SRNN Southern Banc Company Inc (PK)

The Southern Banc Company, Inc. (OTCBB: SRNN), the holding company for The Southern Bank Company, announced a net loss of $66,348, or $(0.08) per basic and diluted share, for the quarter ended March 31, 2009, as compared to net income of $20,245, or $0.03 per basic and diluted share, for the quarter ended March 31, 2008. For the nine month period ended March 31, 2009, the company recorded a net loss of $84,331, or $(0.11) per basic and diluted share, as compared to a net loss of $113,001, or $(0.14) per basic and diluted share, for the nine month period ended March 31, 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 2008. Net interest income for the nine month period ended March 31, 2009 was approximately $1.6 million as compared to approximately $1.5 for the nine month period ended March 31, 2008. The improvement in the net interest margin for the nine month period was primarily attributable to a decrease in total interest expense of approximately $615,000, or 24.6%, offset in part by a decrease in total interest income of approximately $450,000, or 11.4%. For the nine month period ended March 31, 2009, total non-interest income decreased approximately $36,000, or 21.2%. The decrease in non-interest income was primarily attributable to loss on sale of securities of approximately $30,000.

The Company�s total assets at March 31, 2009 were $99.8 million, as compared to $102.9 million at June 30, 2008. Total stockholders� equity was approximately $15.4 million, or 15.46% of total assets, at March 31, 2009 as compared to approximately $15.1 million, or 14.72% of total assets, at June 30, 2008.

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)

� � March 31, � June 30, 2009 2008 � � � ASSETS � CASH AND CASH EQUIVALENTS $ 8,928 $ 4,344 � SECURITIES AVAILABLE FOR SALE, at fair value 54,183 60,320

SECURITIES HELD TO MATURITY, at amortized cost, fair value of $82 and $100, respectively

77 94 FEDERAL HOME LOAN BANK (FHLB) STOCK 360 328 �

LOANS RECEIVABLE, net of allowance for loan losses of $198 and $193, respectively

34,814 36,140 PREMISES AND EQUIPMENT, net 929 947 ACCRUED INTEREST AND DIVIDENDS RECEIVABLE 406 508 PREPAID EXPENSES AND OTHER ASSETS 190 207 � � TOTAL ASSETS $ 99,887 � $ 102,889 � � � LIABILITIES � DEPOSITS $ 80,825 $ 84,387 FHLB ADVANCES 3,075 3,075 OTHER LIABILITIES 540 283 � � TOTAL LIABILITIES 84,440 87,745 � � 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 10,523 10,811

Treasury stock, at cost, 648,664 shares

(8,825 ) (8,825 ) Accumulated other comprehensive income (loss) 418 � (173 )

TOTAL STOCKHOLDERS� EQUITY

15,447 � 15,144 �

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

99,887 � $ 102,889 �

THE SOUTHERN BANC COMPANY, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Dollar Amounts in Thousands, except per share data)

� � Three Months Ended � Nine Months Ended March 31, March 31, � � 2009 2008 2009 2008 � � � � INTEREST INCOME: Interest and fees on loans $ 510 $ 550 $ 1,614 $ 1,597 Interest and dividends on securities available for sale 572 788 1,878 2,252 Interest and dividends on securities held to maturity 1 2 5 6 Other interest income 2 � 23 13 � 106 �

Total interest income

1,085 1,363

3,510

3,961

�

INTEREST EXPENSE:

Interest on deposits 538 801 1,823 2,394 Interest on borrowings 21 � 43 64 � 108 � Total interest expense 559 � 844 1,887 � 2,502 �

Net interest income before provision for loan losses

526 519

1,623

1,459

Provision for loan losses 38 � 0 51 � 8 �

Net interest income after provision for loan losses

488 519

1,572

1,451

�

NON-INTEREST INCOME:

Fees and other non-interest income 48 35 149 82 Gain/(Loss) on sale of securities (30 ) 66 (30 ) 77 Miscellaneous income 6 � 3 15 � 10 � Total non-interest income 24 � 104 134 � 169 � �

NON-INTEREST EXPENSE:

Salaries and employee benefits 356 346 1,089 1,009 Office building and equipment expenses 57 51 162 153 Professional Services Expense 45 53 138 178 Data Processing Expense 79 69 214 199 Other operating expense 81 � 72 238 � 262 � Total non-interest expense 618 � 591 1,841 � 1,801 � Income / (loss) before income taxes (106 ) 32 (135 ) (181 ) �

PROVISION / (BENEFIT) FOR INCOME TAXES

(40 ) 12

(51

)

(68

)

�

Net Income / (Loss)

$

(66 )

$

20

$

(84 )

$

(113 ) � EARNINGS / (LOSS) PER SHARE: Basic $ (0.08 ) $ 0.03 $ (0.11 ) $ (0.14 ) Diluted $ (0.08 ) $ 0.03 $ (0.11 ) $ (0.14 ) �

DIVIDENDS DECLARED PER SHARE

$

0.0875

$

0.0875

�

$

�

0.2625

�

$

�

0.2625

� AVERAGE SHARES OUTSTANDING: Basic 780,318 780,318 780,318 780,318 Diluted 780,347 780,422 780,390 781,182