SECURITY AND EXCHANGE COMMISSION
                       WASHINGTON, D. C. 20549

                              FORM 10-Q

          QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
                   SECURITIES EXCHANGE ACT OF 1934



  For quarter ended September 30, 2002 Commission file number 2-71249

                        SOUTH BANKING COMPANY
        (Exact name of registrant as specified in its charter)


             Georgia                                  58-1418696
(State  or  other  jurisdiction  of  (I.R.S.  Employer  Identification
incorporation or organization)    Number)

104   North   Dixon  Street,  Alma,  Georgia                     31510
(Address of principal executive offices)               (Zip Code)

Registrant's telephone number, including area code    (912)  632-8631



Former  name, former address and former fiscal year, if changed  since
last report.


      Indicate by check mark whether the registrant (1) has filed  all
reports required to be filed by Sections 13 or 15(d) of the Securities
Exchange  Act  of  1934 during the preceding 12 months  (or  for  such
shorter  period  that  the  registrant  was  required  to  file   such
report(s), and (2) has been subject to such filing requirement for the
past 90 days.

                          Yes    X        No



      Indicate  the  number  of  shares outstanding  of  each  of  the
registrant's classes of common stock, as of September 30, 2002.

      Common stock, $1.00 par value - 399,500 shares outstanding




                        SOUTH BANKING COMPANY
                        SOUTH BANKING COMPANY
                            ALMA, GEORGIA




Part I.   Financial Information

          Consolidated Financial Statements                      3-9

          Notes to Consolidated Financial Statements             10-11
           Management's Discussion and Analysis of Financial
           Condition and Results of Operations                   12-19

Part II.  Other Information                                      20-24



                         SOUTH BANKING COMPANY
                             ALMA, GEORGIA
                      CONSOLIDATED BALANCE SHEETS
                              (UNAUDITED)



                                        September 30,  December 31,
                                        2002           2001
                                 ASSETS

Cash  and due from banks                $  7,819,376   $ 11,140,462

Deposits in other banks -
  interest bearing                      $  1,972,000   $  1,273,000

Investment securities:
  Available for sale                    $ 16,683,964   $ 17,173,350

  Held to maturity                      $     47,693   $    147,536

Georgia  Bankers stock                  $    547,283   $    547,283

Federal  Home Loan Bank stock           $    438,100   $    426,100

Federal  funds sold                     $ 18,210,000   $ 10,252,000

Loans                                   $172,784,818   $172,378,811
Less:  Unearned discount                 (   285,380)   (   288,968)
Reserve  for loan losses                 ( 2,961,580)   ( 2,756,780)

                                        $169,537,858   $169,333,063

Bank  premises and equipment            $  6,628,712   $  6,715,813

Intangible  assets                      $  1,503,733   $  1,680,572

Other  assets                           $  4,897,248   $  6,101,344

Total  Assets                           $228,285,967   $224,790,523

The  accompanying  notes  are  an integral  part  of  these  financial
statements.
                         SOUTH BANKING COMPANY
                             ALMA, GEORGIA
                  CONSOLIDATED BALANCE SHEETS (con't)
                              (UNAUDITED)


                                        September 30,  December 31,
                                        2002           2001

                 LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities
Deposits:  Demand - noninterest
                      bearing           $ 29,344,664   $ 29,999,788
            Demand  -  interest bearing   33,464,574 	   32,764,586
             Savings                      12,896,654     10,537,057
             Time                        121,490,339    122,699,172

                                        $197,196,231   $196,000,603
Borrowing                                  5,402,971      5,581,251
Accrued expenses and other
    liabilities                            1,524,706      1,850,430
Federal     funds     purchased                    -              -
Note   payable  -  FHLB                    3,000,000      1,500,000

Total  Liabilities                      $207,123,908   $204,932,284

Stockholders' Equity
Common stock $1 par value; shares
 authorized - 1,000,000, shares issued
 and outstanding - September 30, 2002
 and December 31, 2001 - 399,500 and
  399,500, respectively                $    399,500    $    399,500
Surplus                                   3,070,831       3,070,831
Undivided   profits                      17,516,549      16,291,126
Accumulated other comprehensive
     income                                 175,179          96,782

Total  Stockholders' Equity            $ 21,162,059    $ 19,858,239

Total Liabilities and
  Stockholders' Equity                 $228,285,967    $224,790,523

The  accompanying  notes  are  an integral  part  of  these  financial
statements.
                         SOUTH BANKING COMPANY
                             ALMA, GEORGIA
                   CONSOLIDATED STATEMENTS OF INCOME
                              (UNAUDITED)


