) provided by Operating activities: Depreciation 86,276 105,384 Amortization of premiums/discounts on securities, net (9,246 ) (25,134 ) Provision for loan losses 18,000 35,075 Deferred income tax (benefit) provision (99,799 ) (99,758 ) Loss (gain) on loans held for sale 2,865 419 Proceeds from sale of loans held for sale 2,405,235 1,985,431 Loans originated for sale (2,593,100 ) (1,922,650 ) (Gain) loss on sale of available for sale securities, net (65,500 ) 277 Change in assets and liabilities: Decrease (increase) in accrued interest and dividends receivable 29,764 (28,751 ) Decrease (increase) in prepaid expenses and other assets (14,264 ) (13,588 ) (Decrease) increase in other liabilities � 14,653 � 66,650 � Net cash (used in) provided by operating activities � (358,176 ) (57,528 ) Cash flows from investing activities: Purchase of securities available for sale (23,351,527 ) (15,120,556 ) Proceeds from maturities and principal payments on securities Available for sale 20,083,866 12,288,690 Proceeds from sales of securities available for sale 3,065,500 2,319,997 Proceeds from sales of securities held to maturity � 930,352 Proceeds from maturities and principal payments on securities held to maturity 13,930 1,545,689 Sale of Federal Home Loan Bank stock 1,000 165,600 Loan repayments, net (3,397,601 ) 1,099,896 Capital expenditures, net � (44,549 ) (47,183 ) Net cash (used in) provided by investing activities � (3,629,381 ) 3,182,485 � Cash flows from financing activities: Purchase of treasury stock � (49,595 ) Federal Home Loan Bank proceeds 3,075,350 � Federal Home Loan Bank repayments (1,416,667 ) (3,833,333 ) Cash dividends paid (273,112 ) (273,392 ) Increase in deposits, net 1,803,861 412,933 Proceeds from exercise of stock options � � � 29,126 � Net cash provided by (used in) financing activities � 3,189,432 � (3,714,261 ) Net decrease in cash and cash equivalents (798,125 ) (589,304 ) Cash and cash equivalents, beginning of year � 5,141,633 � 5,730,937 � Cash and cash equivalents, end of year $ 4,343,508 � 5,141,633 � Supplemental cash flow information: Cash (received) paid during the year for: Income taxes, net of refund received $ � (53,477 ) Interest 3,256,876 3,206,472