The Southern Banc Company, Inc. Announces Third Quarter Earnings

The Southern Banc Company, Inc. (OTCBB: SRNN), the holding company for The Southern Bank Company announced a net loss of approximately $44,000, or $(0.06) per basic and diluted share, for the quarter ended March 31, 2012, as compared to a net loss of approximately $83,000, or $(0.11) per basic and diluted share, for the quarter ended March 31, 2011. For the nine month period ended March 31, 2012, the company recorded a net loss of approximately $76,000, or $(0.10) per basic and diluted share, as compared to a net loss of approximately $47,000, or $(0.06) per basic and diluted share, for the nine month period ended March 31, 2011.

Gates Little, President and Chief Executive Officer of the Company stated that the Company’s net interest income decreased approximately $11,000, or 2.0% during the three month period ended March 31, 2012 as compared to the same period in 2011. The decrease in the net interest income for the three month period was primarily attributable to a decrease in interest and fees on loans in the amount of approximately $41,000 offset in part by a decrease in interest paid on deposits of approximately $14,000. Net interest income for the nine month period ended March 31, 2012 increased approximately $22,000, or 1.3% as compared to the same nine month period in 2011. The increase in the net interest margin for the nine month period was primarily attributable to a decrease in total interest expense of approximately $132,000, or (15.4%), offset in part by a decrease in total interest income of approximately $110,000, or (4.3%). For the nine month period ended March 31, 2012, total non-interest income increased approximately $69,000, or 30.1%, while total non-interest expense increased approximately $114,000, or 5.7%, as compared to the same nine month period in 2011. The increase in non-interest income was primarily attributable to increases in the gain on the sale of securities available for sale of approximately $19,000, or 13.0%; customer service fees of approximately $8,000, or 17.4%; and miscellaneous income of approximately $43,000, or 120.0%. 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 one time expenses taken in 2011 due to a change in the bank’s core processor.

The Company’s total assets at March 31, 2012 were approximately $112.2 million, as compared to $95.4 million at June 30, 2011. Total stockholders’ equity was approximately $16.0 million, or approximately 14.3% of total assets, at March 31, 2012 as compared to approximately $15.9 million, or approximately 16.6% of total assets, at June 30, 2011.

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.

THE SOUTHERN BANC COMPANY, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(Dollar Amounts in Thousands)

March 31, June 30, 2012 2011 ASSETS CASH AND CASH EQUIVALENTS $ 5,778 $ 4,501 SECURITIES AVAILABLE FOR SALE, at fair value 76,723 60,567

SECURITIES HELD TO MATURITY, at amortized cost, fair value of $30 and $40, respectively

30 37 FEDERAL HOME LOAN BANK (FHLB) STOCK 1,062 665

LOANS AND LEASES RECEIVABLE, net of allowance for loan losses of $264 and $253, respectively

26,652 27,974 PREMISES AND EQUIPMENT, net 831 879 ACCRUED INTEREST AND DIVIDENDS RECEIVABLE 375 412 PREPAID EXPENSES AND OTHER ASSETS 765 402 TOTAL ASSETS $ 112,216 $ 95,437 LIABILITIES DEPOSITS $ 75,212 $ 70,313 FHLB ADVANCES 20,127 8,626 OTHER LIABILITIES 835 635 TOTAL LIABILITIES 96,174 79,574

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 13,887 13,887

Shares held in trust, at cost, 25,768 shares

(571 ) (571 ) Retained earnings 10,422 10,498

Treasury stock, at cost, 648,664 shares

(8,825 ) (8,825 ) Accumulated other comprehensive (loss) 1,114 859

TOTAL STOCKHOLDERS’ EQUITY

16,042 15,863

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

112,216

$ 95,437

THE SOUTHERN BANC COMPANY, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Dollar Amounts in Thousands, except per share data)

Three Months Ended Nine Months Ended March 31, March 31, 2012 2011 2012 2011 INTEREST INCOME: Interest and fees on loans $ 390 $ 430 $ 1,203 $ 1,371 Interest and dividends on securities 413 397 1,260 1,203 Other interest income 2 2 8 7

Total interest income

805 829

2,471

2,581

INTEREST EXPENSE:

Interest on deposits 222 236 655 801 Interest on borrowings 26 25 70 56 Total interest expense 248 261 725 857

Net interest income before provision for loan losses

557 568

1,746

1,724 Provision for loan losses 14 0 23 0

Net interest income after provision for loan losses

543 568

1,723

1,724

NON-INTEREST INCOME:

Fees and other non-interest income 20 15 55 47 Gain on sale of securities 33 0 161 142 Miscellaneous income 42 17 78 35 Total non-interest income 95 32 294 224

NON-INTEREST EXPENSE:

Salaries and employee benefits 422 362 1,253 1,042 Office building and equipment expenses 54 51 157 149 Professional Services Expense 67 67 223 197 Data Processing Expense 70 168 220 372 Other operating expense 90 82 268 247

Total non-interest expense

703 730 2,121 2,007 Income / (loss) before income taxes (65 ) (130 ) (104 ) (59 )

PROVISION / (BENEFIT) FOR INCOME TAXES

(21 ) (47 ) (28 ) (12 )

Net Income / (Loss)

(44

)

(83

)

(76

)

(47