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  June 30, 2000     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 June 30, 2000.


      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 . . . . . . . . . . . 4  -
10

          Notes to Consolidated Financial Statements . . . . . . 11  -
12

         Management's Discussion and Analysis of Financial
           Condition and Results of Operations . . . . . . . . . 13  -
19

Part  II. Other Information  . . . . . . . . . . . . . . . . . . 20  -
21












































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

                                          June 30,        December 31,
                                           2000           1999

                                 ASSETS

Cash and due from banks                    $  5,007,260   $ 11,695,998

Deposits in other banks -
 interest bearing                          $    824,000   $    869,000

Investment securities:
 Available for sale                        $ 18,548,521   $ 18,306,239

 Held to maturity                          $    347,275   $    747,339

Georgia Bankers stock                      $    547,283   $    547,283

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

Federal funds sold                         $ 11,526,000   $  3,180,000

Loans                                      $145,037,356   $132,282,615
Less: Unearned discount                     (   225,397) (     216,397)
Reserve for loan losses                     ( 2,341,661) (   2,168,877)

                                           $142,470,298   $129,897,341

Bank premises and equipment                $  4,773,595   $  4,097,405

Goodwill                                   $    182,492   $    208,562

Other assets                               $  4,981,697   $  3,832,154

Total Assets                               $189,634,521   $173,807,421

The  accompanying  notes  are  an integral  part  of  these  financial
statements.

                                   4

                         SOUTH BANKING COMPANY
                           ALMA,     GEORGIA
                  CONSOLIDATED BALANCE SHEETS (con't)
                              (UNAUDITED)

                                          June 30,         December 31,
                                          2000            1999

                  LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities
Deposits:  Demand - non-interest
                     bearing               $ 24,343,320   $ 21,462,802
           Demand - interest bearing         23,205,286     23,089,387
           Savings                           10,533,014     10,520,013
           Time                             108,205,463     97,727,773
                                           $166,287,083   $152,799,975
Borrowing                                     3,256,798      2,669,743
Accrued expenses and other
 liabilities                                  1,786,721      1,294,354
Federal funds purchased                               -      1,140,000
Note payable - Federal Home Loan Bank         1,066,667         93,333

Total Liabilities                          $172,397,269   $157,997,405

Stockholders' Equity
Common stock $1 par value; shares
 authorized - 1,000,000,  shares
 issued and outstanding - June 30,
 2000 and 1999 - 399,500
 and 399,500, respectively                 $    399,500   $    399,500
Surplus                                       3,070,831      3,070,831
Undivided profits                            14,022,541     12,520,614
Accumulated other comprehensive
 income                                     (   255,620)  (    180,929)

Total Stockholders' Equity                 $ 17,237,252   $ 15,810,016

Total Liabilities and
 Stockholders' Equity                      $189,634,521   $173,807,421

The  accompanying  notes  are  an integral  part  of  these  financial
statements.

                                   5

                         SOUTH BANKING COMPANY
                           ALMA,     GEORGIA
                   CONSOLIDATED STATEMENT OF INCOME
                       AND COMPREHENSIVE INCOME
                              (UNAUDITED)

                   Three        Three
                   Months       Months        Six Months    Six Months
                    Ended         Ended          Ended           Ended
June 30,           June 30,      June 30,       June 30,
                    2000          1999          2000        1999
Interest Income:
 Interest & fees
  on loans         $ 3,897,235   $ 3,106,089   $ 7,666,025   $ 6,157,899
 Interest on federal
  funds sold           137,279       130,984       244,316       286,130
 Interest on deposits
  with other banks      14,410        22,625        25,143        39,833
 Interest on invest-
  ment securities:
  U.S. Treasury         25,742        40,376        50,114        82,385
  Mortgage backed
   securities            8,530         9,882        16,879        20,683
  U.S. Government
   agencies            217,863       172,032       435,231       341,370
  State & municipal
   subdivisions         20,852        22,195        41,704        45,072
 Other                  16,005         9,016        37,012        58,843

Total Interest
 Income            $ 4,337,916   $ 3,513,199   $ 8,516,424   $ 7,032,215

Interest Expense:
 Interest on
  deposits         $ 1,843,246   $ 1,455,295   $ 3,544,503   $ 2,930,533
 Interest on other
  borrowings            68,264        61,189       128,098       118,881

 Total Interest
  Expense          $ 1,911,510   $ 1,516,484   $ 3,672,601   $ 3,049,414

Net Interest
 Income            $ 2,426,406   $ 1,996,715   $ 4,843,823   $ 3,982,801

Provision for loan
 losses                109,500        75,000       197,000       150,000
Net interest income

Net interest income
 after provision
 for loan losses   $ 2,316,906   $ 1,921,715   $ 4,646,823   $ 3,832,801

The  accompanying  notes  are  an integral  part  of  these  financial
statements.

