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 December 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 December 31, 1999, there were 1,033,498 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.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollar Amounts in Thousands)
December 31, June 30,
1999 1999
---- ----
ASSETS
CASH AND CASH EQUIVALENTS $ 13,187 $ 8,681
SECURITIES AVAILABLE FOR SALE 25,139 21,350
SECURITIES HELD TO MATURITY,
fair values of $21,000 and $23,646, respectively 21,183 23,707
LOANS RECEIVABLE, net 41,683 42,109
PREMISES AND EQUIPMENT, net 255 258
ACCRUED INTEREST AND DIVIDENDS RECEIVABLE 599 588
PREPAID EXPENSES AND OTHER ASSETS 352 182
--------- ---------
TOTAL ASSETS $ 102,398 $ 96,875
========= =========
LIABILITIES
DEPOSITS $ 80,546 $ 79,734
OTHER LIABILITIES 5,452 496
--------- ---------
TOTAL LIABILITIES 85,998 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, 421,252 and 380,652 shares,
Respectively (5,435) (4,991)
Additional paid-in capital 13,687 13,684
Unearned ESOP compensation (1,305) (1,532)
Retained earnings 9,820 9,684
Unrealized gain on securities available for sale, net (382) (215)
--------- ---------
TOTAL STOCKHOLDERS' EQUITY 16,400 16,645
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 102,398 $ 96,875
========= =========
The accompanying notes are an integral part of these condensed consolidated
statements.
2
<PAGE>
THE SOUTHERN BANC COMPANY, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollar Amounts in Thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
December 31, December 31,
1999 1998 1999 1998
---- ---- ---- ----
INTEREST INCOME:
<S> <C> <C> <C> <C>
Interest and fees on loans $ 802 $ 801 $ 1,588 $ 1,594
Interest and dividends on securities available for sale 410 309 772 660
Interest and dividends on securities held to maturity 447 577 893 1,192
Other interest income 101 88 218 171
---------- ---------- ---------- -----------
Total interest income 1,760 1,775 3,471 3,617
INTEREST EXPENSE:
Interest on deposits and borrowings 1,030 1,078 2,003 2,224
---------- ---------- ---------- -----------
Net interest income 730 697 1,468 1,393
Provision for loan losses 17 27 17 27
---------- ---------- ---------- -----------
Net interest income after provision
for loan losses 713 670 1,451 1,366
---------- ---------- ---------- -----------
NON-INTEREST INCOME:
Fees and other non-interest income 28 77 58 108
---------- ---------- ---------- -----------
NON-INTEREST EXPENSE:
Salaries and employee benefits 384 438 724 756
Office building and equipment expenses 67 60 136 123
Deposit insurance expense 12 13 24 26
Other operating expense 79 97 185 191
---------- ---------- ---------- -----------
Total non-interest expense 542 608 1,069 1,096
---------- ---------- ---------- -----------
Income before income taxes 199 139 440 378
PROVISION FOR INCOME TAXES 71 47 156 129
---------- ---------- ---------- -----------
Net Income $ 128 $ 92 $ 284 $ 249
========== ========== ========== ===========
EARNINGS PER SHARE-BASIC $ 0.14 $ 0.09 $ 0.32 $ 0.24
EARNINGS PER SHARE- DILUTED $ 0.14 $ 0.08 $ 0.31 $ 0.23
DIVIDENDS DECLARED PER SHARE $0.0875 $0.0875 $0.1750 $0.1750
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
statements.
