FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1999
Commission File Number: 1-13964
The Southern Banc Company, Inc.
-----------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Delaware 63-1146351
-------------------- -------------------
(State of incorporation) (I.R.S. Employer
Identification No.)
221 S. 6th Street, Gadsden, Alabama 35901-4102
---------------------------------------- ------------------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (256) 543-3860
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past ninety days:
Yes X No ___
As of March 31, 1999, there were 1,168,798 shares of the registrant's
Common Stock, par value $0.01 per share, issued and outstanding.
Transitional small business disclosure format (check one): Yes No X
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
THE SOUTHERN BANC COMPANY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollar Amounts in Thousands)
March 31, June 30,
1999 1998
--------- --------
(Unaudited)
ASSETS
CASH AND CASH EQUIVALENTS $ 7,001 $ 6,422
SECURITIES AVAILABLE FOR SALE 20,854 22,239
SECURITIES HELD TO MATURITY,
fair values of $29,614 and $34,811,
respectively 28,961 34,077
LOANS RECEIVABLE, net 41,755 41,153
PREMISES AND EQUIPMENT, net 245 251
ACCRUED INTEREST AND DIVIDENDS RECEIVABLE 667 723
PREPAID EXPENSES AND OTHER ASSETS 357 222
--------- ---------
TOTAL ASSETS $ 99,840 $ 105,087
========= =========
DEPOSITS $ 81,168 $ 85,926
OTHER LIABILITIES 759 591
--------- ---------
TOTAL LIABILITIES 81,927 86,517
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock, par value $.01 per share,
500,000 shares authorized; shares issued
and outstanding -- none 0 0
Common stock, par $.01 per share,
1,454,750 shares issued and 1,168,798 shares
outstanding, 3,500,000 authorized 15 15
Treasury stock at cost (3,804) (3,000)
Additional paid-in capital 13,710 13,677
Unearned compensation (1,652) (1,602)
Retained earnings 9,594 9,433
Unrealized gain on securities available for
sale, net 50 47
--------- ---------
TOTAL STOCKHOLDERS' EQUITY $ 17,913 $ 18,570
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 99,840 $ 105,087
========= =========
The accompanying notes are an integral part of these condensed consolidated
statements.
2
<PAGE>
THE SOUTHERN BANC COMPANY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollar Amounts in Thousands)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
March 31, March 31,
---- ---- ---- ----
1999 1998 1999 1998
---- ---- ---- ----
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
INTEREST INCOME
<S> <C> <C> <C> <C>
Interest and fees on loans $ 802 $ 774 $2,396 $2,287
Interest and dividends on securities available for sale 312 322 972 934
Interest and dividends on securities held to maturity 548 693 1,740 2,180
Other interest income 59 60 230 192
------ ------ ------ ------
Total interest income 1,721 1,849 5,338 5,593
INTEREST EXPENSE:
Interest on deposits 966 1,114 3,190 3,414
------ ------ ------ ------
Net interest income 755 735 2,148 2,179
Provision for loan losses 0 0 27 0
Net interest income after provision ------ ------ ------ ------
for loan losses 755 735 2,121 2,179
------ ------ ------ ------
NON-INTEREST INCOME:
Fees & other non-interest income 35 31 143 72
------ ------ ------ ------
NON-INTEREST EXPENSE:
Salaries and employee benefits 353 351 1,109 1,111
Office building and equipment expenses 64 64 187 195
Deposit insurance expense 13 14 39 42
Other operating expense 92 109 28 289
------ ------ ------ ------
Total non-interest expense 522 538 1,618 1,637
------ ------ ------ ------
Income before income taxes 268 228 646 614
PROVISION FOR INCOME TAXES 92 79 221 218
------ ------ ------ ------
Net income $ 176 $ 149 $ 425 $ 396
====== ====== ====== ======
EARNING PER SHARE - BASIC $ 0.17 $ 0.14 $ 0.41 $ 0.37
EARNING PER SHARE - DILUTED $ 0.17 $ 0.13 $ 0.39 $ 0.35
DIVIDENDS DECLARED PER SHARE $0.0875 $0.0875 $0.2625 $0.2625
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
statements.
