NEWS RELEASE
                              FOR MORE INFORMATION
                              CONTACT
                              Mr. James B. Little, Jr.
                              Chairman of the Board and President
                              (256) 543-3860
                              --------------
                              FOR IMMEDIATE RELEASE
                              OCTOBER 16, 1998


                 THE SOUTHERN BANC COMPANY, INC.
               ANNOUNCES STOCK REPURCHASE PROGRAM

    Gadsden, Alabama ...  The Southern Banc Company, Inc.
(AMEX:SRN), the holding company for First Federal Savings and
Loan Association of Gadsden, Announced today that it is
commencing a stock repurchase program to acquire up to five
percent of its currently outstanding common stock, or
approximately 61,515 shares.  These stock repurchases are
independent from, and are in addition to, stock repurchases on
behalf of the company's stock benefit plans, of which the company
plans to repurchase 36,366 shares to partially fund the Stock
Option and Incentive Plan.  This would be one-fourth of the Stock
Option and Incentive Plan that was duly approved by the Company's
stockholders April 10, 1996.  The repurchase program will be
dependent upon market conditions, and there is no guarantee as to
the exact number of shares to be repurchased by the company.

     James B. Little, Jr., Chairman of the Board and President of
the company and the association, stated that the Board of
Directors have authorized the repurchase program.  Mr. Little
explained that management considers the company's common stock to
be an attractive investment.

     According to Mr. Little, stock repurchases by the company
generally would be effected through open market purchases,
although he did not rule out the possibility of unsolicited
negotiated transactions or other types of repurchases.  It is
expected that a reduction in the amount of the company's
outstanding stock would have the effect of increasing the
company's per share earnings and book value.

     At September 30, 1998, the company had total assets of 106
million and stockholder's equity of 18.9 million, or 17.8% of
total assets.  The association operates four banking offices in
Gadsden, Albertville, Guntersville, and Centre, Alabama.