                   Three       Three        Nine        Nine
                   Months      Months       Months      Months
			 Ended       Ended        Ended       Ended
                   September   September    September   September
			 30, 2002    30, 2001     30, 2002    30, 2001
Interest Income:
 Interest & fees
  on loans         $ 3,426,126 $ 4,153,805  $10,303,079 $12,896,895
 Interest on
  Federal funds sold    84,136     146,261      237,201     665,928
 Interest on deposits
  with other banks      15,085      13,288       34,272      36,056
 Interest on
  investment
  securities:
  U.S. Treasury          3,965       7,773       18,977      23,225
  U.S. Government
   agencies            177,776     207,835      520,421     697,111
  Mortgage backed
   bonds                 1,047       3,750        4,061      13,744
  State & municipal
   Subdivisions         11,855      14,605       39,878      51,494
 Other                   9,181      12,914       29,241      47,680

Total Interest
 Income            $ 3,729,171 $ 4,560,231  $11,187,130 $14,432,133
Interest Expense:
 Interest on
  deposits         $ 1,204,142 $ 2,154,026  $ 3,943,401 $ 7,088,071
 Interest on other
  borrowings            62,552      93,047      189,323     361,241

Total Interest
 Expense           $ 1,266,694 $ 2,247,073  $ 4,132,724 $ 7,449,312
Net interest
 income            $ 2,462,477 $ 2,313,158  $ 7,054,406 $ 6,982,821
Provision for loan
 losses                320,000     242,500      762,000     553,000
Net interest income
 after provision
 for loan losses   $ 2,142,477 $ 2,070,658  $ 6,292,406 $ 6,429,821



The  accompanying  notes  are  an integral  part  of  these  financial
statements.
                         SOUTH BANKING COMPANY
                             ALMA, GEORGIA
               CONSOLIDATED STATEMENTS OF INCOME (con't)
                              (UNAUDITED)


                   Three       Three        Nine        Nine
                   Months      Months       Months      Months
                   Ended       Ended        Ended       Ended
                   September   September    September   September
			 30, 2002    30, 2001     30, 2002    30, 2001
Other Operating Income:
 Service charge on
  deposit accounts $  456,014  $  472,432   $1,303,686  $1,313,797
 Commission on
  Insurance            22,518      17,421       67,167      62,483
 Other income          68,536     143,129      386,676     702,647
 Computer processing
  Fees                136,344     132,758      433,486     399,655
 Gain (loss) on sale
  of securities         2,736   (   4,906)       4,810   (   4,906)
 Financial service
  income               32,063           -       89,459           -

Total Other
 Operating Income  $  718,211  $  760,834   $2,285,284  $2,473,676

Other Operating
 Expenses:
 Salaries          $  954,193  $1,000,467   $2,790,229  $2,913,589
 Profit sharing &
    personnel expense 171,061     178,485      502,736     541,223
 Occupancy expense    133,623     125,606      395,041     386,585
 Furniture &
  fixtures expense    262,557     277,118      817,249     806,181
 Payroll taxes         60,066      61,490      182,908     186,173
 Data processing       35,532      81,130      175,674     234,830
 Other operating
  Expenses            570,466     568,383    1,848,637   1,773,672

Total Other
 Operating Expenses $2,187,498  $2,292,679   $6,712,474  $6,842,253

Income before
 income taxes       $  673,190  $  538,813   $1,865,216  $2,061,244
Applicable income
 taxes                227,167     155,592      639,793     668,913

Net Income         $  446,023  $  383,221   $1,225,423  $1,392,331


The  accompanying  notes  are  an integral  part  of  these  financial
statements.
                         SOUTH BANKING COMPANY
                             ALMA, GEORGIA
                   CONSOLIDATED STATEMENTS OF INCOME
                   AND COMPREHENSIVE INCOME (con't)
                              (UNAUDITED)


                   Three       Three        Nine        Nine
                   Months      Months       Months      Months
                   Ended       Ended        Ended       Ended
                   September   September    September   September
                   30, 2002    30, 2001     30, 2002    30, 2001
Other comprehensive
 income, net of tax:
 Unrealized gains
 (losses) on
  Securities       $    53,883 $    91,555  $    78,397 $   265,359

Other Comprehensive
 Income (Loss)     $    53,883 $    91,555  $    78,397 $   265,359

Comprehensive
 Income            $   499,906 $   474,776  $ 1,303,820 $ 1,657,690


Per share data based
 on weighted average
 outstanding shares

 Weighted average
  outstanding
  shares               399,500     399,500      399,500     399,500

Net Income         $      1.25 $       .96  $      3.26 $      3.49

The  accompanying  notes  are  an integral  part  of  these  financial
statements.
                         SOUTH BANKING COMPANY
                             ALMA, GEORGIA
                       STATEMENTS OF CASH FLOWS
                              (UNAUDITED)


                                         Nine Months    Nine Months
                                         Ended          Ended
                                         September      September
                                         30, 2002       30, 2001