3
<PAGE>
THE SOUTHERN BANC COMPANY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For The Nine Months Ended
March 31, 1999 and 1998
(Dollar Amounts in Thousands)
<TABLE>
<CAPTION>
1999 1998
---- ----
(Unaudited) (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net income $ 425 $ 396
Adjustments to reconcile net income (loss) to net cash provided by (used in)
operating activities:
Depreciation 25 36
Amortization (accretion), net (10) (18)
Amortization of unearned compensation 302 270
Provision for loan losses 27 0
Change in assets and liabilities:
(Increase) decrease in accrued interest & dividends receivable 56 (92)
(Increase) decrease in other assets (135) 27
Increase (decrease) in other liabilities 183 289
-------- --------
Total adjustments 448 512
-------- --------
Net cash provided by (used in) operating activities 873 908
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of securities available for sale (13,298) (7,298)
Proceeds from maturities and principal payments on
securities available for sale 14,663 5,881
Purchases of securities held to maturity (5,770) (5,004)
Proceeds from maturities and principal payments on
securities held to maturity 10,918 11,459
Net loan (originations) repayments (629) (3,363)
Capital expenditures (19) (31)
-------- --------
Net cash provided by (used in) investing activities 5,865 1,644
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase (decrease) in deposits, net (4,758) (483)
Increase (decrease) in advance payments by borrowers
for taxes and insurance (14) (14)
Dividends paid (264) (271)
Contributions to plan trusts (319) (50)
Proceeds from exercise of stock options 0 35
Purchase of treasury stock (804) 0
-------- --------
Net cash provided by financing activities (6,159) (783)
-------- --------
Net increase (decrease) in cash and cash equivalents 579 1,769
CASH AND CASH EQUIVALENTS, beginning of period 6,422 5,807
-------- --------
CASH AND CASH EQUIVALENTS, end of period $ 7,001 $ 7,576
======== ========
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the period for:
Income taxes $ 142 $ 130
======== ========
Interest $ 3,190 $ 3,415
======== ========
Non-cash transactions:
Change in unrealized net gain on securities available for sale, net $ 3 $ 130
======== ========
</TABLE>
4
<PAGE>
THE SOUTHERN BANC COMPANY, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements as of
March 31, 1999 and June 30, 1998, and for the three and nine month periods ended
March 31, 1999 and 1998, include the accounts of the Company, the Association,
and the Company's wholly owned subsidiary, First Service Corporation of Gadsden.
All significant intercompany transactions and accounts have been eliminated in
consolidation. The condensed consolidated financial statements were prepared by
the Company without an audit, but in the opinion of management, reflect all
adjustments necessary for the fair presentation of financial position and
results of operations for the three and nine month periods ended March 31, 1999
and 1998. Results of operations for the current interim period are not
necessarily indicative of results expected for the entire fiscal year.
While certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to the rules and regulations
of the Securities and Exchange Commission, management believes that the
disclosures herein are adequate to make the information presented not
misleading. These condensed consolidated financial statements should be read in
conjunction with the consolidated financial statements and notes thereto
included in the Company's Annual Report on Form 10-KSB for the year ended June
30, 1998. The accounting policies followed by the Company are set forth in the
summary of significant accounting policies in the Company's June 30, 1998
consolidated financial statements.
2. RETIREMENT AND SAVINGS PLANS
Employee Stock Ownership Plan
The Association has an employee stock ownership plan (the "ESOP") for eligible
employees. The ESOP purchased 116,380 shares of the Company's common stock with
the proceeds of a $1,163,800 note payable from the Association and secured by
the common stock owned by the ESOP. Unearned compensation for the ESOP was
charged to stockholders' equity and is reduced ratably in connection with
principal payments under the terms of the plan. Unearned compensation is
amortized into compensation expense based on employee services rendered in
relation to shares which are committed to be released.
Management Recognition Plan
The Association's management recognition plan (the "MRP") provides for awards of
common stock to directors and officers of the Association. A trust was formed
for the purpose of purchasing shares of stock in the open market for future
awards under the MRP. The aggregate fair market value of the shares purchased by
the MRP is considered unearned compensation at the time of purchase and
compensation is earned ratably over the stipulated vesting period. Unearned
compensation related to the MRP is shown as a reduction to shareholders' equity
in the accompanying consolidated statements of condition. The Plan held 37,545
issued and outstanding shares at March 31, 1999.
Stock Option and Incentive Plan
The Company has a stockholder approved Option and Incentive Plan (the "Option
Plan"). The Option Plan provides for the grant of incentive stock options
(ISO's) to employees and non-incentive stock options (non-ISO's) to non-employee
directors. The exercise price is based on the market price of the common stock
on the date of grant. A
5
<PAGE>
trust was formed for the purpose of purchasing shares of stock in the open
market for issuance upon future exercises of stock options under the Option
Plan. The Option Plan Trust held 51,300 issued and outstanding shares at March
31, 1999.
