The Southern Banc Company Stock

The Southern Banc Company, Inc. operates as the holding company for The Southern Bank company that provides various banking products and services in Alabama.

The company engages in the business of obtaining funds in the form of various deposit products and investing those funds in mortgage loans or single family real estate, commercial and consumer loans. The company operates from its offices in the northeast portion of Alabama and originates the majority of its loans in this market area. The company also operates a division that conducts accounts receivable management or factoring of commercial accounts.

The principal business of the company consists of accepting deposits from the general public through its main and branch offices and investing those funds in loans secured by real estate properties, commercial and consumer loans located in its primary market area, and factoring. In order to preserve liquidity, the Bank maintains a sizeable portfolio of investment and mortgage - backed securities. Substantially all of the company's mortgage-backed securities are guaranteed as to principal and interest by GNMA, Freddie Mac or Fannie Mae. The company's securities portfolio consists primarily of mortgage backed securities, municipal securities and government agency securities, including agency notes. The company maintains a substantial amount in interest-bearing deposits in other banks, primarily interest-bearing accounts with the FHLB of Atlanta, PNC Bank and South States Bank, its correspondents.

The company operates through full-service banking offices located in Gadsden, Albertville, Guntersville and Centre, Alabama, and commercial finance office located in Birmingham, Alabama. The company's business strategy has been to operate as a profitable and independent community-oriented financial institution dedicated to providing quality customer service. Generally, the company has sought to implement this strategy by using retail deposits as its sources of funds and maintaining most of its assets in loans secured by real estate properties located in its market area, consumer loans, commercial loans and leases, mortgage-backed securities issued by Federal Home Loan Mortgage Corporation (Freddie Mac), the Government National Mortgage Association (GNMA) and Federal National Mortgage Association (Fannie Mae), the U.S. government and agency securities, interest-earning deposits, and cash and equivalents.

Strategy

The company business strategy incorporates the following key elements remaining a community-oriented financial institution while maintaining a strong core customer base by providing quality service and offering customers the access to senior management and services that a community-based institution can offer; attracting a retail deposit base from the communities served by the bank's four banking offices; maintaining asset quality by emphasizing investment in real estate loans, commercial loans, consumer loans, leases, factoring, mortgage-backed securities and other securities issued or guaranteed by the U.S. government or agencies thereof; and maintaining liquidity and capital substantially in excess of regulatory requirements.

Regulations

The lending activities and other investments of the company must comply with various regulatory requirements, and the Banking Department and FDIC periodically examine the bank for compliance with various regulatory requirements. The company must file reports with the regulators describing its activities and financial condition. The company and the bank are also subject to certain reserve and capital requirements promulgated by the Federal Reserve.

As a state-chartered bank, the bank is regulated by the State of Alabama Banking Department (the "Banking Department") and the Federal Deposit Insurance Corporation (FDIC). As a bank holding company, the Company is regulated by the Board of Governors of the Federal Reserve System (the Federal Reserve).

History

The Southern Banc Company, Inc. was founded in 1936. The company was incorporated in the state of Delaware in 1995.