Cash Flows from Operating Activities:
  Net income                             $  1,225,423   $  1,392,331
 Add expenses not requiring cash:
  Provision for depreciation and
       Amortization                           822,109        810,920
    Provision  for  loan  losses              762,000        553,000
  Bond portfolio gains (losses)           (     4,805)   (     4,906)
   Gain on sale of other real estate owned          -              -
   Increase  (decrease)  in  taxes  payable   241,111         97,309
 Increase (decrease) in interest
   payable                                (   565,989)       105,642
  Increase (decrease) in other liabilities(       846)         9,191
 (Increase) decrease in interest
      receivable                              191,043         17,563
  (Increase) decrease in prepaid expenses (   106,723)   (   187,837)
  (Increase)  decrease  in other  assets    1,076,489    (   102,956)
  Recognition of unearned loan income     (     2,035)   (     2,289)

Net  Cash Used in Operating Activities    $ 3,637,777   $  2,687,968

Cash Flows from Investing Activities:

 Proceeds from sale of investment
   securities - available for sale        $         -   $    295,094
 Proceeds from maturities of
  investment securities - available
    for  sale                              12,277,562     21,894,982
 Purchase of investment securities -
   available for sale                     (11,651,098)   (17,842,279)
  Net loans to customers                  (   964,760)   (10,992,191)
  Purchase of premise and equipment       (   568,915)   ( 1,580,162)
 Proceeds from sale of premises and
         equipment                                  -        645,197
 Proceeds from maturity of investment
    securities  -  held  to  maturity         100,000              -
 Purchase of investment securities -
      held    to    maturity                        -              -
    Purchase    of   equity   securities            -              -

The  accompanying  notes  are  an integral  part  of  these  financial
statements.
                         SOUTH BANKING COMPANY
                             ALMA, GEORGIA
                       STATEMENTS OF CASH FLOWS
                              (UNAUDITED)

                                         Nine Months    Nine Months
                                         Ended          Ended
                                         September      September
                                         30, 2002       30, 2001

Cash Flows from Investing Activities:(con't)

Purchase of FHLB stock                   $(   12,000)   $          -

Net  Cash Used in Investing Activities   $(  819,211)   $( 7,579,359)

Cash Flows from Financing Activities:

 Net increase(decrease)in demand
   deposits, NOW and money market        $    44,864    $  4,311,230
 Net increase(decrease)in savings
    and  time  deposits                    1,150,764     (   500,694)
  Net increase(decrease)in borrowings     (  178,280)    (   328,310)
      Dividends     paid                           -		       -
    Redemptions   of   company    stock            -               -
 Increase(decrease)in federal
       funds     sold                              -               -
  Increase(decrease)note payable - FHLB    1,500,000     ( 1,040,000)
Net Cash Provided (Used) From
  Financing Activities                   $ 2,517,348    $  2,442,226

Net Increase(Decrease)in Cash
  and Cash Equivalents                   $ 5,335,914    $( 2,449,165)
Cash and Cash Equivalents at
  Beginning  of  Period                   22,665,462      24,430,193

Cash and Cash Equivalents at
  End of Period                          $28,001,376    $ 21,981,028

The  accompanying  notes  are  an integral  part  of  these  financial
statements.
                       SOUTH BANKING COMPANY
                           ALMA, GEORGIA
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


  Basis of Presentation

       The  accounting  and  financial  reporting  policies  of  South
  Banking  Company and its subsidiaries conform to generally  accepted
  accounting  principles and to general practice  within  the  banking
  industry.   The  consolidated statements  include  the  accounts  of
  South  Banking  Company  and  its wholly  owned  subsidiaries.   All
  material   intercompany   accounts  and   transactions   have   been
  eliminated  in  consolidation.  The accompanying  interim  financial
  statements   are   unaudited.    In   management's   opinion,    the
  consolidated  financial statements reflect a  fair  presentation  of
  the  consolidated  financial position of South Banking  Company  and
  subsidiaries, and the results of its operations and its  cash  flows
  for  the  interim  periods presented, in conformity  with  generally
  accepted  accounting principles.  These interim financial statements
  should  be read in conjunction with the audited financial statements
  and  footnote  disclosures in the Bank's 10K  for  the  fiscal  year
  ended December 31, 2001.

       Basic  earnings  per share have been computed by  dividing  net
  income  (the  numerator) by the weighted average  number  of  common
  shares (the denominator)for the period.