3
<PAGE>
THE SOUTHERN BANC COMPANY, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollar Amounts in Thousands)
<TABLE>
<CAPTION>
For The Six Months Ended
December 31,
1999 1998
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net Income $ 284 $ 249
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation 18 17
Amortization (accretion), net (21) (11)
Amortization of unearned compensation 264 237
Provision for loan losses 17 27
Change in assets and liabilities:
(Increase) decrease in accrued interest & dividends receivable (11) 28
(Increase) decrease in other assets (170) (89)
(Increase) decrease in other liabilities 65 133
-------- --------
Total adjustments 162 342
-------- --------
Net cash provided by (used in) operating activities 446 591
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of securities available for sale (6,708) (10,559)
Proceeds from maturities and principal payments on
securities available for sale 2,677 11,560
Purchases of securities held to maturity (5,000) (5,780)
Proceeds from maturities and principal payments on
securities held to maturity 7,520 6,829
Net loan (originations) repayments 426 (1,313)
Capital expenditures (15) (13)
-------- --------
Net cash provided by (used in) investing activities (1,100) 724
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase (decrease) in deposits, net 812 (1,738)
Increase (decrease) in advance payments by borrowers
for taxes and insurance (22) (33)
Dividends paid (152) (179)
Contributions to plan trusts (34) (31)
Purchase of treasury stock (444) (756)
Borrowing on FHLB Advances 5,000 0
-------- --------
Net cash provided by (used in) financing activities 5,160 (2,737)
Net increase (decrease) in cash and cash equivalents 4,506 (1,422)
-------- --------
CASH AND CASH EQUIVILENTS, beginning of period 8,681 6,422
-------- --------
CASH AND CASH EQUIVILENTS, end of period $ 13,187 $ 5,000
======== ========
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the period for:
Income taxes $ 163 $ 71
======== ========
Interest $ 2,928 $ 2,225
======== ========
Non-cash transactions:
Change in unrealized net gain on securities available for sale, net $ (254) $ 47
======== ========
</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
December 31, 1999 and June 30, 1999, and for the three and six month period
ended December 31, 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 and six month period ended December 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, 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. At December 31, 1999, the Employee Stock
Ownership Plan had 60,884 shares allocated and 51,808 shares unallocated.
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 December 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 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 December 31, 1999.
5
<PAGE>
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 and six
month periods ended December 31, 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 and six month periods ended December 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 Stock Option plans, based on the treasury stock method using an average fair
market value of the stock during the respective periods.
For the three and six month periods ended December 31, 1999, there were
approximately 123,000 shares under option that were excluded from the earnings
per share calculation because these shares would have been anti-dilutive. The
following table represents the earnings per share calculations for the three and
six month periods ended December 31, 1999 and 1998:
<TABLE>
<CAPTION>
For the Three Months Ended Earnings
December 31, 1999 Income Shares Per Share
- ----------------- --------------- ------------ ------------
<S> <C> <C> <C>
Net Income $ 128,000
---------------
Basic earnings per share:
Income available to common shareholders 128,000 896,869 $ 0.14
------------
Dilutive Securities:
Management recognition plan shares 16,309
Stock option plan shares
--------------- ------------
Dilutive earnings per share:
Income available to common shareholders
plus assumed conversions $ 128,000 913,178 $ 0.14
--------------- ------------ ------------
For the Three Months Ended
December 31, 1998
- -----------------
Net Income $ 92,000
----------------
Basic earnings per share:
Income available to common shareholders 92,000 1,036,631 $ 0.09
------------
Dilutive Securities:
Management recognition plan shares 24,449
Stock option plan shares 9,483
--------------- ------------
Dilutive earnings per share:
Income available to common shareholders
plus assumed conversions $ 92,000 1,070,563 $ 0.08
--------------- ------------ ------------
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
For the Six Months Ended Earnings
December 31, 1999 Income Shares Per Share
- ----------------- --------------- ------------ ------------
<S> <C> <C> <C>
Net Income $ 284,000
---------------
Basic earnings per share:
Income available to common shareholders 284,000 903,450 $ 0.32
------------
Dilutive Securities:
Management recognition plan shares 16,309
Stock option plan shares
--------------- ------------
Dilutive earnings per share:
Income available to common shareholders
plus assumed conversions $ 284,000 919,759 $ 0.31
--------------- ------------ ------------
For the Six Months Ended
December 31, 1998
- -----------------
Net Income $ 249,000
---------------
Basic earnings per share:
Income available to common shareholders 249,000 1,057,417 $ 0.24
------------
Dilutive Securities:
Management recognition plan shares 24,449
Stock option plan shares 16,823
--------------- ------------
Dilutive earnings per share:
Income available to common shareholders
plus assumed conversions $ 249,000 1,098,689 $ 0.23
--------------- ------------ ------------
</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
six month period ended December 31, 1999 the net unrealized gain on these
securities decreased by approximately $167,000. For the six month period ended
December 31, 1998 the net unrealized gain on these securities increased by
$32,000. 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 six month periods ended December 31, 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 six month periods ended December 31, 1999 and 1998:
Six Months
Ended
December 31,
----------------------
1999 1998
---- ----
Net income $ 284 $ 249
Other comprehensive income (loss), net of tax:
Unrealized gain (loss) on securities (167) 32
-------- --------
Comprehensive income (loss) $ 117 $ 281
======== ========
7
<PAGE>
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.