Simplified Employee Pension Plan
The Company established a Simplified Employee Pension Plan ("SEP") for all
employees who have completed one year of service, pursuant to Section 408(k) of
the Internal Revenue Code of 1986. The Company makes a discretionary
contribution to the SEP on an annual basis.
4. EARNINGS PER SHARE
Basic earnings per share were computed by dividing net income by the weighted
average number of shares of common stock outstanding during the three and nine
month periods ended March 31, 1999 and 1998. Common stock outstanding consists
of issued shares less treasury stock, unallocated ESOP shares, and shares owned
by the MRP and Option Plan trusts. Diluted earnings per share for the three and
nine month periods ended March 31, 1999 and 1998, were computed by dividing net
income by the weighted average number of shares of common stock and the dilutive
effects of the shares awarded under the MRP and the Option Plans, based on the
treasury stock method using an average fair market value of the stock during the
respective periods.
The following table represents the earnings per share calculations for the three
and nine months ended March 31, 1999 and 1998, accompanied by the effect of this
accounting change on previously reported earnings per share:
<TABLE>
<CAPTION>
Per Share
Income Shares Amount
------ ------ ------
For the Three Months Ended:
- ---------------------------
March 31, 1999
<S> <C> <C> <C>
Net income $ 176,000
---------
Basic earnings per share:
Income available to common shareholders 176,000 1,019,512 $ 0.17
--------
Dilutive Securities:
Management recognition plan shares 24,449
Stock option plan shares 1,904
----------
Dilutive earnings per share:
Income available to common shareholders
plus assumed conversions $ 176,000 1,045,865 $ 0.17
--------- --------- --------
March 31, 1998
Net income $ 149,000
- ---------- ---------
Basic earnings per share:
Income available to common shareholders 149,000 1,059,533 $ 0.14
--------
Dilutive Securities:
Management recognition plan shares 32,590
Stock option plan shares 37,880
----------- ---------
Dilutive earnings per share:
Income available to common shareholders
plus assumed conversions $ 149,000 1,130,003 $ 0.13
----------- --------- --------
6
<PAGE>
For the Nine Months Ended:
- --------------------------
March 31, 1999
Net income $ 425,000
----------
Basic earnings per share:
Income available to common shareholders 425,000 1,045,071 $ 0.41
--------
Dilutive Securities:
Management recognition plan shares 24,449
Stock option plan shares 12,386
---------- ----------
Dilutive earnings per share:
Income available to common shareholders
plus assumed conversions $ 425,000 1,081,907 $ 0.39
---------- ---------- --------
March 31, 1998
Net income $ 396,000
-----------
Basic earnings per share:
Income available to common shareholders 396,000 1,057,808 $ 0.37
--------
Dilutive Securities:
Management recognition plan shares 32,590
Stock option plan shares 35,302
---------- ---------
Dilutive earnings per share:
Income available to common shareholders
plus assumed conversions $ 396,000 1,125,700 $ 0.35
---------- --------- --------
</TABLE>
5. COMPREHENSIVE INCOME
The Company adopted SFAS No. 130 July 1, 1998. SFAS No. 130 established
standards for reporting and display of comprehensive income and its components.
The Company has classified certain securities as available for sale in
accordance with Financial Accounting Standards Board Statement No. 115. For the
nine month period ended March 31, 1999 the net unrealized gain on these
securities increased by $3,000. For the nine month period ended March 31, 1998
the net unrealized gain on these securities increased by $130,000. Pursuant to
Statement No.115, any unrealized gain or loss activity of available for sale
securities is to be recorded as an adjustment to a separate component of
shareholders' equity, net of income tax effect. Accordingly, for the nine month
periods ended March 31, 1999 and 1998, the Company recognized a corresponding
adjustment in the net unrealized gain component of equity.
7
<PAGE>
Since comprehensive income is a measure of all changes in equity of an
enterprise that result from transactions and other economic events of the
period, this change in unrealized gain serves to increase or decrease
comprehensive income. The following table represents comprehensive income for
the nine month periods ended March 31, 1999 and 1998:
Nine Months
Ended
March 31,
------------------
1999 1998
---- ----
Net income $ 425 $ 396
Other comprehensive income (loss), net of tax:
Unrealized gain (loss) on securities 3 130
------ ------
Comprehensive income $ 428 $ 526
====== ======
6. PENDING ACCOUNTING PRONOUNCEMENTS
The AICPA has issued Statements of Position 98-1, "Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use". This statement
requires capitalization of external direct costs of materials and services;
payroll and payroll-related costs for employees directly associated; and
interests cost during development of computer software for internal use
(planning and preliminary costs should be expensed). Also, capitalized costs of
computer software developed or obtained for internal use should be amortized on
a straight-line basis unless another systematic and rational basis is more
representative of the software's use.