       In  June 1997, the FASB issued SFAS No. 131, "Disclosures about
  Segments  of an Enterprise and Related Information".  SFAS  No.  131
  requires  that  public  companies report certain  information  about
  operating segments in complete sets of financial statements  of  the
  company  and  in  condensed financial statements of interim  periods
  issued  to  shareholders.  It also requires  that  public  companies
  report  certain information about their products and  services,  the
  geographic  areas in which they operate, and their major  customers.
  SFAS  No.  131 applies to fiscal years beginning after December  15,
  1997.   South  Banking  Company  is  a  four  bank  holding  company
  operating  primarily in Southeast Georgia.  The primary  purpose  of
  the  company  is  the  delivery  of financial  services  within  its
  market.  Each  of  the  company's entities  are  part  of  the  same
  reporting  segment,  whose operating results are regularly  reviewed
  by  management.   Therefore, consolidated financial  statements,  as
  presented,  fairly reflect the operating results  of  the  financial
  services segment of our business.

        In   June   1997,   FASB  issued  SFAS  No.  130,   "Reporting
  Comprehensive Income" ("SFAS 130").  SFAS 130 established  standards
  for   reporting  and  display  of  comprehensive  income   and   its
  components in the financial statements.  SFAS 130 applies to  fiscal
  years  beginning  after  December  15,  1997.   Reclassification  of
  financial  statements  for earlier periods  has  been  provided  for
  comparative purposes.

                         SOUTH BANKING COMPANY
                             ALMA, GEORGIA
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


       During  1998,  the  FASB issued SFAS No. 133,  "Accounting  for
  Derivative  Instruments and Hedging Activities"("SFAS  133"),  which
  established  accounting  and  reporting  standards  for   derivative
  instruments  and  for  hedging activities.  The  statement  requires
  that  all  derivatives be recognized as either assets or liabilities
  in  the  statement  of financial position and be  measured  at  fair
  value.   SFAS  133 is effective for fiscal quarters  of  all  fiscal
  years  beginning  after  June  15,  1999;  earlier  application   is
  permitted.    The   company  does  not  hold  or  issue   derivative
  instruments  as  defined  by SFAS 133; and accordingly,  it  is  the
  opinion of management that there will be no future impact from  this
  recent accounting standard.

        The   Financial  Accounting  Standards  Board  (FASB)   issued
  Statement   of   Financial  Standards  (SFAS)  No.   141,   Business
  Combinations,  and  SFAS  No.  142, Goodwill  and  Other  Intangible
  Assets, on July 20, 2001.

       SFAS  No, 142 provides that all business combinations shall  be
  accounted  for using the purchase method of accounting; the  use  of
  the  pooling-of-interests method is now prohibited.  The  provisions
  of  SFAS No. 141 apply to all business combinations initiated  after
  June  30, 2001 or to all business combinations accounted for by  the
  purchase  method  that  are  completed after  June  30,  2001.   The
  Company  has  not  been involved in any recent business  combination
  discussions.

       SFAS No. 142 provides that goodwill shall not be amortized  but
  should  be tested for impairment on an annual basis, using  criteria
  prescribed  in  the statement.  If the carrying amount  of  goodwill
  exceeds its implied fair value, as recalculated, an impairment  loss
  equal  to  the  excess  shall be recognized.  Recognized  intangible
  assets  other  than goodwill should be amortized over  their  useful
  lives  and reviewed for impairment in accordance with SFAS No.  121,
  Accounting  for the Impairment of Long-Lived Assets  and  for  Long-
  Lived  Assets  to Be Disposed Of (superseded by SFAS  No.  144,  see
  discussion  which  follows).  SFAS No. 142  will  be  effective  for
  fiscal years beginning after December 15, 2001.

                       SOUTH BANKING COMPANY
                             ALMA, GEORGIA
                MANAGEMENT'S DISCUSSION AND ANALYSIS OF
             FINANCIAL CONDITION AND RESULTS OF OPERATION


       The  Company's  intangible assets  at  December  31,  2001  are
  classified  as intangible assets other than goodwill.  Approximately
  $1.576  million of the intangibles recorded on the balance sheet  at
  December  31,  2001 represents the remaining unamortized  intangible
  related  to  the Company's 2000 acquisition of three branch  offices
  from  another  bank.  The balance of $104 thousand is the  remaining
  intangibles  from the original purchase of the bank  in  1996.   The
  intangible  are  being  amortized  over  eight  to  ten   years   in
  accordance with SFAS No. 72, Accounting for Certain Acquisitions  of
  Banking  or  Thrift Institutions, which was not superseded  by  SFAS
  No.   142.   During  December  2001,  the  FASB  announced  it  will
  undertake  a  limited-scope  project  to  reconsider  part  of   the
  guidance  in  SFAS  No. 72.  Issuance of a final  statement  is  not
  expected until the fourth quarter of 2002.