                                   6

                        SOUTH BANKING COMPANY
                          ALMA,     GEORGIA
                   CONSOLIDATED STATEMENT OF INCOME
                   AND COMPREHENSIVE INCOME (con't)
                              (UNAUDITED)

                  Three         Three
                  Months        Months        Six Months    Six Months
                   Ended         Ended         Ended         Ended
                  June 30,      June 30,      June 30,      June 30,
                  2000          1999          2000          1999

Other Operating Income:
 Service charge on
  deposit accounts $   362,003   $   334,803   $   716,226   $   670,919
 Commission on
  insurance             18,028        13,805        46,167        29,080
 Other income          218,845        93,308       397,959       205,425
 Gain (loss) on sale
  of securities              4            45             4            50
 Computer income       109,212       100,864       221,557       187,449
Total Other
 Operating Income  $   708,092   $   542,825   $ 1,381,913   $ 1,092,923
Other Operating Expenses:
 Salaries          $   914,542   $   727,662   $ 1,709,955   $ 1,470,087
 Profit sharing &
  personnel expense    140,686       137,221       299,774       270,307
 Occupancy expense     122,636       111,244       220,768       208,595
 Furniture &
  fixtures expense     216,878       175,940       398,432       354,202
 Payroll taxes          50,366        48,417       101,311        99,625
 Data processing       44,184         33,941        88,730       117,091
 Other operating
  expenses             472,603       457,324       939,567       836,960
Total Other Operating
 Expenses          $ 1,961,895   $ 1,691,749   $ 3,758,537   $ 3,356,867
Income before
 income taxes      $ 1,063,103   $   772,791   $ 2,270,199   $ 1,568,857
Applicable income
 taxes                 365,063       236,883       768,272       475,670
Net Income         $   698,040   $   535,908   $ 1,501,927   $ 1,093,187
The   accompanying  notes  are  an  integral  part  of  these  financial
statements.
                                   7

                         SOUTH BANKING COMPANY
                           ALMA,     GEORGIA
                    CONSOLIDATED STATEMENT OF INCOME
                   AND COMPREHENSIVE INCOME (Con't)
                              (UNAUDITED)

                  Three         Three
                         Months         Months       Six Months    Six Months
Ended                      Ended                 Ended                 Ended
June   30,            June  30,       June  30,       June   30,        2000
1999              2000          1999
Other Comprehensive
 Income, Net of Tax:
  Unrealized gains
   (losses) on
   securities      $    37,734   $(  194,305)  $(   74,691) $(  258,019)

Other Comprehensive
 Income (Loss)     $    37,734   $(  194,305)  $(   74,691) $(  258,019)

Comprehensive
 Income            $   735,774   $   341,603   $ 1,427,236  $   835,168
Per share data based
 on weighted average
 outstanding shares

 Weighted average
  outstanding
  shares               399,500      399,500        399,500       399,500
Net Income         $      1.75   $      1.34                $      3.76     $
2.74

The   accompanying  notes  are  an  integral  part  of  these  financial
statements.
                                   8

                         SOUTH BANKING COMPANY
                           ALMA,     GEORGIA
                        STATEMENT OF CASH FLOWS
                              (UNAUDITED)

                                          Six Months     Six Months
                                          Ended          Ended
                                          June 30,       June 30,
                                          2000           1999
Cash Flows From Operating Activities:
 Net income                                $  1,501,927   $  1,093,187
 Add expenses not requiring cash:
  Provision for depreciation and
   amortization                                 340,692        267,688
  Provision for loan losses                     197,000        150,000
 Bond portfolio losses (gains)                        4             50
 Gain on sale of other real estate
  owned                                               -              -
 Increase (decrease) in taxes payable            49,861        179,670
 Increase (decrease) in interest
   payable                                       169,286               (
80,809                                                )
 Increase (decrease) in other
   liabilities                                   273,220               (
46,404                                                )
 (Increase) decrease in interest
   receivable                                (   448,287              )(
138,957                                               )
 (Increase) decrease in prepaid
   expenses                                  (    44,292              )3
5,942
  (Increase) decrease in other assets        (   614,762              )(
23,378                                                )
 Recognition of unearned loan income              9,000              -

Net Cash Used in Operating Activities      $  1,433,649   $  1,436,989

Cash Flows From Investing Activities:
 Proceeds from sale of investment
  securities - available for sale          $          -   $          -
 Proceeds from maturities of
  investment securities - available
  for sale                                       31,385      4,925,051
 Purchase of investment securities -
   available for sale                        (   397,414              )(
5,550,000                                             )
  Net loans to customers                     (12,778,957              )(
8,203,951                                             )
  Purchase of premise and equipment          (   983,898              )(
327,346                                               )
 Proceeds from sale of premises
  and equipment                                       -              -
 Proceeds from other real estate owned                -              -
 Proceeds from maturities of investment
  securities held to maturity                   400,000              -
  Purchase of equity securities                        -               (
250,000                                               )

