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, 1999 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, 1999.


      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

         Management's Discussion and Analysis of Financial
           Condition and Results of Operations . . . . . . . . . .12 -
19


Part  II. Other Information  . . . . . . . . . . . . . . .  .  .  .  .
20

                         SOUTH BANKING COMPANY
                           ALMA,     GEORGIA
                      CONSOLIDATED BALANCE SHEETS




                                        September 30,    December 31,
                                         1999               1998
                                 ASSETS

Cash and due from banks                  $  9,054,171     $  6,122,085

Deposits in other banks -
 interest bearing                        $  1,364,000     $  1,539,000

Investment securities:
 Available for sale                      $ 18,237,748     $ 16,993,917

 Held to maturity                        $    747,435     $    747,716

Georgia Bankers stock                    $    547,283     $    547,283

Federal Home Loan Bank stock             $    426,100     $    396,200

Federal Funds Sold                       $  4,467,000     $ 17,648,000


Loans                                    $126,658,017     $114,959,844
Less:      Unearned     discount                       (        154,545)
(   154,545                                         )
Reserve  for loan losses                   ( 1,952,706)     (  1,970,620
)

                                         $124,550,766     $112,834,679

Bank premises and equipment              $  3,942,268     $  4,020,735

Goodwill                                 $    223,031     $    262,137

Other assets                             $  4,084,929     $  3,778,990


Total Assets                             $167,644,731     $164,890,742

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

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

                                         September 30,    December 31,
                                        1999             1998

                  LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities
Deposits:  Demand - noninterest
                     bearing             $ 19,350,276     $ 23,299,454
           Demand - interest bearing       24,596,754       24,613,084
           Savings                         11,589,952        9,057,678
           Time                            91,628,838       89,019,729
                                         $147,165,820     $145,989,945
Borrowing                                   3,030,475        3,156,096
Accrued expenses and other
 liabilities                                1,686,912        1,391,347
Federal funds purchased                             -                -
Note payable - FHLB                           106,666          146,667

Total Liabilities                        $151,989,873     $150,684,055

Stockholders' Equity
Common stock $1 par value; shares
 authorized - 1,000,000, shares issued
 and outstanding - September 30, 1999
 and December 31, 1998, 399,500
 and 399,500, respectively               $    399,500     $    399,500
Surplus                                     3,070,831        3,070,831
Undivided profits                          12,424,569       10,651,788
Accumulated other comprehensive
 income                                    (  240,042)          84,568

Total Stockholders' Equity               $ 15,654,858     $ 14,206,687

Total Liabilities and
 Stockholders' Equity                    $167,644,731     $164,890,742

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

                          SOUTH BANKING COMPANY
                           ALMA,     GEORGIA
                   CONSOLIDATED STATEMENTS OF INCOME

                  Three        Three
                  Months       Months        Nine Months  Nine Months
                  Ended        Ended        Ended        Ended
                  September    September    September    September
                  30, 1999     30, 1998     30, 1999     30, 1998
Interest Income:
 Interest & fees
  on loans         $ 3,353,084  $ 3,218,249  $ 9,510,983  $ 9,178,841
 Interest on federal
  funds sold            97,544      143,669      383,674      423,354
 Interest on deposits
  with other banks      19,570       24,596       59,403       55,951
 Interest on
  investment
  securities:
  U.S. Treasury         35,725       54,630      118,110      160,327
  U.S. Government
   agencies            198,693      161,934      540,063      495,642
  Mortgage backed
   bonds                 8,926       14,009       29,609       46,217
  State & municipal
   subdivisions         20,853       22,877       65,925       68,822
 Other                  18,593        7,974       77,436       49,356

Total Interest
 Income            $ 3,752,988  $ 3,647,938  $10,785,203  $10,478,510
Interest Expense:
 Interest on
  deposits         $ 1,498,150  $ 1,588,301  $ 4,428,683  $ 4,547,478
 Interest on other
  borrowings            61,838       69,391      180,719      202,505
Total Interest
 Expense           $ 1,559,988  $ 1,657,692  $ 4,609,402  $ 4,749,983
Net interest income$ 2,193,000  $ 1,990,246  $ 6,175,801  $ 5,728,527
Provision for loan
 losses                 84,000       54,000      234,000      182,000
Net interest income
 after provision
 for loan losses   $ 2,109,000  $ 1,936,246  $ 5,941,801  $ 5,546,527