      SFAS No. 144, Accounting for the Impairment or Disposal of Long-
  Lived  Assets  and  for Long-Lived Assets to  Be  Disposed  Of,  was
  issued  by  the FASB on October 3, 2001 and is effective for  fiscal
  years   beginning   after  December  15,   2001.    This   statement
  effectively supersedes SFAS No. 121 and Accounting Principles  Board
  (APB)  Opinion No. 30 and requires that long-lived assets, including
  discontinued  operations, that are to be  disposed  of  by  sale  be
  measured at the lower of carrying amount or fair value less cost  to
  sell.   The  statement  also resolves certain implementation  issues
  regarding  SFAS No. 121.  This statement is not expected to  have  a
  material  impact on the Company's statements of financial  condition
  or results of operations.

                        SOUTH BANKING COMPANY
                            ALMA, GEORGIA
               MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS


Liquidity and Capital Resources

      Liquidity  management involves the matching  of  the  cash  flow
requirements  of customers, who may be either depositors  desiring  to
withdraw  funds  or borrowers needing assurance that sufficient  funds
will  be available to meet their credit needs and the ability of South
Banking  Company and its subsidiaries (the "Company")  to  meet  those
needs.  The Company strives to maintain an adequate liquidity position
by managing the balances and maturities of interest-earning assets and
interest-bearing liabilities so that the balance it has in  short-term
investments  (Federal  funds sold) at any given time  will  adequately
cover   any   reasonably  anticipated  immediate   need   for   funds.
Additionally,   the   subsidiary   banks   (the   "Banks")    maintain
relationships with correspondent banks, which could provide  funds  to
them on short notice, if needed.

      The liquidity and capital resources of the Company are monitored
on  a periodic basis by state and Federal regulatory authorities.   As
determined   under   guidelines  established   by   these   regulatory
authorities,  the Banks' liquidity ratios at September 30,  2002  were
considered satisfactory.  At that date, the Banks' Federal funds  sold
were  adequate to cover any reasonably anticipated immediate need  for
funds.   The Company is aware of no events or trends likely to  result
in  a  material  change  in  liquidity. At  September  30,  2002,  the
Company's  and  the Banks' capital asset ratios were  considered  well
capitalized based on guidelines established by regulatory authorities.
During  the  three  months  ended September 30,  2002,  total  capital
increased $499,906 to $21,163,059.  This increase in capital  resulted
from net earnings of $446,023 and an increase of $53,883 in unrealized
gains on securities available for sale, net of taxes.

      At  September  30, 2002, South Banking Company  had  no  binding
commitments for capital expenditures.

Results of Operations

      The  following discussion and analysis presents the  significant
changes in financial condition and the results of operations of  South
Banking  Company  and  Subsidiaries for the periods  indicated.   This
discussion  and  analysis  should be  read  in  conjunction  with  the
Company's 2001 Annual Report to Shareholders and Form 10-K.

                         SOUTH BANKING COMPANY
                             ALMA, GEORGIA
                MANAGEMENT'S DISCUSSION AND ANALYSIS OF
             FINANCIAL CONDITION AND RESULTS OF OPERATIONS


Results of Operations (con't)

      Since  the primary business activities of South Banking  Company
are conducted through its Banks, this discussion focuses primarily  on
the financial condition and operations of the Banks.  Included in this
discussion  are  forward  looking  statements  based  on  management's
current  expectations. Actual results, however, may  differ.   Amounts
and  percentages  used  in this discussion  have  been  rounded.   The
acquisition of the three branches by subsidiary, Pineland State  Bank,
in  July  of 2000 has an impact on these comparisons and all  comments
below should be read taking the acquisition in effect.

Earnings Summary

     Net income for the third quarter of 2002 was $446,023, up $62,802
from  $383,221  in the third quarter of 2001.  On a per  share  basis,
earnings  registered  a similar increase from  $.96  to  $1.25.  These
levels  of  income represent annualized returns on average  assets  of
..78%  and .69%. respectively.  Return on average equity increased from
8.03%   to  8.53%.   Details  concerning  the  Company's  results   of
operations are discussed in the following sections of this report.

      Net  interest  income  for the third  quarter  of  2002  totaled
$2,462,477, up $149,319 from $2,313,158 in the third quarter of 2001.

     Interest income is being impacted by the mix of assets, the level
of earning assets, and the interest rate environment.  Average earning
assets for the quarter of $209.8 million are 6.5 million in excess  of
the  third  quarter  2001 average.  These funds  are  primarily  being
invested in the loan portfolio.  The prime interest rate has been  cut
nine times since January 1, 2001 resulting in a reduction of 4% during
this  period.   While  loan volume increases  has  created  additional
interest  income;  the  drop  in interest  rates  have  been  of  such
magnitude  that  loan  interest income  has  decreased  $831,060  from
$4,560,231  in the third quarter of 2001 to $3,729,171  in  the  third
quarter of 2002.  This decrease reflects the volatile repricing of the
Banks'  substantial portfolio of one year adjustable  and  fixed  rate
loans.