The   accompanying  notes  are  an  integral  part  of  these  financial
statements.
                                   9

                           SOUTH BANKING COMPANY
                           ALMA,     GEORGIA
                    STATEMENT OF CASH FLOWS (Con't)
                              (UNAUDITED)

                                          Six Months     Six Months
                                          Ended          Ended
                                          June 30,       June 30,
                                           2000          1999

Cash Flows From Investing Activities (con't):
Purchase of investment securities
  held to maturity                        $          -    $          -
Purchase of FHLB stock                                -                (
29,900                                               )

Net Cash Used in Investing Activities      $(13,728,884              )$(
9,436,146                                             )
Cash Flows From Financing Activities:
 Federal funds purchased repaid            $          -   $          -
 Net increase (decrease) in demand
   deposits, NOW and money market              2,996,417               (
6,059,648                                             )
 Net increase (decrease) in savings
  and time deposit                           10,490,691      3,554,624
 Net increase (decrease) in
  borrowings                                   587,055           8,120
 Net increase (decrease) - FHLB loan           973,334     (    26,667)
 Redemptions of company stock                         -              -
 Increase (decrease) in federal
   funds purchased                           ( 1,140,000               )
        -

Net Cash Provided (Used) From
 Financing Activities                      $ 13,907,497               $(
2,523,571                                             )
Net Increase (Decrease) in Cash
  and Cash Equivalents                      $  1,612,262               $
(10,522,728                                           )
Cash and Cash Equivalents at
 Beginning of Year                           15,744,998     25,309,085
Cash and Cash Equivalents at
 End of Period                             $ 17,357,260   $ 14,786,357
The   accompanying  notes  are  an  integral  part  of  these  financial
statements.
                                  10

                        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, 1999.

           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.

                                  11

                         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
establishes   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.

                                  12
                        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 is 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  June  30,  2000  were
considered  satisfactory but on the lower level.  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  June  30, 2000, 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 June 30,  2000,
total capital increased $  735,774 to $  17,237,252.  This increase in
capital  resulted from  net earnings of $  698,040 and  a decrease  of
$  37,734 in unrealized gains on securities available for sale, net of
taxes.

      At  June  30,  2000,  South  Banking  Company  had  one  binding
commitment   for   capital  expenditures.  South   Banking   Company's
subsidiary,  Pineland  State Bank, had entered into  an  agreement  to
acquire  three  bank branches within its market area.   South  Banking
will  contribute an additional $2,700,000 in capital to Pineland State
Bank to facilitate the acquisition. South Banking Company has arranged
long-term financing for the additional investment.

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 1999 Annual Report to Shareholders and Form 10-K.

                                  13

                         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.

Earnings Summary

      Net  income  for  the second quarter of 2000  was  $698,040,  up
$162,132 from $535,900 in the second quarter of 1999.  On a per  share
basis,  earnings  registered a similar increase from $1.34  to  $1.75.
These  levels of income represent annualized returns on average assets
of  1.53%  and  1.30%,  respectively.  Return on average  equity  also
decreased  from  14.65% to 16.90%.  Details concerning  the  Company's
results of operations are discussed in the following sections of  this
report.

      Net  interest  income  for the second quarter  of  2000  totaled
$2,426,406, up $429,691 from $1,996,715 in the second quarter of 1999.

     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 $164.3 million are $14.6 million in  excess
of  the second quarter 1999 average.  These funds are primarily  being
invested in the loan portfolio.  The rate environment and loan volume,
has  caused  loan income to increase $791,146 from $3,106,089  in  the
second  quarter of 1999 to $3,897,235 in the second quarter  of  2000.
This   increase  reflects  the  volatile  repricing  of   the   Bank's
substantial portfolio of one-year adjustable rate loans, however,  the
recent  increase  in  the prime rate has begun  to  positively  impact
interest income.

      Interest  expense, the other component of net  interest  income,
increased  $395,026 when compared to the second quarter of  last  year
including  the  fact  that  the average balance  of  interest  bearing
liabilities  was  up  $13.5 million.  This is  the  result  of  higher
interest rates.  The overall cost of interest bearing liabilities  for
the  quarter  of 5.26% is 53 basis points higher than  in  the  second
quarter of 1999, reflecting several rate increases implemented in late
1999 and early 2000.
                                  14

                         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  higher  rates
produced a net interest margin of 5.30% for the quarter, up from 4.63%
in the second 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  $109,500  and  $75,000
during the three months ended June 30, 2000 and 1999, respectively.