This statement is effective for financial statements for fiscal years beginning
after December 15, 1998 (prospectively) and is not expected to have a material
effect on the consolidated financial statements.
8
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Comparison of Financial Condition at March 31, 1999 and June 30, 1998.
Total assets decreased approximately $5.2 million or 4.99% from $105.1 million
at June 30, 1998 to $99.8 million at March 31, 1999. During the period ended
March 31, 1999, net loans increased approximately $602,000 or 1.46%, securities
available for sale decreased approximately $1.4 million or 6.23% and securities
held to maturity decreased approximately $5.1 million or 15.01%. The decrease in
securities available for sale and held to maturity was primarily attributable to
principal payments received during the period ended March 31, 1999.
Cash and cash equivalents increased approximately $579,000 or 9.02% from $6.4
million to $7.0 million at March 31, 1999. The increase in cash and cash
equivalents was primarily attributable to the maturities and principal payments
on investment securities.
Accrued interest and dividends receivable decreased approximately $56,000 or
7.75% from $723,000 at June 30, 1998 to $667,000 at March 31, 1999. Prepaid
expenses and other assets increased approximately $135,000 or 60.81% from
$222,000 at June 30, 1998 to $357,000 at March 31, 1999. This increase was
primarily attributable to an increase in prepaid federal income taxes.
Total deposits decreased approximately $4.8 million or 5.54% from $85.9 million
at June 30, 1998 to $81.2 million at March 31, 1999. Other liabilities during
the period ended March 31, 1999 increased approximately $168,000 or 28.43% from
$591,000 at June 30, 1998 to $759,000 at March 31, 1999. This increase was
primarily attributable to an increase in accrued federal and state income taxes.
Total equity decreased approximately $657,000 or 3.54% from $18.6 million at
June 30, 1998 to $17.9 million at March 31, 1999. This change was primarily
attributable to an increase in retained earnings, additional paid-in capital,
and amortization of unearned compensation, offset in part by the payment of
common stock dividends and treasury stock purchases. Treasury stock at March 31,
1999 was $3.8 million.
Comparison of Results of Operations for the Three and Nine Months Ended March
31, 1999 and 1998.
Net Income. The Company reported net income for the three and nine month periods
ended March 31, 1999 of $176,000 and $425,000, respectively. Net income for the
three month period increased approximately $27,000 or 18.12% from $149,000 at
March 31, 1998 to $176,000 at March 31, 1999. For the nine month period, net
income increased approximately $29,000 or 7.32% from $396,000 at March 31, 1998
to $425,000 at March 31, 1999.
Net Interest Income. Net interest income for the three months ended March 31,
1999 increased $20,000 or 2.72%. For the nine months ended March 31, 1999, net
interest income decreased approximately $31,000 or 1.42%. Total interest income
decreased approximately $128,000 or 6.92% and $255,000 or 4.56% for the three
and nine months ended March 31, 1999 and 1998, respectively. The decrease in
total interest income was primarily attributable to a decrease in investment
income.
Provision for Loan Losses. For the nine months ended March 31, 1999, the
provision for loan losses increased approximately $27,000. This increase was
primarily attributed to volume increases in consumer and mortgage loans. The
allowance for loan losses is based on management's evaluation of possible loan
losses inherent in the Association's loan portfolio. Management considers, among
other factors, past loss experience, current economic conditions, volume, growth
and composition of the loan portfolio, and other relevant factors.
Non-interest Income. Non-interest income increased approximately $4,000 or
12.90% from $31,000 to $35,000 for the three month period ended March 31, 1999
compared to the three month period ended March 31, 1998. For the nine month
period ended March 31, 1999 non-interest income increased approximately $71,000
or 98.61% from $72,000 to $143,000. The increase in non-interest income for the
three and nine months ended March 31, 1999 was
9
<PAGE>
primarily attributable to an increase in prepayment penalties and mortgage loan
origination fees. During the nine month period ended March 31, 1999, the
Association recorded gains on the sale of securities of approximately $33,000.
