The Southern Banc Company, Inc. Announces Second Quarter Earnings

The Southern Banc Company, Inc. (OTCBB: SRNN), the holding company for The Southern Bank Company, announced a net loss of approximately $16,000, or $(0.02) per basic and diluted share, for the quarter ended December 31, 2011, as compared to a net loss of approximately $50,000, or $(0.06) per basic and diluted share, for the quarter ended December 31, 2010. For the six month period ended December 31, 2011, the company recorded a net loss of approximately $32,000, or $(0.04) per basic and diluted share, as compared to a net income of approximately $36,000, or $0.05 per basic and diluted share, for the six month period ended December 31, 2010.

Gates Little, President and Chief Executive Officer of the Company stated that the Company’s net interest income increased approximately $27,000, or 4.8% during the three month period ended December 31, 2011 as compared to the same period in 2010. Net interest income for the six month period ended December 31, 2011 was approximately $1.2 million and approximately $1.1 million for the six month period in 2010. The increase in the net interest margin for the six month period was primarily attributable to a decrease in total interest income of approximately $78,000, or (4.5%), offset in part by a decrease in total interest expense of approximately $119,000, or 19.9%. For the six month period ended December 31, 2011, total non-interest income decreased approximately $1,000, or approximately (0.6%), while total non-interest expense increased approximately $128,000, or 9.9%, as compared to the same six month period in 2010. The decrease in non-interest income was primarily attributable to decreases in the gain on the sale of securities available for sale of approximately $14,000 and customer service fees of approximately $15,000 offset in part by an increase in income of approximately $27,000 primarily relating to the bank’s factoring operation. The increase in non-interest expense was primarily attributable to an increase in salaries and employee benefits relating to staff increases, offset in part by a decrease in data processing expenses relating to the change of the bank’s core processor.