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

                         SOUTH BANKING COMPANY
                           ALMA,     GEORGIA
               CONSOLIDATED STATEMENTS OF INCOME (con't)

                   Three        Three
                   Months       Months        Nine Months  Nine Months
                   Ended        Ended        Ended        Ended
                   September    September    September    September
                   30, 1999     30, 1998     30, 1999     30, 1998
Other Operating Income:
 Service charge on
  deposit accounts  $   401,246  $   280,038  $ 1,072,165   $  841,970
 Commission on
  insurance              16,127       17,813       45,207       67,710
 Other income            84,534      124,358      289,959      295,348
 Computer processing
  fees                   98,712       32,006      286,161      114,537
 Gain (loss) on sale
  of securities              80          115          130          138

Total Other
 Operating Income   $   600,699  $   454,330  $ 1,693,622  $ 1,319,703
Other Operating
 Expenses:
 Salaries           $   745,096  $   672,802  $ 2,215,183  $ 1,898,127
 Profit sharing &
  personnel expense     147,002      122,513      417,309      345,470
 Occupancy expense       95,924       94,662      304,519      333,379
 Furniture &
  fixtures expense      194,484      233,622      548,686      539,159
 Payroll taxes           46,601       14,165      146,226      123,851
 Data processing         45,471       52,930      162,562       96,322
 Other operating
  Expenses              434,642      402,975    1,271,602    1,244,344
Total Other
 Operating Expenses $ 1,709,220  $ 1,593,669  $ 5,066,087  $ 4,580,652
Income before income
 taxes              $ 1,000,479  $   796,907  $ 2,569,336  $ 2,285,578
Applicable income
 taxes                  320,885      255,356      796,555      700,250


Net Income          $   679,594  $   541,551  $ 1,772,781  $ 1,585,328


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)

                   Three        Three
                   Months       Months        Nine Months  Nine Months
                   Ended        Ended        Ended        Ended
                   September    September    September    September
                   30, 1999     30, 1998     30, 1999     30, 1998
Other comprehensive
 income, net of tax:
 Unrealized gains
 (losses) on
   Securities        $(   66,591            )  $    71,516  $(  324,610)
$   115,813

Other Comprehensive
  Income (Loss)      $(   66,591            )  $    71,516  $(  324,610)
$   115,813

Comprehensive
  Income             $   613,003               $   613,067             $
 1,448,171          $ 1,701,141


Per share data based
 on weighted average
 outstanding shares

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

Net Income          $      1.70  $      1.36  $      4.44  $      3.97
The   accompanying  notes  are  an  integral  part  of  these  financial
statements.

                         SOUTH BANKING COMPANY
                           ALMA,     GEORGIA
                       STATEMENTS OF CASH FLOWS

                                           Nine Months   Nine Months
                                           Ended         Ended
                                           September     September
                                             30, 1999    30, 1998

Cash Flows from Operating Activities:

 Net income                                 $  1,772,781  $  1,585,328
 Add expenses not requiring cash:
  Provision for depreciation and
   amortization                                  397,554       493,804
  Provision for loan losses                      234,000       182,000
 Bond portfolio gains (losses)                       130           138
 Gain on sale of other real estate owned               -             -
 Increase (decrease) in taxes payable            226,989        12,930
 Increase (decrease) in interest
   payable                                    (    92,852              )
145,274
 Increase (decrease) in other liabilities        161,428       105,793
 (Increase) decrease in interest
   receivable                                 (   403,764             )(
392,333                                                )
 (Increase) decrease in prepaid expenses          28,068        59,044
  (Increase) decrease in other assets             103,178              (
378,597
 Recognition of unearned loan income                   -               (
 18,363                                                )

Net Cash Used in Operating Activities       $  2,427,512  $  1,795,018

Cash Flows from Investing Activities:

 Proceeds from sale of investment
  securities - available for sale           $          -  $          -
 Proceeds from maturities of
  investment securities - available
  for sale                                     5,338,681     4,919,373
 Purchase of investment securities -
   available for sale                         ( 6,600,000             )(
5,501,423                                              )
  Net loans to customers                      (11,950,087             )(
11,632,770          )  Purchase of premise and equipment   (    370,373)
(   415,156                                            )
 Proceeds from sale of premises and
  equipment                                            -             -
 Proceeds from maturity of investment
     securities    -   held   to    maturity                           -
1,060,098
 Purchase of investment securities -
   held to maturity                                     -              (
502,137                                                )
 Purchase of equity securities               (  250,000)             -

