The Southern Banc Company, Inc. (SRNN) 10QSB 2005 Q1 Quarterly report (small business)

EXHIBIT 99.1

FOR IMMEDIATE RELEASE	Contact: Mr. Gates Little.
	(256) 543-3860
	For Immediate Release
	November 10, 2004

THE SOUTHERN BANC COMPANY, INC. ANNOUNCES

FIRST QUARTER EARNINGS

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 net income of $139,000, or $.17 per share basic and $.16 per share diluted, for the quarter ended September 30, 2004, as compared to net income of $148,000, or $.17 per share basic and $.16 per share diluted, for the quarter ended September 30, 2003.

Gates Little, President and Chief Executive Officer of the Company, stated that the first quarter decrease in net income primarily resulted from an increase in non-interest expense of approximately $30,000 or 5.99% related to employee benefits, bank service charges, and regulatory compliance costs.

The Company’s total assets at September 30, 2004 were $107.0 million as compared to $106.4 million at June 30, 2004. Total stockholders’ equity at September 30, 2004, was $17.4 million as compare to $17.3 million at June 30, 2004.

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 NASDAQ 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)

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THE SOUTHERN BANC COMPANY, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(Dollar Amounts in Thousands)

	September 30, 2004			June 30, 2004
ASSETS
CASH AND CASH EQUIVALENTS	$	4,914		$	5,734
SECURITIES AVAILABLE FOR SALE, at fair value		59,918			56,717
SECURITIES HELD TO MATURITY, at amortized cost fair value of $4,040 and $4,474, respectively		3,789			4,194
FEDERAL HOME LOAN BANK STOCK		792			792
LOANS HELD FOR SALE		0			0
LOANS RECEIVABLE, net of allowance for loan losses of $135 and $144, respectively		36,172			37,477
PREMISES AND EQUIPMENT, net		480			486
ACCRUED INTEREST AND DIVIDENDS RECEIVABLE		411			439
PREPAID EXPENSES AND OTHER ASSETS		556			514
TOTAL ASSETS	$	107,032		$	106,353
LIABILITIES
DEPOSITS	$	82,215		$	82,005
FEDERAL HOME LOAN BANK ADVANCES		6,916			6,916
OTHER LIABILITIES		553			179
TOTAL LIABILITIES		89,684			89,100
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
Additional paid-in capital		13,922			13,910
Treasury stock, at cost, 562,452 shares		(7,347	)		(7,347	)
Unearned compensation		(44	)		(71	)
Shares held in trust, at cost, 58,901 and 34,799 shares, respectively		(982	)		(495	)
Retained earnings		11,404			11,341
Accumulated other comprehensive income (loss), net		380			(100	)
TOTAL STOCKHOLDERS’ EQUITY		17,348			17,253
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	107,032		$	106,353

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THE SOUTHERN BANC COMPANY, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Dollar Amounts in Thousands, except per share data)

	Three Months Ended September 30,
	2004		2003
INTEREST INCOME:
Interest and fees on loans	$	519	$	585
Interest and dividends on securities available for sale		654		552
Interest and dividends on securities held to maturity		71		120
Other interest income		11		15
Total interest income		1,255		1,272
INTEREST EXPENSE:
Interest on deposits		455		484
Interest on borrowings		79		87
Total interest expense		534		571
Net interest income before provision for loan losses		721		701
Provision for loan losses		0		0
Net interest income after provision for loan losses		721		701
NON-INTEREST INCOME:
Fees and other non-interest income		25		32
Miscellaneous Income, net		13		11
Total non-interest income		38		43
NON-INTEREST EXPENSE:
Salaries and employee benefits		305		285
Office building and equipment expenses		41		34
Professional services		53		66
Data processing expense		54		55
Other operating expense		78		61
Total non-interest expense		531		501
Income before income taxes		228		243
PROVISION FOR INCOME TAXES		89		95
Net Income	$	139	$	148
EARNINGS PER SHARE:
Basic	$	0.17	$	0.17
Diluted	$	0.16	$	0.16
DIVIDENDS DECLARED PER SHARE	$	0.0875	$	0.0875
AVERAGE SHARES OUTSTANDING:
Basic		842,026		880,352
Diluted		863,891		921,622

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THE SOUTHERN BANC COMPANY, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollar Amounts in Thousands)

	For The Three Months Ended September 30,
	2004				2003
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income	$	139			$	148
Adjustments to reconcile net income to net cash provided by operating activities:				��
Depreciation		10				10
Amortization, net		24				94
Amortization of unearned compensation		39				42
Provision for loan losses		0				0
Net gain on sale of secondary market loans		0				(9	)
Proceeds from sale of secondary market loans		50				474
Loans originated for secondary market		(50	)			(415	)
Change in assets and liabilities:
Decrease in accrued interest and dividends receivable		28				76
Decrease (increase) in other assets		(42	)			11
Increase (decrease) in other liabilities		118				(42	)
Net cash provided by operating activities		316				389
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of securities available for sale		(5,969	)			(9,086	)
Proceeds from maturities and principal payments on securities available for sale		3,562				9,137
Proceeds from maturities and principal payments on securities held to maturity		408				1,009
Net loan repayments (originations)		1,305				(24	)
Capital expenditures, net		(4	)			(6	)
Net cash (used in) provided by investing activities		(698	)			1,030
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase (decrease) in deposits, net		210				(585	)
Increase in advance payments by borrowers for taxes and insurance		0				7
Dividends paid		(76	)			(78	)
Proceeds from exercise of stock options		292				113
Purchase of stock to fund option trust		(864	)			0
Net cash used in financing activities		(438	)			(543	)
Net (decrease) increase in cash and cash equivalents		(820	)			876
CASH AND CASH EQUIVALENTS, beginning of period		5,734				9,393
CASH AND CASH EQUIVALENTS, end of period	$	4,914			$	10,269
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the period for:
Income taxes	$	0			$	78
Interest	$	536			$	569

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