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 September 30, 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 September 30, 1999, there were 1,055,098 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)
<TABLE>
<CAPTION>
September 30, June 30,
1999 1999
------------- -------------
(Unaudited)
ASSETS
<S> <C> <C>
CASH AND CASH EQUIVALENTS $ 6,717 $ 8,681
SECURITIES AVAILABLE FOR SALE 26,144 21,350
SECURITIES HELD TO MATURITY,
fair values of $26,570 and $23,646, respectively 26,620 23,707
LOANS RECEIVABLE, net 42,171 42,109
PREMISES AND EQUIPMENT, net 252 259
ACCRUED INTEREST AND DIVIDENDS RECEIVABLE 666 588
PREPAID EXPENSES AND OTHER ASSETS 201 181
--------------- ---------------
TOTAL ASSETS $ 102,771 $ 96,875
=============== ===============
LIABILITIES
DEPOSITS $ 80,683 $ 79,734
OTHER LIABILITIES 5,536 496
--------------- ---------------
TOTAL LIABILITIES 86,219 80,230
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock, par value $.01 per share
500,00 shares authorized, shares issued
and outstanding-- none 0 0
Common stock, par value $.01 per share,
1,454,750 shares issued, 3,500,000 authorized. 15 15
Treasury stock, at cost, 399,652 and 380,652 shares,
respectively (5,223) (4,991)
Additional paid-in capital 13,689 13,684
Unearned ESOP compensation (1,463) (1,532)
Retained Earnings 9,763 9,684
Unrealized gain on securities available for sale, net (229) (215)
--------------- ---------------
TOTAL STOCKHOLDERS' EQUITY 16,552 16,645
--------------- ---------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 102,771 $ 96,875
=============== ===============
</TABLE>
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, except per share data)
<TABLE>
<CAPTION>
Three Months Ended
September 30,
---------- ----------
1999 1998
---------- ----------
(Unaudited) (Unaudited)
INTEREST INCOME:
<S> <C> <C>
Interest and fees on loans $ 786 $ 793
Interest and dividends on securities available for sale 362 351
Interest and dividends on securities held to maturity 446 615
Other interest income 117 83
--------- -----------
Total interest income 1,711 1,842
INTEREST EXPENSE:
Interest on deposits 973 1,146
--------- -----------
Net interest income 738 696
Provision for loan losses 0 0
--------- -----------
Net interest income after provision
for loan losses 738 696
--------- -----------
NON-INTEREST INCOME:
Fees and other non-interest income 30 31
--------- -----------
NON-INTEREST EXPENSE:
Salaries and employee benefits 340 318
Office building and equipment expenses 69 63
Deposit insurance expense 12 13
Other operating expense 106 94
--------- -----------
Total non-interest expense 527 488
--------- -----------
Income before income taxes 241 239
PROVISION FOR INCOME TAXES 85 82
--------- -----------
Net Income $ 156 $ 157
========= ===========
EARNINGS PER SHARE-BASIC $ 0.17 $ 0.15
EARNINGS PER SHARE- DILUTED $ 0.17 $ 0.14
DIVIDENDS DECLARED PER SHARE $ 0.875 $ 0.875
</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
(Dollar Amounts in Thousands)
<TABLE>
<CAPTION>
For The Three Months Ended
September 30,
1999 1998
------------- ------------
(Unaudited) (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net Income $ 156 $ 157
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation 10 9
Amortization (accretion), net (7) (12)
Amortization of unearned compensation 91 85
Provision for loan losses 0 0
Change in assets and liabilities:
(Increase) decrease in accrued interest & dividends receivable (79) 85
(Increase) decrease in other assets (19) (84)
(Increase) decrease in other liabilities 35 96
------------- -----------
Total adjustments 32 179
------------- -----------
Net cash provided by (used in) operating activities 188 336
------------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of securities available for sale (6,169) (3,090)
Proceeds from maturities and principal payments on
securities available for sale 1,364 4,878
Purchases of securities held to maturity (4,500) (2,780)
Proceeds from maturities and principal payments on
securities held to maturity 1,584 3,760
Net loan (originations) repayments (62) (440)
Capital expenditures (4) (10)
------------- -----------
Net cash provided by (used in) investing activities (7,787) 2,318
------------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase (decrease) in deposits, net 949 495
Increase (decrease) in advance payments by borrowers
for taxes and insurance 12 6
Dividends paid (77) (92)
Contributions to plan trusts (17) (16)
Proceeds from exercise of stock options 0 0
Purchase of treasury stock (232) 0
Increase (decrease) in FHLB Advances 5,000 0
------------- -----------
Net cash provided by financing activities 5,635 393
Net increase (decrease) in cash and cash equivalents (1,964) 3,047
------------- -----------
CASH AND CASH EQUIVILENTS, beginning of period 8,681 6,422
------------- -----------
CASH AND CASH EQUIVILENTS, end of period $ 6,717 $ 9,469
============= ===========
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the period for:
Income taxes $ 85 $ 0
============= ===========
Interest $ 921 $ 1,146
============= ===========
Non-cash transactions:
Change in unrealized net gain on securities available for sale, net $ (14) $ 139
============= ===========
</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
September 30, 1999 and June 30, 1999, and for the three month period ended
September 30, 1999 and 1998, include the accounts of the Company, the Bank, and
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 months ended September 30, 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, 1999. The accounting policies followed by the Company are set forth in the
summary of significant accounting policies in the Company's June 30, 1999
consolidated financial statements.