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

                                           Nine Months   Nine Months
                                           Ended         Ended
                                           September     September
                                             30, 1999    30, 1998

Cash Flows from Investing Activities: (con't)

Purchase of CB Financial Corp stock         $          -              $(
300,000                                         )
Purchase  of FHLB stock                       (    29,900              )
(    51,000                                            )

Net Cash Used in Investing Activities       $(13,861,679              )$
(12,423,015                                            )

Cash Flows from Financing Activities:

 Net increase (decrease) in demand
  deposits, NOW and money market            $( 3,965,508             )$(
2,805,312                                              )
 Net increase (decrease) in savings
  and time deposits                            5,141,383     9,168,052
  Net increase (decrease) in borrowings       (   125,621              )
202,500
 Dividends paid                                        -             -
 Redemptions of company stock                          -             -
 Increase (decrease) in federal
   funds sold                                           -              (
150,000                                                )
  Increase note payable - FHLB                (    40,001              )
 160,000

Net Cash Provided (Used) From
 Financing Activities                       $  1,010,253  $  6,575,240

Net Increase (Decrease) in Cash
 and Cash Equivalents                       $(10,423,914             )$(
4,052,757                                              )

Cash and Cash Equivalents at
 Beginning of Period                          25,309,085    19,448,444

Cash and Cash Equivalents at
 End of Period                              $ 14,885,171  $ 15,395,687

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 accompanying consolidated financial statements in this report
  have  not  been  audited.   The  statements  have  been  prepared   in
  accordance  with generally accepted accounting principles and  general
  practice within the banking industry.

        On  January 11, 1996, the acquisition of Pineland State Bank  in
  Metter, Georgia was completed.  The purchase method of accounting  was
  used  to  record the transaction.  All transactions since January  11,
  1996   of  Pineland  State  Bank  have  been  consolidated  in   these
  statements.

        In  the  opinion  of management, all adjustments  for  the  fair
  presentation  of the financial position and results of operations  for
  the interim periods have been made.



                        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,  1999  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 September 30, 1999,  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,  1999,  total  capital
increased  $613,003 to $15,654,858.  This increase in  capital  resulted
from  net  earnings of $679,594 and an increase of $66,591 in unrealized
losses on securities available for sale, net of taxes.

      At  September  30,  1999, South Banking  Company  had  no  binding
commitments   for  capital  expenditures.  No  additional   mergers   or
acquisitions requiring cash are being negotiated at present.

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
1998 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.

Earnings Summary

      Net income for the third quarter of 1999 was $679,594, up $138,043
from  $541,551  in  the third quarter of 1998.  On a  per  share  basis,
earnings registered a similar increase from 1.36 to 1.70.  These  levels
of  income  represent annualized returns on average assets of 1.63%  and
1.40%.  respectively.   Return on average  equity  also  increased  from
16.23%   to  18.21%.   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  1999  totaled
$2,193,000 up $202,754 from $1,990,246 in the third quarter of 1998.

      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 $151.3 million are $5.7 million in excess  of
the  third  quarter  1998  average.  These  funds  are  primarily  being
invested  in  the loan portfolio.  The lower rate environment,  however,
has  caused loan income to increase only $105,050 from $3,647,938 in the
third quarter of 1998 to $3,752,988 in the third quarter of 1999.   This
increase  reflects  the  downward 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,
decreased  $97,704  when  compared to the third  quarter  of  last  year
despite   the  fact  that  the  average  balance  of  interest   bearing
liabilities  was up $10 million.  This is the result of  lower  interest
rates.  The overall cost of interest bearing liabilities for the quarter
of  5.07%  is 44 basis points lower than in the third quarter  of  1999,
reflecting  several rate reductions implemented in late 1998  and  early
1999.

      This  combination  of  higher average  balances  and  lower  rates
produced  a net interest margin of 4.83% for the quarter, up from  4.51%
in the third quarter of last year.

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

Earnings Summary (con't)

      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 $84,000 and $54,000  during
the three months ended September 30, 1999 and 1998, respectively.

