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 a net income of approximately $86,000, or $0.11 per basic and diluted share, for the quarter ended September 30, 2010, as compared to net income of approximately $70,000, or $0.09 per basic and diluted share, for the quarter ended September 30, 2009.

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 2009. Net interest income for the quarter ended September 30, 2010 was approximately $582,000 as compared to approximately $564,000 for the quarter ended September 30, 2009. The improvement in the net interest margin for the quarter was primarily attributable to a decrease in total interest expense of approximately $169,000 offset in part by a decrease in total interest income of approximately $151,000. For the quarter ended September 30, 2010, total non-interest income increased approximately $33,000 or 24.5% while total non-interest expense increased approximately $30,000 or 5.2% as compared to the same three month period in 2009. The increase in non-interest income was primarily attributable to an increase in net gain on sale of securities available for sale of approximately $45,000 offset in part by a decrease in customer service fees of approximately $14,000.

The Company’s total assets at September 30, 2010 were $87.1 million, as compared to $87.5 million at June 30, 2010. Total stockholders’ equity was approximately $16.1 million at September 30, 2010 or 18.4% of total assets as compared to approximately $16.2 million at June 30, 2010 or approximately 18.5% 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 under the symbol “SRNN.”

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,

2010

2010       ASSETS   CASH AND CASH EQUIVALENTS $ 8,927 $ 6,061   SECURITIES AVAILABLE FOR SALE, at fair value 45,567 46,869

SECURITIES HELD TO MATURITY, at amortized cost, fair value of $61 and $65, respectively

56 60 FEDERAL HOME LOAN BANK (FHLB) STOCK 314 338  

LOANS RECEIVABLE, net of allowance for loan losses of $194 and $170, respectively

30,712 32,563 PREMISES AND EQUIPMENT, net 884 874 ACCRUED INTEREST AND DIVIDENDS RECEIVABLE 320 352 PREPAID EXPENSES AND OTHER ASSETS 338 353     TOTAL ASSETS $ 87,118   $ 87,470       LIABILITIES   DEPOSITS $ 69,186 $ 69,408 FHLB ADVANCES 1,075 1,075 OTHER LIABILITIES 788 821     TOTAL LIABILITIES 71,049 71,304     STOCKHOLDERS' EQUITY:

Preferred stock, par value $.01 per share 500,000 shares authorized, shares issued and outstanding -- none

0 0

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 10,671 10,590

Treasury stock, at cost, 648,664 shares

(8,825 ) (8,825 ) Accumulated other comprehensive (loss) 892   1,070    

TOTAL STOCKHOLDERS’ EQUITY

16,069   16,166    

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

87,118   $ 87,470      

THE SOUTHERN BANC COMPANY, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Dollar Amounts in Thousands, except per share data)

      Three Months Ended September 30,   2010 2009 (Unaudited) (Unaudited) INTEREST INCOME:   Interest and fees on loans $ 479 $ 517 Interest and dividends on securities 409 520 Other interest income 1 3  

Total interest income

889 1,040  

INTEREST EXPENSE:

Interest on deposits 299 456 Interest on borrowings 8 21 Total interest expense 307 477

Net interest income before provision for loan losses

582 563 Provision for loan losses 0 5

Net interest income after provision for loan losses

582 558  

NON-INTEREST INCOME:

Fees and other non-interest income 22 35 Net gain on sale of securities 142 97 Miscellaneous income 4 3 Total non-interest income 168 135  

NON-INTEREST EXPENSE:

Salaries and employee benefits 318 344 Office building and equipment expenses 45 54 Professional Services Expense 76 36 Data Processing Expense 95 69 Other operating expense 78 78 Total non-interest expense 612 581 Loss before income tax benefit 138 112  

PROVISION FOR INCOME TAX (BENEFIT)

52 42  

Net Income (Loss)

$

86

$

70   EARNINGS PER SHARE: Basic $ 0.11 $ 0.09 Diluted $ 0.11 $ 0.09  

DIVIDENDS DECLARED PER SHARE

$

0.0000

$

0.0000   AVERAGE SHARES OUTSTANDING: Basic 780,318 780,318 Diluted 780,318 780,398