8
<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 DECEMBER 31 AND JUNE 30, 1999.
Total assets increased approximately $5.5 million or 5.70% from $96.9 million at
June 30, 1999 to $102.4 million at December 31, 1999. During the period ended
December 31, 1999, net loans decreased approximately $426,000 or 1.01%,
securities available for sale increased approximately $3.8 million or 17.75% and
securities held to maturity decreased approximately $2.5 million or 10.65%.
Cash and cash equivalents increased approximately $4.5 million or 51.91% from
$8.7 million to $13.2 million at December 31, 1999. The increase in cash and
cash equivalents was primarily attributable to the maturities and principal
repayments on investment securities.
Accrued interest and dividends receivable increased approximately $11,000 or
1.87% from $588,000 at June 30, 1999 to $599,000 at December 31, 1999. Prepaid
expenses and other assets increased approximately $170,000 or 93.41% from
$182,000 at June 30, 1999 to $352,000 at December 31, 1999.
Total deposits increased approximately $812,000 or 1.02% from $79.7 million at
June 30, 1999 to $80.5 million at December 31, 1999. Other liabilities during
the period ended December 31, 1999 increased approximately $4.9 million or
999.19% from $496,000 at June 30, 1999 to $5.4 million at December 31, 1999. The
increase in other liabilities was primarily attributable to an increase in a
short-term Federal Home Loan Advance in the amount of $5,000,000 for possible
additional liquidity needs during the century date change.
Total equity decreased approximately $245,000 or 1.47% from $16.6 million at
June 30, 1999 to $16.4 million at December 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 December
31, 1999 was $5.4 million.
COMPARISON OF RESULTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED DECEMBER
31, 1999 AND 1998.
The Company reported net income for the three and six month periods ended
December 31, 1999 of $128,000 and $284,000, respectively. Net income for the
three month period increased approximately $36,000 or 39.13% from $92,000 at
December 31, 1998 to $128,000 at December 31, 1999. For the six month period,
net income increased approximately $35,000 or 14.06% from $249,000 at December
31, 1998 to $284,000 at December 31, 1999.
Net Interest Income. Net interest income for the three and six months ended
December 31, 1999 and 1998 increased $33,000 or 4.73% and $75,000 or 5.38%,
respectively. Total interest income decreased approximately $15,000 or 0.85% and
$146,000 or 4.04% for the three and six months ended December 31, 1999 and 1998,
respectively.
Provision for Loan Losses. For the three and six month periods ended December
31, 1999, provision for loan losses decreased approximately $10,000 or 37.04% as
compared to the three and six month periods ended December 31, 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.
9
<PAGE>
Non-interest Income. Non-interest income decreased approximately $49,000 or
63.64% from $77,000 to $28,000 for the three month period ended December 31,
1999 compared to the three month period ended December 31, 1998. For the six
month period ended December 31, 1999 non-interest income decreased approximately
$50,000 or 46.30% from $108,000 to $58,000. The decrease in non-interest income
for the three and six months ended December 31, 1999 was primarily attributable
to an decrease in prepayment penalties and mortgage loan origination fees.