      Interest  expense, the other component of net  interest  income,
decreased  $980,379 when compared to the third quarter  of  last  year
including  the  fact  that  the average balance  of  interest  bearing
liabilities  was  down  $2.8 million.  The overall  cost  of  interest
bearing liabilities for the quarter of 2.92% is 215 basis points lower
than  in  the  third quarter of 2001, reflecting several rate  changes
implemented  in 2001 that decreased rates.  Many of the  higher  rates
have matured and overall rates have fallen.

                         SOUTH BANKING COMPANY
                             ALMA, GEORGIA
                MANAGEMENT'S DISCUSSION AND ANALYSIS OF
             FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Earnings Summary (con't)

      This  combination of higher average balances and  savings  rates
dropping  faster  than loan rates produced a net  interest  margin  of
4.18%  for  the  quarter, up from 3.81% in the third quarter  of  last
year.

      The  provision  for loan losses is a charge to earnings  in  the
current period to replenish the allowance for loan losses and maintain
it  at the level management determines is adequate.  The provision for
loan  losses  charged  to earnings amounted to $320,000  and  $242,500
during   the  three  months  ended  September  30,  2002   and   2001,
respectively.

Noninterest Income

      Following  is a comparison of noninterest income for  the  three
months ended September 30, 2002 and 2001.

                                      Three Months   Three Months
                                      Ended          Ended
                                      September 30,  September 30,
                                      2002           2001

Service charges on deposits           $     456,014  $     472,432
Other service charges, commissions
 & fees                                      22,518         17,421
Other income                                207,616        270,981
Financial service income                     32,063              -

Total Noninterest Income              $     718,211  $     760,834


     Total noninterest income for the three months ended September 30,
2002  was  $42,623  lower than during the same period  in  2001.   The
primary  decrease is related to gain on sale of loan to SBA  in  prior
year.

      During  the  third  quarter of 1998,  the  Bank  began  offering
brokerage  services,  including  stocks,  bonds,  mutual  funds,   and
annuities, to its customers.  The effect on the deposit base has  been
limited  as  less than one quarter of the total sales have  come  from
Bank  deposits.   In the long-term, management believes  this  service
will actually increase deposits.

                         SOUTH BANKING COMPANY
                             ALMA, GEORGIA
                MANAGEMENT'S DISCUSSION AND ANALYSIS OF
             FINANCIAL CONDITION AND RESULTS OF OPERATIONS


Noninterest Expense

      Noninterest  expense includes all items of  expense  other  than
interest  expense,  the provision for loan losses, and  income  taxes.
Total noninterest expense for the third quarter of 2002 was $2,187,498
which is $105,181 or 4.58% less than during the third quarter of 2001.

      The  majority of this decrease was due to payroll  savings  from
staff  reduction and the closing of a branch of Pineland  State  Bank.
Decreases  were  also  experienced in  data  processing  expenses  and
furniture expenses.

      Other  non-personnel expense had little change from prior  year.
Management expects this trend to remain constant during the  remainder
of the year.

Income Taxes

      The Company's provision for income taxes, which totaled $227,167
in  the  third  quarter of 2002 and $155,596 in the third  quarter  of
2001, includes both federal and state income taxes.  The effective tax
rates during the two periods were 33.7% in 2002 and 28.9% in 2001.

Financial Condition

      Average  total  assets during the third  quarter  of  2002  were
$229,796,239, up from $224,190,273 from the third quarter of 2001.   A
detailed discussion of the Bank's financial condition and its  various
balance sheet components follows:

Loan Portfolio

      The loan portfolio, which represents South's largest asset,  has
increased  during  the  third quarter by $3,783,387  to  $172,784,818.
Competitive  pressures  from  auto  manufacturers  and  a  variety  of
mortgage  providers continue to make loan growth at acceptable  yields
and  risk  levels  difficult for those types Loans.   Management  also
believes  that  with the decline in the local farming  economy,  there
exists little opportunity to expand and develop the agricultural  loan
portfolio.   Commercial and real estate lending  remains  the  largest
part of the portfolio.

      The  Bank  is  also a party to financial instruments  with  off-
balance  sheet  risk  in the normal course of  business  to  meet  the
financing  needs  of  its  customers.    These  financial  instruments
include commitments to


                         SOUTH BANKING COMPANY
                             ALMA, GEORGIA
                MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                          FINANCIAL CONDITION


Loan Portfolio (con't)

extend  credit and letters of credit.  Those instruments  involve,  to
varying  degrees, elements of credit and interest rate risk in  excess
of  the  amount  recognized in the consolidated  balance  sheets.   At
September  30,  2002, commitments to extend credit,  including  unused
lines  of credit, totaled $19,242,000 while letters of credit  totaled
$604,000.

     Company policy requires those loans which are past due 90 days or
more  be placed on nonaccrual status unless they are both well secured
and  in  the  process of collection.  The following table  provides  a
summary of past due loans and nonperforming assets.