Non-interest Expense. Non-interest expense decreased approximately $16,000 or
2.97% for the three month period ended March 31, 1999 from $538,000 to $522,000.
For the nine month period ended March 31, 1999, non-interest expense decreased
approximately $19,000 or 1.16%. Salaries and employee benefits increased
approximately $2,000 or 0.57% for the three month period ended March 31, 1999
compared with the three month period ended March 31, 1998. This increase was
primarily attributable to salary and benefit expenses related to the Company's
employee benefit plans. For the nine month period ended March 31, 1999, salaries
and benefits decreased approximately $2,000 or 0.18% compared with the nine
month period ended March 31, 1998. Other operating expenses decreased by $17,000
or 15.60% and decreased by $6,000 or 2.08% for the three and nine month periods
ended March 31, 1999 and 1998, respectively.
Provision for Income Taxes. For the three month period ended March 31, 1999,
provision for income tax expense increased approximately $13,000 or 16.46%. For
the nine month period ended March 31, 1999, provision for income tax expense
increased approximately $3,000 or 1.38%. For the three month period ended March
31, 1999, income before income taxes increased approximately $40,000 or 17.54%
as compared to the three month period ended March 31, 1998. For the nine month
period ended March 31, 1999, income before income taxes increased approximately
$32,000 or 5.21% compared to the nine month period ended March 31, 1998.
Liquidity and Capital Resources. As a holding company, the Company conducts its
business through its subsidiary, the Association. The Association is required to
maintain minimum levels of liquid assets as defined by regulations of the Office
of Thrift Supervision. This requirement, which varies from time to time
depending upon economic conditions and deposit flows, is based upon a percentage
of deposits and short-term borrowings. The required ratio currently is 4.0%. The
Association's average liquidity ratio well exceeded the required maximums at and
during the three and nine month periods ended March 31, 1999. The Association
adjusts its liquidity levels in order to meet funding needs of deposit outflows,
repayment of borrowings and loan commitments. The Association also adjusts
liquidity as appropriate to meet its asset and liability management objectives.
The Association's primary sources of funds are deposits, payment of loans and
mortgage-backed securities, maturities of investment securities and other
investments. While scheduled principal repayments on loans and mortgage-backed
securities are a relatively predictable source of funds, deposit flows and loan
prepayments are greatly influenced by general interest rates, economic
conditions, and competition. The Association invests in short-term
interest-earning assets, which provide liquidity to meet lending requirements.
The Association is required to maintain certain levels of regulatory capital. At
March 31, 1999, the Association exceeded all minimum regulatory capital
requirements.
Recent Events. On February 4, 1999 the Goodyear Tire & Rubber Company announced
it would slash approximately 1,320 jobs as it halts tire production at the
Gadsden, Alabama factory. The layoffs are expected by year-end. However,
according to the news release, the plant will continue to mix rubber for other
Goodyear plants. Estimates range from 180 to 230 workers that will be retained
to run the rubber mixing operations. The Company is not able at this time to
determine the extent to which such layoffs may affect its results in operations.
Possible Year 2000 Computer Program Problems
A great deal of information has been disseminated about the global computer
crash that may occur in the Year 2000. Many computer programs that can only
distinguish the final two digits of the year entered (a common programming
practice in earlier years) are expected to read entries for the Year 2000 as the
Year 1900. All of the significant data processing of the Association that could
be affected by this problem is provided by a third party service bureau. The
service bureau of the Association has advised the Association that it expects to
resolve this potential problem before the Year 2000. However, if the service
bureau is unable to resolve this potential problem in time, the Association
would likely experience significant data processing delays, mistakes or
failures. These delays, mistakes or failures could have a material adverse
impact on the financial condition and results of operations of the Company.
10
<PAGE>
Risks to the Company if its computer systems are not Year 2000 compliant include
the inability to process customer deposits or checks drawn on the Association,
inaccurate interest accruals and maturity dates of loans and time deposits, and
the inability to update accounts for daily transactions. Other risks to the
Company exist if certain of its vendors', suppliers' and customers' computer
systems are not Year 2000 compliant. These risks include the inability of the
Association to communicate with its third party service bureau if phone systems
are not working, the interruption of business in the event of power outages, the
inability of loan customers to comply with repayment terms if their businesses
are interrupted, the inability to make payment for checks drawn on the
Association, receive payment for checks deposited by the Association's
customers, or invest excess funds if the Federal Home Loan Bank or correspondent
banks are not Year 2000 compliant. The Company's most important mission critical
system is the software and hardware responsible for maintaining and processing
general ledger, deposits, and loan accounts. The Company's Year 2000 Compliance
and Contingency Plans are structured in accordance with federal guidelines.