During the six month period ended December 31, 1998, the Bank recorded gains on
the sale of securities of approximately $33,000. There were no gains recorded
during the six month period ended December 31, 1999.
Non-interest Expense. Non-interest expense decreased approximately $66,000 or
10.86% for the three month period ended December 31, 1999 from $608,000 to
$542,000. For the six month period ended December 31, 1999, non-interest expense
decreased approximately $27,000 or 2.46%. Salaries and employee benefits
decreased approximately $54,000 or 12.33% for the three month period ended
December 31, 1999 compared with the three month period ended December 31, 1998.
For the six month period ended December 31, 1999, salaries and benefits
decreased approximately $32,000 or 4.23% compared with the six month period
ended December 31, 1998. The decrease for the three and six month period ended
December 31, 1999 was primarily attributable to a decrease in salary and benefit
expenses related to the establishment of certain employee benefit plans,
subsequent to the conversion. Other operating expenses decreased by $18,000 or
18.56% and decreased by $6,000 or 3.14% for the three and six month periods
ended December 31, 1999 and 1998, respectively.
Provision for Income Taxes. For the three month period ended December 31, 1999,
provision for income tax expense increased approximately $24,000 or 51.06%. For
the six month period ended December 31, 1999, provision for income tax expense
increased approximately $27,000 or 20.93%. For the three month period ended
December 31, 1999, income before income taxes increased approximately $60,000 or
43.17% as compared to the three month period ended December 31, 1998. For the
six month period ended December 31, 1999, income before income taxes increased
approximately $62,000 or 16.40% compared to the six month period ended December
31, 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 and six month periods ended December 31, 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
December 31, 1999, the Bank exceeded all minimum regulatory capital
requirements.
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
10
<PAGE>
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.
11
<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
December 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
On November 17, 1999, the Registrant held its Annual Meeting of
Stockholders for the purpose of electing three directors whose term
will expire in 2002. All matters were approved. The results of the
voting at the Annual Meeting were as follows:
Proposal I - Election of Directors
NOMINEE TERM VOTES VOTES
EXPIRES FOR WITHHELD
- ----------------------- ---------- ------------- -------------------
Gates Little 2002 864,163 102,763
Thomas F. Dowling 2002 864,163 102,763
Fred Taylor 2002 863,663 103,263
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.
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: 2/11/2000 By: /s/ James B. Little, Jr.
-----------------------------
James B. Little, Jr.
(Principal Executive and
Financial Officer)
13
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-2000
<PERIOD-END> DEC-31-1999
<CASH> 1,142
<INT-BEARING-DEPOSITS> 12,040
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 25,139
<INVESTMENTS-CARRYING> 21,183
<INVESTMENTS-MARKET> 21,000
<LOANS> 41,798
<ALLOWANCE> 115
<TOTAL-ASSETS> 102,398
<DEPOSITS> 80,546
<SHORT-TERM> 0
<LIABILITIES-OTHER> 5,452
<LONG-TERM> 0
0
0
<COMMON> 15
<OTHER-SE> 16,385
<TOTAL-LIABILITIES-AND-EQUITY> 102,398
<INTEREST-LOAN> 1,588
<INTEREST-INVEST> 1,665
<INTEREST-OTHER> 218
<INTEREST-TOTAL> 3,471
<INTEREST-DEPOSIT> 2,003
<INTEREST-EXPENSE> 0
<INTEREST-INCOME-NET> 1,468
<LOAN-LOSSES> 17
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 1,069
<INCOME-PRETAX> 440
<INCOME-PRE-EXTRAORDINARY> 440
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 284
<EPS-BASIC> 0.32
<EPS-DILUTED> 0.31
<YIELD-ACTUAL> 2.94
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 115
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 115
<ALLOWANCE-DOMESTIC> 115
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
