The Southern Banc Company, Inc. (SRNN) 8-K Current report

Exhibit 99.1

For Immediate Release	Contact: Gates Little
	(256) 543-3860
	For Immediate Release
	August 22, 2003

The Southern Banc Company, Inc. Announces

2003 Annual Earnings

The Southern Banc Company, Inc. (AMEX: SRN), the holding company for The Southern Bank Company, formerly First Federal Savings and Loan Association of Gadsden, Alabama, announced net income of $894,000, or $1.02 per basic and $1.00 per diluted share, for the year ended June 30, 2003, as compared to net income of $633,000, or $0.69 per basic and diluted share, for the year ended June 30, 2002.

Gates Little, President and Chief Executive Officer of the Company, stated that the increase in net income and earnings per share for the year ended June 30, 2003 was primarily attributable to an increase in net interest margin due to a decrease in the interest rates paid on deposits. The increase was also due to an increase in gains on sale of securities.

For the three month period ended June 30, 2003, the Company reported net income of $159,000, or $0.18 per basic and diluted share, as compared to net income of $185,000, or $0.20 per basic and diluted share, for the three month period ended June 30, 2002. The decrease in net income for the three month period ended June 30, 2003, was primarily due to an increase in income tax expense of $46,000. Mr. Little went on to mention an improvement in net interest margin, for the three month period ended June 30, 2003, primarily resulting from a decrease in total interest expense of $173,000 and offset in part by a decrease in total interest income of approximately $166,000. In addition to the improvement in net interest margin, total non-interest income for the three month period ended June 30, 2003 increased $45,000 due primarily to an increase in customer service fees and gains on sale of securities.

The Company’s total assets at June 30, 2003 were approximately $112 million as compared to $110 million at June 30, 2002.

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 American Stock Exchange under the symbol “SRN”.

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 for 2000 and beyond 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.

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(Dollar Amounts in Thousands)

	June 30, 2003			June 30, 2002
ASSETS
CASH AND CASH EQUIVALENTS	$	9,393		$	7,529
SECURITIES AVAILABLE FOR SALE, at fair value		53,723			53,753
SECURITIES HELD TO MATURITY, at amortized cost, fair value of $7,722 and $12,178, respectively		7,215			11,527
FEDERAL HOME LOAN BANK STOCK		886			1,449
LOANS HELD FOR SALE		50			0
LOANS RECEIVABLE, net of allowance for loan losses of $139 and $133, respectively		38,917			34,515
PREMISES AND EQUIPMENT, net		507			530
ACCRUED INTEREST AND DIVIDENDS RECEIVABLE		483			586
OTHER ASSETS		527			113
TOTAL ASSETS	$	111,701		$	110,002
LIABILITIES
DEPOSITS	$	84,357		$	81,557
FHLB ADVANCES		7,750			9,583
OTHER LIABILITIES		728			518
TOTAL LIABILITIES		92,835			91,658
COMMITMENTS AND CONTINGENCIES
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
Treasury stock, at cost, 493,252 and 448,252 shares, respectively		(6,182	)		(5,642	)
Additional paid-in capital		13,818			13,762
Unearned compensation		(157	)		(246	)
Shares held in trust, at cost, 65,738 shares		(852	)		(852	)
Retained earnings		11,082			10,497
Accumulated other comprehensive income, net		1,142			810
TOTAL STOCKHOLDERS’ EQUITY		18,866			18,344
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	111,701		$	110,002

THE SOUTHERN BANC COMPANY, INC.

CONSOLIDATED STATEMENTS OF INCOME

(Dollar Amounts in Thousands, except per share data)

	Three Months Ended June 30,				Twelve Months Ended June 30,
	2003		2002		2003		2002
INTEREST INCOME:
Interest and fees on loans	$	602	$	604	$	2,374	$	2,581
Interest and dividends on securities available for sale		651		724		2,792		2,603
Interest and dividends on securities held to maturity		128		198		657		1,022
Other interest income		4		25		68		93
Total interest income		1,385		1,551		5,891		6,299
INTEREST EXPENSE:
Interest on deposits		538		678		2,518		3,356
Interest on borrowings		73		106		380		210
Total interest expense		611		784		2,898		3,566
Net interest income before provision for loan losses		774		767		2,993		2,733
Provision for loan losses		9		6		13		27
Net interest income after provision for loan losses		765		761		2,980		2,706
NON-INTEREST INCOME:
Fees and other non-interest income		62		29		170		142
Gain on sale of securities		38		26		354		41
Total non-interest income		100		55		524		183
NON-INTEREST EXPENSE:
Salaries and employee benefits		223		223		1,110		1,049
Office building and equipment expenses		26		83		295		271
Other operating expense		239		153		609		533
Total non-interest expense		488		459		2,014		1,853
Income before income taxes		377		357		1,490		1,036
PROVISION FOR INCOME TAXES		218		172		596		403
Net Income	$	159	$	185	$	894	$	633
EARNINGS PER SHARE: Basic	$	0.18	$	0.20	$	1.02	$	0.69
Diluted	$	0.18	$	0.20	$	1.00	$	0.69
DIVIDENDS DECLARED PER SHARE	$	0.0875	$	0.0875	$	0.350	$	0.350
AVERAGE SHARES OUTSTANDING:
Basic		875,448		911,123		876,172		911,123
Diluted		906,994		913,011		894,421		913,011

THE SOUTHERN BANC COMPANY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollar Amounts in Thousands)

	For The Twelve Months Ended
	June 30,
	2003			2002
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	894		$	633
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		58			49
Amortization (Accretion), net		209			8
Amortization of unearned compensation		145			120
Provision for loan losses		13			27
Net gain on sale of secondary market loans		(53	)		(20	)
Gain on sale of securities		(354	)		(42	)
Proceeds from sale of secondary market loans		3,372			1,656
Loans originated for secondary market		(3,369	)		(1,636	)
Change in assets and liabilities:
Decrease in accrued interest & dividends receivable		103			15
Decrease (increase) in other assets		(433	)		150
Increase (decrease) in other liabilities		40			(81	)
Net cash provided by operating activities		626			246
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of securities available for sale		(33,154	)		(38,307	)
Proceeds from maturities, principal payments, and sales of securities available for sale		22,872			14,668
Proceeds from sale of securities available for sale		10,965			6,752
Proceeds from maturities and principal payments on securities held to maturity		4,327			6,000
Proceeds from sale of FHLB stock		563			0
Net loan (originations) repayments		(4,416	)		3,045
Purchase of FHLB stock		0			(725	)
Capital expenditures, net		(35	)		(113	)
Net cash provided by (used in) investing activities		1,122			(8,680	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in deposits, net		2,800			1,715
Dividends paid		(310	)		(322	)
Purchase of treasury stock		(540	)		0
Increase (decrease) in FHLB advances, net		(1,833	)		9,583
Net cash provided by financing activities		117			10,976
Net increase in cash and cash equivalents		1,864			3,175
CASH AND CASH EQUIVALENTS, beginning of period		7,529			4,354
CASH AND CASH EQUIVALENTS, end of period	$	9,393		$	7,529
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the period for:
Income taxes	$	555		$	291
Interest	$	2,916		$	3,536