Southern Banc Co. Inc., Gadsden, AL (SRNN)

One Bank Stock I Hesitate to Recommend

I own stock in Southern Banc Co, but if you don't, consider yourself lucky! The Little brothers have really run it into the ground over the past 15 years. And although it's true that value can generally be salvaged out of almost any wreck in a sale, I don't see these guys letting go of the bank until there's next to nothing left of value in it.

Disclosure: As of this posting, I own shares of SRNN and may subsequently either dispose of them or purchase more.

Prospective Buyers

Southern Banc's deposits could really help one of these three nearby community banks compete with Big Banks in the area:

Exchange Bank of Alabama, Altoona, AL (private)
First Bancshares of Stevenson, Stevenson, AL (private)
Peoples Bank of Alabama, Cullman, AL (private)

Financial Snapshot
as of 03/31/2016
Total assets:
Tangible book value per share:
NPAs to assets:
Price to book:
Market cap:
Dividend yield:
Trailing 12-month return on assets:
- 0.18%
Trailing 12-month return on equity:
- 1.30%


Gates B. Little, Chairman, President, and CEO
Jim Little III, Director
Thomas F. Dowling III, Director

Red Flags

Since going public in 1995, SRNN has suffered a 3% decline in assets and incurred roughly $1.8M in losses. I've heard of a lost decade, but these scoundrels are working on their third!

Considering Southern Banc Co in the context of its peers may help to illustrate the extent of its fall into disrepair.

  • The Southern Bank Company has four branches: Its two biggest — in Gadsden and Center — hold a mere $28M and $31M in deposits, respectively. 
  • Six other banks in Gadsden are bigger, including two solid, and growing, community banks: River Bank & Trust and Exchange Bank of Alabama. The Gadsden branch of River Bank & Trust has $90M in deposits. The two branches of Exchange Bank of Alabama in Gadsden hold $95M between them.
  • Since 2010, deposits at the Gadsden branch of Southern Banc Co have shrunk by 15%, while River Bank & Trust grew its deposits there by 35%, and Exchange Bank of Alabama grew its by 11%.

As a shareholder, I would like to see Southern Banc Co sold. Given that its been in the Little family since it was founded in 1936 and is run by brothers who are still a long way from retirement age, I doubt it will be.


  • Confidential interviews with shareholders and analysts


  1. You still own this thing? I guess lightning could always strike.

  2. You still own this thing? I guess lightning could always strike.