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The Southern Banc Company, Inc. Announces Second Quarter Earnings

GADSDEN, Ala., Feb. 02, 2018 (GLOBE NEWSWIRE) --

The Southern Banc Company, Inc. (OTCBB:SRNN), the holding company for The Southern Bank Company announced a net loss of approximately $560,000, or ($0.72) per basic and diluted share, for the quarter ended December 31, 2017, as compared to a net loss of approximately $177,000, or ($0.23) per basic and diluted share, for the quarter ended December 31, 2016. For the six-month period ended December 31, 2017 the Company recorded a net loss of approximately $737,000, which included an income tax expense of approximately $606,000 due to the recent tax law changes, as compared to a net loss of approximately $283,000 for the six-month period ended December 31, 2016.

Gates Little, President and Chief Executive Officer of the Company stated that the Company’s net loss for the quarter ended December 31, 2017 was primarily due to the revaluation of the Company’s deferred tax assets and liabilities resulting from the recent change in the statutory corporate income tax rate from 34% to 21%. During the quarter ended December 31, 2017 the Company’s net interest margins improved as compared to the same period in 2016. Net interest income for the quarter ended December 31, 2017 was approximately $1.1 million as compared to approximately $820,000 for the quarter ended December 31, 2016, an increase of approximately $253,000 or 30.9%. The improvement in the net interest margin for the quarter was primarily attributable to an increase in total interest income of approximately $270,000 or 26.8%, offset in part by an increase in total interest expense of approximately $16,000. Provision for loan and lease losses decreased approximately $222,000 during the quarter as compared to the same period in 2016. Net interest income after provision for loan and lease losses increased approximately $475,000 or 81.0% for the quarter ended December 31, 2017, as compared to the same quarter in 2016. For the quarter ended December 31, 2017, total non-interest income increased approximately $10,000 or 29.9% while total non-interest expense increased approximately $48,000 or 5.4% as compared to the same three month period in 2016. The increase in non-interest income was primarily attributable to an increase in miscellaneous income of approximately $7,000. The increase in non-interest expense was primarily attributable to increases in salaries and benefits of approximately $13,000, other operating expenses of approximately $41,000, offset in part by decreases in professional service expenses of approximately $1,000, data processing expenses of approximately $1,000, office building and equipment expenses of approximately $4,000.

For the six-months ended December 31, 2017, net interest income increased approximately $532,000 or 31.8%. Provision for loan and lease losses increased approximately $261,000 during the six-month period as compared to the same period in 2016. Net interest income after provision for loan and lease losses increased approximately $271,000 or 20.0% for the six-months ended December 31, 2017, as compared to the same period in 2016. For the six-months ended December 31, 2017, total non-interest income increased approximately $5,000 or 5.3% while total non-interest expense decreased approximately $46,000 or 2.5% as compared to the same period in 2016. The increase in non-interest income was primarily attributable to increases in customer service fees of approximately $8,000, miscellaneous income of approximately $20,000 offset in part by a decrease in the net gain on sales of securities of approximately $23,000. The decrease in non-interest expense was primarily attributable to decreases in salaries and benefits of approximately $26,000, occupancy expenses of approximately $9,000, professional fees of approximately $17,000, data processing fees of approximately $7,000 offset in part by an increase other operating expenses of approximately $13,000.

The Company’s total assets at December 31, 2017 were approximately $98.3 million, as compared to $96.5 million at June 30, 2017. Total stockholders’ equity was approximately $11.0 million at December 31, 2017 or 11.2% of total assets as compared to approximately $11.8 million at June 30, 2017 or approximately 12.3% 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.

(Selected financial data attached)

THE SOUTHERN BANC COMPANY, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollar Amounts in Thousands)

December 31, June 30,
2017 2017
ASSETS
CASH AND CASH EQUIVALENTS $1,722 $2,910
SECURITIES AVAILABLE FOR SALE, at fair value 23,918 28,775
FEDERAL HOME LOAN BANK STOCK 510 340
LOANS RECEIVABLE, net of allowance for loan losses
of $1,432 and $1,238, respectively 69,436 61,309
PREMISES AND EQUIPMENT, net 732 754
ACCRUED INTEREST AND DIVIDENDS RECEIVABLE 275 216
PREPAID EXPENSES AND OTHER ASSETS 1,748 2,238
TOTAL ASSETS $98,341 $96,542
LIABILITIES
DEPOSITS$76,127 $79,383
FHLB ADVANCES 8,765 5,000
OTHER LIABILITIES 2,468 311
TOTAL LIABILITIES 87,360 84,694
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,
39,260 shares (706) (706)
Retained earnings 6,636 7,373
Treasury stock, at cost,
648,664 shares (8,825) (8,825)
Accumulated other comprehensive income (26) 103
TOTAL STOCKHOLDERS’ EQUITY 10,981 11,847
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$98,341 $96,542

THE SOUTHERN BANC COMPANY, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollar Amounts in Thousands, except per share data)

Three Months Ended Year-to-Date
December 31, December 31,
2017 2016 2017 2016
(Unaudited) (Unaudited)
INTEREST INCOME:
Interest and fees on loans$1,120 $819 $2,284 $1,670
Interest and dividends on securities 144 183 305 380
Other interest income 12 4 18 10
Total interest income 1,276 1,006 2,607 2,060
INTEREST EXPENSE:
Interest on deposits 167 179 335 366
Interest on borrowings 35 7 62 16
Total interest expense 202 186 397 382
Net interest income before provision
for loan losses 1,073 820 2,210 1,678
Provision for loan losses 11 233 581 320
Net interest income after provision
for loan losses 1,062 587 1,629 1,358
NON-INTEREST INCOME:
Fees and other non-interest income 25 23 49 41
Net gain on sale of securities 0 0 0 23
Miscellaneous income 16 8 32 12
Total non-interest income 41 31 81 76
NON-INTEREST EXPENSE:
Salaries and employee benefits 497 484 1,016 1,042
Office building and equipment expenses 57 61 115 124
Professional Services Expense 94 95 171 188
Data Processing Expense 121 122 233 240
Other operating expense 181 140 307 294
Total non-interest expense 950 902 1,842 1,888
Income (loss) before income taxes 153 (283) (132) (454)
PROVISION (BENEFIT) FOR INCOME TAXES 713 (107) 606 (171)
Net Loss$(560) $(177) $(737)$(283)
LOSS PER SHARE:
Basic$(0.73) $(0.23) $(0.96)$(0.37)
Diluted$ (0.73) $ (0.23) $ (0.96)$ (0.37)
DIVIDENDS DECLARED PER SHARE$--- $--- $--- $ ---
AVERAGE SHARES OUTSTANDING:
Basic 766,826 773,299 766,826 773,371
Diluted 766,826 773,299 766,826 773,371

Contact: Gates Little
(256) 543-3860

Source:The Southern Banc Company, Inc.