          Summary of Past Due Loans and Nonperforming Assets
                            (in thousands)

                                        -------September 30,------
                                               2002           2001
                                               (Unaudited)
     Loans past due 90 or more days
      still accruing interest         $         673  $         199

     Nonperforming assets:
      Nonaccruing loans               $         964  $       1,579
      Other real estate owned                   727          1,048

                                      $       1,891  $       2,627

       Management makes this determination by its analysis of  overall
loan  quality,  changes  in the mix and size of  the  loan  portfolio,
previous  loss  experience, general economic  conditions,  information
about  specific borrowers, and other factors.  At September 30,  2002,
the  allowance for loan losses was $2,961,580 or 1.71% of gross loans.
Given  the  inherent  risk contained in the portfolio,  including  the
nonaccrual  loans  described above as well as  commitments  to  extend
credit, this level is considered adequate.  Management is not aware of
any  trends, uncertainties, or other information relating to the  loan
portfolio,  which  it expects will materially impact future  operating
results, liquidity, or capital resources.

      The provision for loan losses is a charge to earnings, which  is
made to maintain the allowance for loan losses at a significant level.
The  provision totaled $320,000 during the third quarter of  2002  and
$242,500 during the third quarter of 2001.




                         SOUTH BANKING COMPANY
                             ALMA, GEORGIA
                MANAGEMENT'S DISCUSSION AND ANALYSIS OF
             FINANCIAL CONDITION AND RESULTS OF OPERATIONS


Securities Portfolio and Federal Funds Sold

      The  Banks' securities portfolio consists of available for  sale
and held to maturity securities while no securities are maintained  in
a  trading  account.   At September 30, 2002,  the  held  to  maturity
portfolio totaled $47,693.

     Management attempts to emphasize the available for sale portfolio
due  to  the  flexibility  it  allows in managing  the  balance  sheet
structure  and  addressing asset/liability issues.  At  September  30,
2002,  this  portfolio  had an estimated fair  value  of  $16,683,964,
$278,062  more  than the amortized cost.  Such deficit  represents  an
unrealized gain.

      This portfolio is invested primarily in U.S. Treasury and agency
obligations  and  tax  exempt municipals.   The  treasury  and  agency
portion of the portfolio, including agency backed mortgage securities,
total  $15,531,445 at quarter-end or 93.1% of the available  for  sale
portfolio. Tax exempt municipals totaling $899,859 comprised 5.4%. The
remainder  of  the  portfolio,  which  totals  $252,660,  consists  of
primarily bank company stock.

      The  Bank  has typically favored investments with maturities  of
five  years  or  less  which  have known  cash  flow  patterns.   Such
instruments  typically  provide  greater  safety,  less  market  value
fluctuation,  and  more simplified asset/liability  issues.   However,
some  callable  securities  and  mortgage  backed  securities  may  be
purchased from time to time for their increased yield.

      The  Bank  generally tries to minimize its  involvement  in  the
overnight  federal  funds  sold  market,  instead,  relying   on   the
continually  maturing  securities portfolio to provide  the  liquidity
needed  to  fund loans or meet deposit withdraw demands.  Nonetheless,
at  any  given  time, the execution of specific investing  or  funding
strategies  or  normal fluctuations in deposit and loan  balances  may
require  the  bank  to  sell or buy funds on an  overnight  basis.  In
addition, any daily excess funds are maintained in Federal Funds until
demands on accounts are determined.

Deposits and Other Funding Sources

     Total deposits at September 30, 2002 of $197,196,231 were up from
their year end total of $196,000,603, and down from the second quarter
deposits.   The  third quarter has traditionally been  a  slow  growth
period.  Third quarter deposits have decreased $5,350,136.

                         SOUTH BANKING COMPANY
                             ALMA, GEORGIA
                MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONNS


Deposits and Other Funding Sources (con't)

      Noninterest bearing deposits decreased $4,331,638 to $29,344,664
during  the  quarter.  Interest bearing deposits decreased $1,018,498,
or .6% to $167,851,567 during the quarter.  Increases were experienced
primarily  in  new  accounts and time certificates  with  decrease  in
savings accounts.

     In addition to deposits, the Bank may generate funding by the use
of borrowing.

Impact of Inflation

      The  consolidated financial statements and related data included
in  this  report  were prepared in accordance with generally  accepted
accounting principals, which require the Company's financial  position
and  results  of  operations to be measured  in  terms  of  historical
dollars,  except  for  the  available for sale  securities  portfolio.
Consequently, the relative value of money generally is not considered.
Nearly  all  of the Company's assets and liabilities are  monetary  in
nature  and, as a result, interest rates and competition in the market
area  tend  to  have  a  more  significant  impact  on  the  Company's
performance than the effect of inflation.