2. RETIREMENT AND SAVINGS PLANS
Employee Stock Ownership Plan
The Bank 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 Bank 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 Bank's MRP provides for awards of common stock to directors and officers of
the Bank. A trust was formed for the purpose of purchasing shares of stock in
the open market for future awards of stock options under the MRP Plan. 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 29,404 shares at September 30, 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 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 Plan held 51,308 shares at September 30, 1999.
5
<PAGE>
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.
3. 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-month
periods ended September 30, 1999 and 1998. Common stock outstanding consists of
issued shares less treasury stock, unallocated ESOP shares, and shares owned by
the MRP and Stock Option plan trusts. Diluted earnings per share for the three
month periods ended September 30, 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 Stock 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
months ended September 30, 1999 and 1998, accompanied by the effect of this
accounting change on previously reported earnings per share:
<TABLE>
<CAPTION>
For the Three Months Ended:
- -------------------------- Earnings
September 30, 1999 Income Shares Per Share
<S> <C> <C> <C>
Net Income $ 156,000
--------------
Basic earnings per share:
Income available to common shareholders 156,000 910,221 $ 0.17
---------
Dilutive Securities:
Management recognition plan shares 16,309
Stock option plan shares 0
-------------- ------------
Dilutive earnings per share:
Income available to common shareholders
plus assumed conversions $ 156,000 926,530 $ 0.17
-------------- ------------ ---------
September 30, 1998
Net Income $ 157,000
--------------
Basic earnings per share:
Income available to common shareholders 157,000 1,078,596 $ 0.15
---------
Dilutive Securities:
Management recognition plan shares 24,449
Stock option plan shares 23,248
------------
Dilutive earnings per share:
Income available to common shareholders
plus assumed conversions $ 157,000 1,126,293 $ 0.14
-------------- ------------ ---------
</TABLE>
4. COMPREHENSIVE INCOME
The Company has classified certain securities as available for sale in
accordance with Financial Accounting Standards Board Statement No. 115. For the
three month period ended September 30, 1999 the net unrealized gain on these
securities increased by approximately $14,000. For the three month period ended
September 30, 1998 the net unrealized gain on these securities decreased by
$139,000.
6
<PAGE>
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
three-month periods ended September 30, 1999 and 1998, the Company recognized a
corresponding adjustment in the net unrealized gain component of equity.
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 three-month periods ended September 30, 1999 and 1998:
Three Months
Ended
September 30,
-------------------
1999 1998
---- ----
Net income $ 156 $ 157
Other comprehensive income (loss), net of tax:
Unrealized gain (loss) on securities (229) 139
Comprehensive income (loss) $ ( 73) $ 296
5. SHAREHOLDER RIGHTS PLAN
In July 1999, the Board of Directors of 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 Plan is designed to protect the Company's stockholders against certain
unsolicited attempts to acquire the Company. The Plan is not intended to prevent
an acquisition of the Company in which all stockholders are offered a fair price
for all of their shares.
The Rights were issued to stockholders of record at the close of business on
August 2, 1999, and they expire on July 15, 2009. The Rights 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.
The Rights do not interfere with the Company's business plans or affect its
financial position. The issuance of the Rights had no dilutive effect, will not
affect earnings per share, were not taxable to stockholders or the Company, and
did 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.
7
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The Southern Banc Company, Inc. (the "Company") was incorporated in the State of
Delaware in May 1995 for the purpose of becoming a holding company to own all of
the outstanding capital stock of The Southern Bank Company ("Bank"), formerly
the First Federal Savings & Loan Association of Gadsden.
COMPARISON OF FINANCIAL CONDITION AT SEPTEMBER 30 AND JUNE 30, 1999.
Total assets increased approximately $5,896,000 or 6.09% from $96.9 million at
June 30, 1999 to $102.8 million at September 30, 1999. During the period ended
September 30, 1999, net loans increased approximately $62,000 or 0.15%,
securities available for sale increased approximately $4.8 million or 22.45% and
securities held to maturity increased approximately $2.9 million or 12.29%.