Noninterest Income

      Following  is a comparison of noninterest income for  the  three
months ended June 30, 2000 and 1999.

                                       Three  Months     Three  Months
Ended                                                            Ended
        June 30,                      June 30,
                                       2000            1999

Service charges on deposits            $     362,003  $     334,803
Other service charges, commissions
 & fees                                       18,028          13,805
Other income                                 328,061         194,217

Total Noninterest Income               $     708,092   $     542,825

     Total noninterest income for the three months ended June 30, 2000
was  $165,267 higher than during the same period in 1999.  The primary
increase  is  related  to additional computer processing  income  from
nonaffiliated  banks and brokerage services.

      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.
                                  15

                         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 second quarter of 2000 of $2,184,843
was  $270,146  or  16.00%, greater than during the second  quarter  of
1999.

      The  majority  of  this increase was due to  higher  salary  and
benefit costs, up $186,880 to $914,542.  Salaries have increased as  a
result  of  the  retention  of a full-time broker  and  a  new  branch
location,  in addition to regular compensation adjustments.  Increases
were also experienced in group insurance and pension expense.

      Other  increases were experienced in equipment  costs  and  data
processing,  while other noninterest expense increased by  $15,279  to
$472,603  for  the quarter.  Management expects this trend  to  remain
constant during the remainder of the year.

Income Taxes

     The Company's provision  for income taxes, which totaled $365,063
in  the  second quarter of 2000 and $236,883 in the second quarter  of
1999, includes both federal and state income taxes.  The effective tax
rates during the two periods were 34.3% in 2000 and 30.6% in 1999.

Financial Condition

      Average  total  assets during the second quarter  of  2000  were
$186,305,665, up from $162,016,870 from the second quarter of 1999.  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 second quarter by $3,880,749  to  $145,037,356.
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 of loans.  Management  also
believes  that  with the recent decline in the local farming  economy,
there exists
little  opportunity  to  expand  and  develop  the  agricultural  loan
portfolio,  however;  in  the  year since  June  30,  1999,  the  loan
portfolio  has  increased substantially.  Commercial and  real  estate
lending remains the largest part of the portfolio.

                                  16

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

Loan Portfolio (Con't)

     The Bank is also a part 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 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 June 30, 2000, commitments to extend credit, including unused lines
of  credit,  totaled  $27,362,000  while  letters  of  credit  totaled
$728,000.

     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)

                                             ---------June 30,--------
                                   -
                                            2000            1999
                                                  (Unaudited)
     Loans past due 90 or more days
      still accruing interest               $      564      $      114

     Nonperforming assets:
      Nonaccruing loans                     $      734      $      913
      Other real estate owned                      656             182

                                            $    1,390      $    1,095

      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 June  30,  2000,  the
allowance  for  loan losses was $2,341,661 or 1.61%  of  gross  loans.
Given the inherent risk contained in the portfolio, including the non-
accrual  loan 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.
                                  17

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

Loan Portfolio Con't)

      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 $109,500 during the second quarter of 2000  and
$75,000 during the second quarter of 1999.

Securities Portfolio and Federal Funds Sold

      The  Bank's securities portfolio consists of available for  sale
and held to maturity securities while no securities are maintained  in
a  trading  account.  At June 30, 2000, the held to maturity portfolio
totaled $347,275.

     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 June  30,  2000,
this  portfolio  had an estimated fair value of $18,048,521,  $361,519
less  than  the amortized cost.  Such deficit represents an unrealized
loss.

      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  $16,687,488 at quarter-end or 84.0% of the available  for  sale
portfolio.  Tax exempt municipals totaling $1,708,308 comprised  7.4%.
The  remainder of the portfolio, which totals $1,473,383, consists  of
bank holding company stock, Georgia Bankers Stock, and stock which the
Bank  is  required to hold for membership in the Federal Reserve  Bank
and the Federal Home Loan Bank.

      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.
                                  18

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

Deposits and Other Funding Sources

      Total  deposits at June 30, 2000 of $166,287,083  were  up  from
their  first  quarter  total  of $160,918,995.   Although  the  second
quarter has traditionally not been a large growth period, deposits are
well above the second quarter 1999 totals of $143,484,922.

      Noninterest bearing deposits increased $1,607,492 to $24,343,320
during  the  quarter.  Interest bearing deposits increased $3,760,596,
or   2.7%,  to  $138,183,167  during  the  quarter.   Increases   were
experienced primarily in certificates of deposit.

     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 principles, 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.

                                  19

                         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

         (27) Financial Data Schedule

              The  registrant has not filed any reports  on  Form  8-K
              during the three month period ended June 30, 2000.

                                  20

                              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:  August 12, 2000            By:
                                     Paul T. Bennett
                                     President



Date:  August 12, 2000            By:
                                     Olivia Bennett
                                     Vice President

                                  21