Controls and Procedures

     An evaluation of the Company's disclosure controls and procedures
(as  defined  in  Rules 13a-14(c) and 15d-14(c) under  the  Securities
Exchange  Act)  was  carried out under the supervision  and  with  the
participation  of  the  Company's  management,  including  the   chief
executive  and  chief financial officer, within the 90 days  preceding
the  filing  of  this Quarterly Report on Form 10-Q.   Based  on  that
evaluation,  the  chief  executive and  chief  financial  officer  has
concluded  that the Company's disclosure controls and procedures  were
effective as of the date of that evaluation.

      There  were  no  significant changes in the  Company's  internal
controls  or  in other factors that could significantly  affect  these
controls subsequent to the date of their evaluation.

                        SOUTH BANKING COMPANY
                            ALMA, GEORGIA
                     PART II.  OTHER INFORMATION



Item 1.  Legal Proceedings - None

Item 6.  Exhibits and Reports on Form 8-K

         (A)  Exhibits

               99.1  Certification  of the Chief Executive  and  Chief
Financial Officer Pursuant to 18 U.S.C.  1350

        (B)  Reports on Form 8-K

               The  registrant has not filed any reports on  form  8-K
during the nine-month period ended September 30, 2002.


                              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.


                                   SOUTH BANKING COMPANY
                                    (Registrant)



Date: November 14, 2002            By: /s/ Paul T. Bennett
                                      Paul T. Bennett
                                       President


Date: November 14, 2002              By: /s/ Olivia Bennett
                                       Olivia Bennett
                                       Vice President



CERTIFICATION


I, Paul T. Bennett, certify that:

         1.   I have reviewed this quarterly report on Form 10-Q of
	     South Banking Company, Inc.;

         2.   Based on my knowledge, this quarterly report does not
	     contain any untrue statement of a material fact or omit
	     to state a material fact necessary to make the statements
           made, in light of the circumstances under which such
           statements were made, not misleading with respect to
           the period covered by this quarterly report;

         3.   Based on my knowledge, the financial statements, and
           other financial information included in this quarterly
           report, fairly present in all material respects the
           financial condition, results of operations and cash flows
           of the registrant as of, and for, the periods presented
           in this quarterly report;

         4.   The registrant's other certifying officers and I are
           responsible for establishing and maintaining disclosure
           controls and procedures (as defined in Exchange Act Rules
           13a-14 and 15d-14) for the registrant and have:

              a)   designed such disclosure controls and procedures
                to ensure that material information relating to the
                registrant, including its consolidated subsidiaries,
                is made known to us by others within those entities,
                particularly during the period in which this
		    quarterly report is being prepared;

              b)   evaluated the effectiveness of the registrant's
                disclosure controls and procedures as of a date within
                90 days prior to the filing date of this quarterly
                report(the "Evaluation Date"); and

              c)   presented in this quarterly report our conclusions
                about the effectiveness of the disclosure controls
                and procedures based on our evaluation as of the
                Evaluation Date;

         5.   The registrant's other certifying officers and I have
           disclosed, based on our most recent evaluation, to the
           registrant's auditors and the audit committee of the
           registrant's board of directors (or persons performing
           the equivalent function):

              a)   all significant deficiencies in the design or
                operation of internal controls which could adversely
                affect the registrant's ability to record, process,
                summarize and report financial data and have
                identified for the registrant's auditors any material
                weaknesses in internal controls; and

              b)   any fraud, whether or not material, that involves
                management or other employees who have a significant
                role in the registrant's internal controls.

         6.   The registrant's other certifying officers and I have
           indicated in this quarterly report whether or not there
           were significant changes in internal controls or in other
           factors that could significantly affect internal controls
           subsequent to the date of our most recent evaluation,
           including any corrective actions with regard to
           significant deficiencies and material weaknesses.



Dated this 14th day of November 2002.



                                     /s/ Paul T. Bennett
                                     Paul T. Bennett
                                     Chief Executive Officer
                                     Chief Financial Officer


           CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350


         I, Paul T. Bennett, Chief Executive and Chief Financial
Officer of South Banking Company, Inc. (the "Company"), certify,
pursuant to 18 U.S.C.  1350 as adopted by  906 of the Sarbanes-Oxley
Act of 2002, that:

(1)  the Quarterly Report on Form 10-Q of the Company for the
     quarterly period ended September 30, 2002 (the "Report") fully
     complies with the requirements of Section 13(a) or 15(d) of the
     Securities Exchange Act of 1934; and

(2)  the information contained in the Report fairly presents, in all
     material respects, the financial condition and results of
     operations of the Company.

Dated: November 14, 2002

                                     /s/ Paul T. Bennett
                                     Paul T. Bennett
                                     Chief Executive Officer
                                     Chief Financial Officer