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 a net loss of approximately $41,000, or $(0.05) per basic and diluted share, for the quarter ended September 30, 2012, as compared to net loss of approximately $16,000, or ($0.02) per basic and diluted share, for the quarter ended September 30, 2011.

Gates Little, President and Chief Executive Officer of the Company stated that the Company’s net interest margins decreased approximately $15,000, or 2.5% during the quarter as compared to the same period in 2011. Net interest income for the quarter ended September 30, 2012 was approximately $581,000 as compared to approximately $596,000 for the quarter ended September 30, 2011. The decrease in the net interest margin for the quarter was primarily attributable to an increase in total interest expense of approximately $19,000 offset in part by an increase in total interest income of approximately $4,000. For the quarter ended September 30, 2012, total non-interest income increased approximately $36,000 or 40.1% while total non-interest expense increased approximately $25,000 or 32.1% as compared to the same three month period in 2011. The increase in non-interest income was primarily attributable to an increase in customer service fees of approximately $11,000 and an increase in miscellaneous income of approximately $45,000 offset in part by a decrease in the gain on sale of securities. The increase in miscellaneous income was primarily attributable to an increase in fees generated from the bank’s factoring operation. The increase in non-interest expense was primarily attributable to an increase in salaries and employee benefits relating to staff increases, offset in part by a decrease in data processing expenses relating to a change in the bank’s core processor.

The Company’s total assets at September 30, 2012 were $109.9 million, as compared to $111.3 million at June 30, 2012. Total stockholders’ equity was approximately $16.5 million at September 30, 2012 or 15.0% of total assets as compared to approximately $16.3 million at June 30, 2012 or approximately 14.6% 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.