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The Southern Banc Company, Inc. Announces Preliminary Fourth Quarter Earnings

The Southern Banc Company, Inc.

GADSDEN, Ala., Aug. 21, 2020 (GLOBE NEWSWIRE) -- Gates Little, President and Chief Executive Officer of The Southern Banc Company, Inc. (OTCBB: SRNN), the holding company for The Southern Bank Company, announced preliminary unaudited results (subject to audit adjustments following the fiscal year-end audit) of operations for the fourth quarter and year ended June 30, 2020:

  • For the three months ended June 30, 2020, the Company reported net income of approximately $40,000, or $0.05 per basic and diluted share as compared to net income of approximately $95,000, or $0.12 per basic and diluted share, for the three months ended June 30, 2019. 
     

  • For the fiscal year ended June 30, 2020, the Company recorded net income of approximately $314,000, or $0.41 per basic and diluted share, as compared to net income of approximately $464,000, or $0.61 per basic and diluted share, for the fiscal year ended June 30, 2019.
     

  • For the three months ended June 30, 2020, net interest income before provision for loan losses decreased approximately $192,000, or (17.72%) as compared to the same period in 2019. The decrease in 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 $118,000, a decrease in other interest income of approximately $75,000 or (95.50%) offset in part by an increase in interest and dividends on securities of approximately $15,000.  The decrease in interest and fees on loans was primarily attributable to a decrease in factoring activity from some large clients, and a decrease in loans and leases outstanding.  The decrease in other interest income was primarily attributable to interest income earned on overnight funds in a falling rate environment. In addition, the COVID pandemic had a significant impact total interest income for the quarter. For the three months ended June 30, 2020, interest paid on deposits and borrowings increased approximately $14,000 as compared to the same period in 2019. Total deposits during the quarter increased approximately $5 million.
     

  • For the fiscal year ended June 30, 2020, interest income decreased approximately $106,000 or (1.93%) while interest expenses increased approximately $200,000, or 21.81%. The decrease in interest income for the fiscal year ended June 30, 2020 was primarily attributable to a decrease in interest and fees on loans and a decrease in interest and dividends on securities. For the fiscal year ended June 30, 2020 other interest income increased approximately $20,000 or 9.72% due to an increase in interest on overnight funds. For the fiscal year ended June 30, 2020, interest on deposits increased approximately $261,000, or 30.60% while interest expense on borrowings decreased approximately $61,000 or (93.20%). For the fiscal year ended June 30, 2020 provision for loan losses increased approximately $25,000, or 124.53% from approximately $20,000 for fiscal year 2019 to $44,000 for fiscal year 2020.
     

  • For the fiscal year ended June 30, 2020, non-interest income increased approximately $225,000, or 132.30% from $170,000 for fiscal year 2019 to $395,000 for fiscal year 2020.  The increase in non-interest income was primarily attributable to a net gain on the sale of securities available for sale of approximately $91,000, an increase in miscellaneous income of approximately $118,000 or 237.98% and an increase in customer service fees of approximately $16,000 or 12.97%.
     

  • For the three months ended June 30, 2020 total non-interest expenses increased approximately $72,000, or 7.26%, as compared to the same three-month period in 2019.  The increase in non-interest expense for the three-month period was primarily attributable to increases in professional service expenses of approximately $53,000, or 65.97%, data processing expenses of approximately $26,000 or 21.03%, occupancy expenses of approximately $11,000 or 18.02% and an increase in salaries and benefits of approximately $4,000, or 0.70%.
     

  • For the fiscal year ended June 30, 2020, total non-interest expenses increased approximately $98,000, or 2.41%, as compared to fiscal year 2019.  The increase in non-interest expense for the fiscal year was primarily attributable to increases in data processing service expenses of approximately $101,000, or 20.11%, professional services expense of approximately $4,000, or 0.92%, salary and benefit expenses of approximately $2,300, or 0.10%, occupancy expenses of approximately $20,000 or 8.74% offset in part by a decrease in other operating expenses of approximately $30,000 or (5.5%).

The Company’s total assets at June 30, 2020 was approximately $103.4 million as compared to $97.7 million at June 30, 2019.  Total stockholders’ equity was approximately $12.4 million, or 12.00% of assets and $11.8 million, or 12.00% of assets at June 30, 2020 and 2019, respectively.

The unaudited financial information for the three and twelve months ended June 30, 2020 has been prepared on the same basis as our audited financial information and includes, in the opinion of management, all adjustments necessary to present the data for such periods.  The Company expects to release its final year end results and its related audited financial statements in October 2020, following completion of the year-end audit. Historical results are not necessarily indicative of future results. The Bank has four full service banking offices located in Gadsden, Albertville, Guntersville, and Centre, AL, and one loan production office in Birmingham, AL. 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.