Cash and cash equivalents decreased approximately $2.0 million or 22.62% from
$8.7 million to $6.7 million at September 30, 1999. The decrease in cash was
primarily attributable to purchases of investment securities during the period
ended September 30, 1999.
Accrued interest and dividends receivable increased approximately $78,000 or
13.27% from $588,000 at June 30, 1999 to $666,000 at September 30, 1999. Prepaid
expenses and other assets increased approximately $20,000 or 11.05% from
$181,000 at June 30, 1999 to $201,000 at September 30, 1999. This increase was
primarily attributable to an increase in prepaid expenses.
Total deposits increased approximately $949,000 or 1.19% from $79.7 million at
June 30, 1999 to $80.7 million at September 30, 1999. Other liabilities during
the period ended September 30, 1999 increased approximately $5,040,000 from
$496,000 to $5,536,000. The increase in other liabilities was primarily
attributable to an increase in short-term Federal Home Loan Advances in the
amount of $5,000,000. The Federal Home Loan Advances are used for general and
corporate purposes.
Total equity decreased approximately $93,000 or 0.56% from $16.65 million at
June 30, 1999 to $16.55 million at September 30, 1999. This change was primarily
attributable to an increase in retained earnings, additional paid-in capital,
amortization of unearned compensation and unrealized gain on securities
available for sale, offset in part by the payment of common stock dividends and
treasury stock repurchases. Treasury stock at September 30, 1999 was $5.2
million.
COMPARISON OF RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30,
1999 AND 1998.
The Company reported net income for the three months ended September 30, 1999 of
$156,000 compared with net income of $157,000 for the three months ended
September 30, 1998.
Net Interest Income. Net interest income for the three months ended September
30, 1999 was $738,000 as compared to $696,000 for the three months ended
September 30, 1998. Total interest income decreased approximately $131,000 or
7.11% for the three months ended September 30, 1999. This decrease was primarily
attributable to the maturity of securities during the three-month period. Total
interest expense decreased approximately $173,000 or 15.10% for the three months
ended September 30, 1999 compared with the three months ended September 30,
1998.
Provision for Loan Losses. No provision for loan losses was deemed necessary in
either of the three-month periods ended September 30, 1999 or 1998. The
allowance for loan losses is based on management's evaluation of possible loan
losses inherent in the Bank'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.
8
<PAGE>
Non-interest Income. Non-interest income decreased approximately $1,000 or 3.23%
from $31,000 to $30,000 for the three month period ended September 30, 1999
compared to the three month period ended September 30, 1998.
Non-interest Expense. Non-interest expense increased approximately $39,000 or
7.99% for the three month period ended September 30, 1999 from $488,000 at
September 30, 1998 to $527,000 at September 30, 1999. This increase was
primarily attributable to an increase in salaries and employee benefits expense.
Other operating expenses increased approximately $12,000 or 12.77% for the
three-month periods ended September 30, 1999 as compared to the three-month
period ended September 30, 1998. This increase was primarily attributable to
operating expenses relating to the operation of the holding company and
advertising expenses relating to the promotion of new products and services.
Provision for Income Taxes. For the three month period ended September 30, 1999,
provision for income tax expense increased $3,000 or 3.66% as compared to the
three-month period ended September 30, 1998.
Liquidity and Capital Resources. As a holding company, the Company conducts its
business through its subsidiary, the Bank. The Bank 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
Bank's average liquidity ratio well exceeded the required maximums at and during
the three month period ended September 30, 1999. The Bank adjusts its liquidity
levels in order to meet funding needs of deposit outflows, repayment of
borrowings and loan commitments. The Bank also adjusts liquidity as appropriate
to meet its asset and liability management objectives.
The Bank'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 Bank invests in short-term interest-earning
assets which provide liquidity to meet lending requirements.
The Bank is required to maintain certain levels of regulatory capital. At
September 30, 1999, the Bank exceeded all minimum regulatory capital
requirements.
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 Bank that could be
affected by this problem is provided by a third party service bureau. The
service bureau of the Bank has advised the Bank that it has resolved this
potential problem. However, if the service bureau has not resolved this
potential problem, the Bank 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 Bank.
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 Bank,
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
Bank 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 Bank,
receive payment for checks deposited by the Bank's customers,
9
<PAGE>
or invest excess funds if the FHLB 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 regulatory guidelines. Remediation and
testing efforts relating to the year 2000 were completed in December 1998. The
Company has also contacted its key vendors, suppliers and customers to determine
their year 2000 compliance.
