EXHIBIT 20.1

August 2, 1999

To Our Stockholders:

On July 15, 1999, the Board of Directors of The Southern Banc Company, Inc. (the
"Company")  adopted a  shareholder  rights  plan (the  "Plan")  and  declared  a
dividend  distribution  of one common stock  purchase  right (a "Right") on each
outstanding  share of the  Company's  common  stock (the "Common  Stock").  This
letter  briefly  describes  the Plan and the Board's  reasons for adopting it. A
more detailed summary of the Plan is enclosed.

The Plan is designed to protect our  stockholders  against  certain  unsolicited
attempts to acquire the  Company,  including a partial or two-tier  tender offer
that does not treat all  stockholders  equally,  a squeeze-out  merger and other
abusive or unfair  takeover  tactics that the Board believes are not in the best
interests  of the  Company.  The  Rights  Plan is not  intended  to  prevent  an
acquisition of the Company in which all of our  stockholders  are offered a fair
price  for all of their  shares.  In this  connection,  at this  time we have no
indication that any third party is interested in acquiring the Company.

The Rights are being issued to  stockholders  of record at the close of business
on August 2, 1999 and they expire on July 15,  2009.  Because the Rights are not
immediately exercisable,  it is not necessary to send you a separate certificate
for the Rights. The Rights will automatically trade with the Common Stock.

The Rights would only become exercisable if one of the following were to occur:

(i)   a  public announcement  that a  person  has  acquired  15% or  more of the
      outstanding Common Stock;
(ii)  the commencement  of, or  announcement  of an  intention to make, a tender
      offer that would result in the  acquisition by a person or group of 15% or
      more of the outstanding Common Stock; or
(iii) the Company's Board of Directors  declares a 10% or greater stockholder to
      be an "Adverse Person," as defined in the Plan.

10 business  days  following  any of the above  events,  the Rights would become
exercisable  and  separate   certificates   representing  the  Rights  would  be
distributed to the stockholders of the Company.  We expect that the Rights would
begin to trade independently of the Common Stock at that time.

When the Rights first become exercisable, a holder would be entitled to buy from
the Company  one-hundredth  (1/100th)  of a share of Common Stock at an exercise
price of $30.00.  Upon the occurrence of certain triggering events, as set forth
below,  each Right would  entitle the holder to  purchase  additional  shares of
Common Stock,  or  securities  of a company that acquires the Company,  at a 50%
discount to their respective market values at such time. In other words:


          o If the Company is involved in a merger or other business combination
     at any time after a person or group has  acquired 15% or more of the Common
     Stock,  the  Rights  would  entitle  a holder  to buy a number of shares of
     common stock of the  acquiring  company  having a market value of twice the
     exercise  price of the Right.  For example,  if at the time of the business
     combination the acquiring  company's  common stock has a per share value of
     $30.00,  the holder of each Right  would be entitled to receive 2 shares of
     the acquiring company's common stock for $30.00.

          o Upon the  acquisition  by any  person or group of 15% or more of the
     Common Stock, the "flip-in"  provision of the Rights would be triggered and
     the Rights would entitle the holder to buy a number of additional shares of
     Common  Stock  having a market  value of twice  the  exercise  price of the
     Right.  Thus, if at the time of the  "flip-in,"  the Common  Stock's market
     value were $15 per share,  the holder of each Right  would be  entitled  to
     receive 4 shares of Common Stock for $30.00.

The Rights do not  interfere  with the  Company's  business  plans or affect its
financial position.  The issuance of the Rights has no dilutive effect, will not
affect  earnings per share,  is not taxable to you or the Company,  and will not
change  the way in which  the  Common  Stock is  traded  on the  American  Stock
Exchange.  Depending on  individual  circumstances,  stockholders  may recognize
taxable income, but only when (and if) the Rights become exercisable or upon the
occurrence of certain events thereafter.

In adopting the Plan,  your Board of Directors has  expressed its  confidence in
the future of the Company and its determination  that you, our stockholders,  be
given every  opportunity to participate fully in the future of The Southern Banc
Company.

Sincerely,

/s/ James P. Little, Jr.

James P. Little, Jr.
Chairman of the Board and President

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