(Selected financial data attached)

THE SOUTHERN BANC COMPANY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollar Amounts in Thousands)

 

 

June 30,

 

 

June 30,

 

 

2020

 

 

2019

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

CASH AND CASH EQUIVALENTS 

$

25,766

 

 

$

17,697

 

SECURITIES AVAILABLE FOR SALE, at fair value                                     

 

25,972

 

 

 

18,567

 

FEDERAL HOME LOAN BANK (FHLB) STOCK

 

174

 

 

 

177

 

 

 

 

 

 

 

LOANS AND LEASES RECEIVABLE,
net of allowance for loan losses of $895 and $974, respectively         

 

49,138

 

 

 

58,874

 

PREMISES AND EQUIPMENT, net 

 

736

 

 

 

783

 

ACCRUED INTEREST AND DIVIDENDS RECEIVABLE

 

224

 

 

 

193

 

PREPAID EXPENSES AND OTHER ASSETS

 

1,422

 

 

 

1,416

 

 

 

 

 

 

 

TOTAL ASSETS  

$

103,432

 

 

$

97,705

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

DEPOSITS

$

88,766

 

 

$

82,341

 

FHLB ADVANCES

 

0

 

 

 

2,000

 

OTHER LIABILITIES

 

2,245

 

 

 

1,603

 

 

 

 

 

 

 

TOTAL LIABILITIES

 

91,011

 

 

 

85,945

 

 

 

 

 

 

 

 

 

 

 

 

 

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,
    806,086 shares outstanding

 

15

 

 

 

15

 

 Additional paid-in capital

 

13,907

 

 

 

13,887

 

 Shares held in trust,
    44,506 shares at cost

 

               (754

)

 

 

               (706

)

 Retained earnings

 

7,592

 

 

 

7,277

 

 Treasury stock, at cost,
    648,664 shares

 

             (8,825

)

 

 

             (8,825

)

 Accumulated other comprehensive income / (loss)

 

486

 

 

 

112

 

 

TOTAL STOCKHOLDERS’ EQUITY

 

12,421

 

 

 

11,760

 

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 

$

103,432

 

 

$

97,705

 

 

 

 

 

 

 


THE SOUTHERN BANC COMPANY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollar Amounts in Thousands, except per share data)

                                                                                                               

 

Three Months Ended

 

 

Year Ended

 

 

June 30,

 

 

June 30,

 

 

 

 

 

 

 

 

 

 

 

 

 

2020
(Unaudited)

 

 

2019

 

 

2020
(Unaudited)

 

2019

 

 

 

 

 

 

 

 

 

 

 

INTEREST INCOME:

 

 

 

 

 

 

 

 

 

 

 

  Interest and fees on loans

$

1,029

 

$

1,147

 

$

4,716

$

4,831

  Interest and dividends on securities

 

127

 

 

112

 

 

437

 

447

  Other interest income

 

3

 

 

78

 

 

224

 

204

 

             Total interest income

 

1,159

 

 

1,337

 

 

 

5,377

 

 

5,482

 

INTEREST EXPENSE:

 

 

 

 

 

 

 

 

 

 

  Interest on deposits

 

269

 

 

247

 

 

1,114

 

853

  Interest on borrowings

 

0

 

 

8

 

 

4

 

65

              Total interest expense

 

269

 

 

255

 

 

1,118

 

918

               Net interest income before provision
               for loan losses

 

890

 

 

1,082

 

 

 

4,259

 

 

4,564

  Provision for loan losses

 

0

 

 

12

 

 

44

 

19

              Net interest income after provision
                  for loan losses

 

890

 

 

1,070

 

 

 

4,215

 

 

4,545

 

NON-INTEREST INCOME:

 

 

 

 

 

 

 

 

 

 

   Fees and other non-interest income

 

26

 

 

30

 

 

136

 

120

   Gain / (loss) on sale of securities, net

 

91

 

 

0

 

 

91

 

0

   Miscellaneous income

 

111

 

 

26

 

 

168

 

50

   Total non-interest income

 

227

 

 

56

 

 

395

 

170

 

NON-INTEREST EXPENSE:

 

 

 

 

 

 

 

 

 

 

  Salaries and employee benefits

 

597

 

 

593

 

 

2,361

 

2,359

  Equipment and Occupancy expenses

 

70

 

 

59

 

 

254

 

233

  Professional Services Expense

 

133

 

 

80

 

 

455

 

451

  Data Processing Expense

 

148

 

 

123

 

 

605

 

504

  Other operating expense

 

116

 

 

137

 

 

506

 

535

                         Total non-interest expense

 

1,064

 

 

992

 

 

4,180

 

4,082

 INCOME BEFORE INCOME TAXES

 

53

 

 

134

 

 

         
           429

 

         
           633

   Provision for income taxes

 

           
           13

 

 

           
           39

 

 

           115

 

           169

NET INCOME (LOSS)

$

40

 

$

95

 

$

         
           314

$

         
           464

INCOME (LOSS) PER SHARE:
              Basic

 

 

$

       0.05

 

$

       0.12

 

 

 

$

       0.41

 

 

$

       0.61

              Diluted

$

       0.05

 

$

       0.12

 

$

       0.41

$

       0.61

DIVIDENDS DECLARED PER SHARE

$

        ---

 

$

        ---

 

 

$

         ---

 

$

         ---

 

 

 

 

 

 

 

 

 

 

 

AVERAGE SHARES OUTSTANDING:

 

 

 

 

 

 

 

 

 

 

              Basic

 

 766,826

 

 

 766,826

 

 

 766,826

 

 766,826

              Diluted

 

 766,826

 

 

 766,826

 

 

 766,826

 

 766,826