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 loss of approximately $83,000, or $(0.11) per basic and diluted share, for the quarter ended March 31, 2011, as compared to net income of approximately $30,000, or $0.04 per basic and diluted share, for the quarter ended March 31, 2010. For the nine month period ended March 31, 2011, the company recorded a net loss of approximately $47,000, or $(0.06) per basic and diluted share, as compared to a net income of approximately $69,000, or $0.09 per basic and diluted share, for the nine month period ended March 31, 2010.

Gates Little, President and Chief Executive Officer of the Company stated that the Company’s net interest income for the three month period ended March 31, 2011 decreased approximately $73,000, or 11.35% during the three month period ended March 31, 2011 as compared to the same period in 2010. Net interest income for the nine month period ended March 31, 2011 decreased approximately $113,000, or 6.13% as compared to the same period in 2010. The decrease in the net interest income for the nine month period was primarily attributable to a decrease in total interest income of approximately $530,000, or 17.04%, offset in part by a decrease in total interest expense of approximately $418,000, or 32.76%. For the nine month period ended March 31, 2011, total non-interest income increased approximately $3,000, or approximately 1.38%, while total non-interest expense increased approximately $108,000, or 5.68%, as compared to the same nine month period in 2010. The increase in non-interest income was primarily attributable to a gain on the sale of securities available for sale of approximately $46,000 offset in part by a decrease in customer service fees of approximately $64,000. During the nine month period ended March 31, 2011 the increase in total non-interest expense was primarily attributable to increases in professional service expense and data processing expenses, offset in part by decreases in other operating expenses, occupancy expenses, salaries and employee benefits. The increase in data processing expenses, primarily one-time de-conversion and training expenses, was related to the bank’s conversion to a new core processing system and other professional services relating to the implementation of a new product offering. The decrease in other operating expenses was primarily attributable to a decrease in FDIC insurance premiums.

The Company’s total assets at March 31, 2011 were approximately $94.8 million, as compared to $87.5 million at June 30, 2010. Total stockholders’ equity was approximately $15.7 million, or approximately 16.56% of total assets, at March 31, 2011 as compared to approximately $16.2 million, or approximately 18.48% of total assets, at June 30, 2010. The decrease in total stockholders’ equity was primarily due to a decrease of approximately $409,000 in accumulated other comprehensive loss relating to unrealized loss in securities available for sale and a net loss for the quarter of approximately $83,000.

The Bank has four branch offices located in Gadsden, Albertville, Guntersville, and Centre, Alabama. In addition, the Bank has a loan production office located in Birmingham, 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)

          March 31,     June 30, 2011 2010   ASSETS CASH AND CASH EQUIVALENTS $ 6,861 $ 6,061

SECURITIES AVAILABLE FOR SALE, at fair value

57,194 46,869

SECURITIES HELD TO MATURITY, at amortized cost, fair value of $39 and $65, respectively

39 60 FEDERAL HOME LOAN BANK (FHLB) STOCK 733 338  

LOANS AND LEASES RECEIVABLE, net of allowance for loan losses of $248 and $253, respectively

28,317 32,563 PREMISES AND EQUIPMENT, net 898 874 ACCRUED INTEREST AND DIVIDENDS RECEIVABLE 396 352 PREPAID EXPENSES AND OTHER ASSETS 397 353     TOTAL ASSETS $ 94,835   $ 87,470       LIABILITIES DEPOSITS $ 69,923 $ 69,408 FHLB ADVANCES 8,626 1,075 OTHER LIABILITIES 577 821     TOTAL LIABILITIES 79,126 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 10,542 10,590

Treasury stock, at cost, 648,664 shares

(8,825 ) (8,825 ) Accumulated other comprehensive (loss) 661   1,070  

TOTAL STOCKHOLDERS’ EQUITY

15,709   16,166  

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

94,835   $ 87,470                

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,         2011 2010 2011 2010   INTEREST INCOME: Interest and fees on loans $ 430 $ 507 $ 1,371 $ 1,542 Interest and dividends on securities 396 505 1,203 1,563 Other interest income 2   1 7   6

Total interest income

828 1,013

2,581

3,111

INTEREST EXPENSE:

Interest on deposits 236 363 801 1,228 Interest on borrowings 24   10 56   47 Total interest expense 260   373 857   1,275

Net interest income before provision for loan losses

568 640

1,724

1,836

Provision for loan losses 0   42 0   48

Net interest income after provision for loan losses

568 598

1,724

1,788

NON-INTEREST INCOME:

Fees and other non-interest income 15 33 47 111 Gain on sale of securities 0 0 142 96 Miscellaneous income 17   6 35   14 Total non-interest income 32   39 224   221

NON-INTEREST EXPENSE:

Salaries and employee benefits 362 338 1,042 1,066 Office building and equipment expenses 51 55 149 158 Professional Services Expense 67 30 197 101 Data Processing Expense 168 75 371 219 Other operating expense 82   92 248   354 Total non-interest expense 730   590 2,007   1,898 Income / (loss) before income taxes (130 ) 47 (59 ) 111

PROVISION / (BENEFIT) FOR INCOME TAXES

(47 ) 18 (12 ) 42

Net Income / (Loss)

$

(83 )

$

29

$

(47 )

$

69 EARNINGS / (LOSS) PER SHARE: Basic $ (0.11 ) $ 0.04 $ (0.06 ) $ 0.09 Diluted $ (0.11 ) $ 0.04 $ (0.06 ) $ 0.09

DIVIDENDS DECLARED PER SHARE

$

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$

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$

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$

---   AVERAGE SHARES OUTSTANDING: Basic 780,318 780,318 780,318 780,318 Diluted 780,318 780,396 780,318 780,397