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. The
Company estimates that the cost of testing and updating its systems for year
2000 compliance will be approximately $5,000.
MARKET AREA
The Bank considers its primary market area to consist of Etowah, Cherokee and
Marshall Counties in which the Bank has its four offices. The City of Gadsden in
which the Bank's main office is located is in Etowah County, approximately 65
miles northeast of Birmingham, Alabama. Based upon the 1990 population census,
the combined population of Etowah, Cherokee and Marshall Counties was
approximately 100,000.
The economy in the Bank's market area includes a mixture of manufacturing and
agriculture. For years the two major industrial employers were Goodyear Tire and
Rubber Company and Gulf States Steel Corporation. On February 4, 1999, Goodyear
Tire and Rubber Company announced that it would cut approximately 1,320 jobs by
year-end as it ceases tire production at the Gadsden, Alabama plant. Recently,
Goodyear announced that tire production would be reestablished at the Gadsden
plant. Goodyear plans to recall approximately 1,300 laid off workers by year-end
as truck and passenger tire production is restored. Approximately 200 workers
will remain employed at the Gadsden facility to operate a rubber-mixing center
and tire storage site. On July 1, 1999, Gulf States Steel Corporation, currently
employing 1,800, filed for relief under Chapter 11 Bankruptcy. While the company
is allowed to continue operations under Chapter 11, a significant negative
impact would be felt in the Bank's market area in the event Gulf States is
unable to overcome its financial problems. According to the Alabama Department
of Industrial Relations, the unemployment rates for June 1999 in Etowah,
Cherokee and Marshall Counties were 6.7%, 4.8% and 6.5%, respectively, as
compared to 4.5% for the state of Alabama.
FORWARD-LOOKING STATEMENTS
Management's discussion and analysis includes certain forward-looking statements
addressing, among other things, the Company's prospects for earnings, asset
growth and net interest margin. Forward-looking statements are accompanied by,
and identified with, such terms as "anticipates," "believes," "expects,"
"intends," and similar phrases. Management's expectations for the Company's
future involve a number of assumptions and estimates. Factors that could cause
actual results to differ from the expectations expressed herein include:
substantial changes in interest rates, and changes in the general economy;
changes in the Bank's strategies for credit-risk management, interest-rate risk
management and investment activities. Accordingly, any forward-looking
statements included herein do not purport to be predictions of future events or
circumstances and may not be realized.
10
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, the Company and any subsidiaries may be a party to
various legal proceedings incident to its or their business. At
September 30, 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 October 21, 1999, The Southern Banc Company, Inc. announced a
dividend in the amount of $.0875 per share on or about December 20,
1999 to stockholders of record at the close of business on November 19,
1999.
On April 30, 1999, the Company announced that its Board of Directors
had approved the repurchase of up to ten percent of its common stock,
or approximately 116,880. 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
Current Report on Form 8-K dated July 15, 1999, reporting
under Item 5 the adoption of a shareholder rights plan and a
dividend distribution of one common stock purchase right on
each outstanding share of the Company's common stock.
11
<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: November 10, 1999 By: /s/ James B. Little, Jr.
-------------------------------------------
James B. Little, Jr.
(Principal Executive and Financial Officer)
12
<TABLE> <S> <C>
<ARTICLE> 9
<CIK> 0000946453
<NAME> The Southern Banc Company, Inc.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-2000
<PERIOD-END> SEP-30-1999
<CASH> 710
<INT-BEARING-DEPOSITS> 6,006
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 26,144
<INVESTMENTS-CARRYING> 26,620
<INVESTMENTS-MARKET> 26,570
<LOANS> 42,269
<ALLOWANCE> 98
<TOTAL-ASSETS> 102,771
<DEPOSITS> 80,683
<SHORT-TERM> 0
<LIABILITIES-OTHER> 5,536
<LONG-TERM> 0
0
0
<COMMON> 15
<OTHER-SE> 16,537
<TOTAL-LIABILITIES-AND-EQUITY> 102,771
<INTEREST-LOAN> 786
<INTEREST-INVEST> 808
<INTEREST-OTHER> 117
<INTEREST-TOTAL> 1,711
<INTEREST-DEPOSIT> 973
<INTEREST-EXPENSE> 0
<INTEREST-INCOME-NET> 738
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<EXPENSE-OTHER> 527
<INCOME-PRETAX> 241
<INCOME-PRE-EXTRAORDINARY> 241
<EXTRAORDINARY> 0
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<NET-INCOME> 156
<EPS-BASIC> 0
<EPS-DILUTED> 0
<YIELD-ACTUAL> 2.94
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
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<ALLOWANCE-CLOSE> 98
<ALLOWANCE-DOMESTIC> 98
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