Remediation and testing efforts relating to the Year 2000 were completed before
December 31, 1998. The Company is in the process of contacting its key vendors,
suppliers and customers to determine their Year 2000 compliance. The Company
estimates that the cost of testing and updating its systems for Year 2000
compliance be approximately $5,000.
Although the Company currently believes that it will be Year 2000 compliant, the
risk of system failures cannot be eliminated. Also, the Company cannot guarantee
the performance of third parties as to which it has material relationships.
Forward-Looking Statement:
This Quarterly Report on Form 10-QSB contains forward-looking statements.
Additional written or oral forward-looking statements may be made by the Company
from time to time in filings with the Securities and Exchange Commission or
otherwise. The words "believe," "expect," "seek" and "intend," and similar
expressions identify forward-looking statements, which speak only as of the date
the statement is made. Such forward-looking statements are within the meaning of
that term in Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. Such statements may
include, but are not limited to, projections of income or loss, expenditures,
acquisitions, plans for future operations, financing needs or plans relating to
services of the Company, as well as assumptions relating to the foregoing.
Forward-looking statements are inherently subject to risk and uncertainties,
some of which cannot be predicted or qualified. Future events and actual results
could differ materially from those set forth in, contemplated by or underlying
the forward-looking statements.
The Company does not undertake, and specifically disclaims, any obligation to
publicly release the results of revisions which may be made to forward-looking
statements to reflect the occurrence of anticipated or unanticipated events or
circumstances after the date of such statements.
11
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, the Company and its subsidiaries may be a party to
various legal proceedings incident to its or their business. At March
31, 1999, there were no legal proceedings to which the Company or any
subsidiary was a party, or to which any of their property was subject,
which were expected by management to result in a material loss.
Item 2. Changes in Securities and Use of Proceeds
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
On April 15, 1999, The Southern Banc Company, Inc. announced a cash
dividend in the amount of $.0875 per share on or about June 14, 1999 to
stockholders of record at the close of business on May 14, 1999.
On April 15, 1999, the Board of Directors of the Company approved a
change in the corporate title of the Company's subsidiary, First
Federal Savings and Loan to The Southern Bank Company.
On April 30, 1999, the Company announced that its Board of Directors
had approved the repurchase of up to ten percent of its outstanding
common stock, or approximately 116,880 shares. These stock repurchases
are independent from, and would be in addition to, stock purchases on
behalf of the Company's stock benefit plans, if any. This 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.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 27 - Financial Data Schedule (SEC use only)
(b) Reports on Form 8-K
None
12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THE SOUTHERN BANC COMPANY
Date: May 11, 1999 By: /s/ James B. Little, Jr.
---------------------------------------
James B. Little, Jr.
(Principal Executive and Financial Officer)
13
<TABLE> <S> <C>
<ARTICLE> 9
<CIK> 0000946453
<NAME> The Southern Banc Company, Inc.
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-START> JUL-01-1998
<PERIOD-END> MAR-31-1999
<EXCHANGE-RATE> 1
<CASH> 245
<INT-BEARING-DEPOSITS> 6,756
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 20,854
<INVESTMENTS-CARRYING> 28,961
<INVESTMENTS-MARKET> 28,614
<LOANS> 41,853
<ALLOWANCE> 98
<TOTAL-ASSETS> 99,840
<DEPOSITS> 81,168
<SHORT-TERM> 0
<LIABILITIES-OTHER> 759
<LONG-TERM> 0
<COMMON> 15
0
0
<OTHER-SE> 17,898
<TOTAL-LIABILITIES-AND-EQUITY> 99,840
<INTEREST-LOAN> 2,396
<INTEREST-INVEST> 2,712
<INTEREST-OTHER> 230
<INTEREST-TOTAL> 5,338
<INTEREST-DEPOSIT> 3,190
<INTEREST-EXPENSE> 0
<INTEREST-INCOME-NET> 2,148
<LOAN-LOSSES> 27
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 1,618
<INCOME-PRETAX> 646
<INCOME-PRE-EXTRAORDINARY> 646
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 425
<EPS-PRIMARY> 0.41
<EPS-DILUTED> 0.39
<YIELD-ACTUAL> 3.07
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 103
<CHARGE-OFFS> 5
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 98
<ALLOWANCE-DOMESTIC> 98
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