Noninterest Income

      Following  is  a comparison of noninterest income  for  the  three
months ended September 30, 1999 and 1998.

                                          Three Months    Three Months
                                          Ended          Ended
                                          September 30,   September 30,
                                          1999           1998

Service charges on deposits                $     401,246  $    280,038
Other service charges, commissions
 & fees                                           16,127        17,813
Other income                                     183,246       156,364

Total Noninterest Income                   $     600,619  $    454,215

      Total noninterest income for the three months ended September  30,
1999  was  $146,404  higher than during the same period  in  1998.   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.

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 1999  of  $1,709,220
was $115,551 or 7.25% greater than during the third quarter of 1998.

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

Noninterest Expense (con't)

      The  majority  of this increase was due to higher salary,  payroll
taxes,  and  benefit  costs,  up $129,219 to  $938,699.   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  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 $320,885 in
the  third  quarter of 1999 and $255,356 in the third  quarter  of  1998
includes  both federal and state income taxes.  The effective tax  rates
during the two periods were 32.0% in 1999 and 32.0% in 1998.

Financial Condition

      Average  total  assets  during the  third  quarter  of  1999  were
$165,449,764, up from $157,288,048 from the third quarter  of  1998.   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  $3,631,631  to  $126,658,017.
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.  In the year since September 30, 1998, the loan portfolio has
increased substantially.  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
extend  credit  and  letters of credit.  Those instruments  involve,  to
varying degrees, elements of credit and interest rate risk in excess of

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

Loan Portfolio (con't)

the  amount recognized in the consolidated balance sheets.  At September
30,  1999,  commitments  to  extend credit, including  unused  lines  of
credit, totaled $20,820,000 while letters of credit totaled $596,000.

      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,------
1999                                       1998
                                                     (Unaudited)
     Loans past due 90 or more days
      still accruing interest                $       277   $       157

     Nonperforming assets:
      Nonaccruing loans                      $       790  $       846
      Other real estate owned                       180            679

                                             $       970  $     1,525

       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,  1999,  the
allowance for loan losses was $1,952,706 or 1.54% of gross loans.  Given
the  inherent risk contained in the portfolio, including the  nonaccrual
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.

      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 $84,000 during the third  quarter  of  1999  and
$54,000 during the third quarter of 1998.

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

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 September 30, 1999, the held to maturity portfolio
totaled $747,283.

      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,  1999,  this
portfolio had an estimated fair value of $18,237,748, $240,042 less than
the amortized cost.  Such deficit represents an unrealized loss.

      This  portfolio,  which represents 91.3% of the  total  securities
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
$16,114,433 at quarter end or 88.4% of the available for sale portfolio.
Tax  exempt municipals totaling $1,573,315 comprised 8.6%. The remainder
of  the  portfolio,  which  totals $550,000, consists  of  bank  holding
company stock and Georgia Bankers 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, 1999 of $147,165,820 were up  from
their  second  quarter  total of $143,484,922.  The  third  quarter  has
traditionally  been a good growth period.  Third quarter  deposits  have
increased $3,680,898.

                          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 $697,760  to  $19,350,276
during  the  quarter.   In contrast to this, interest  bearing  deposits
increased  $4,378,658,  or  3.5%, to $127,815,544  during  the  quarter.
Increases were experienced in all types of interest bearing deposits.

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

Year 2000 Compliance

      Historically,  certain computerized systems have  had  two  digits
rather  than  four  digits to define the applicable  year,  which  could
result  in recognizing a date using 00 as the year 1900 rather than  the
year  2000.   This  could result in failures or miscalculations  and  is
generally referred to as the Year 2000 issue.

      Because the Bank, as well as some of its suppliers, customers, and
service  providers,  is heavily dependent on computers  to  conduct  its
business operations, it recognizes and seeks to responsibly address  the
Year  2000  issue.  Failure to address Year 2000 issues could result  in
business   disruption  that  could  materially  affect   the   Company's
operations, liquidity, or capital resources.  A Year 2000 Task Team  has
been  assembled to study, test, and remedy Year 2000 issues.  This  team
includes members of senior management and reports regularly to the Board
of  Directors.   The  team  has  inventoried  all  computer  related  or
dependent  hardware and software, identified those which  are  critical,
and  assessed  the Year 2000 compliance of each component.   Testing  of
critical  items, which involve a third party software vendor, are  being
jointly conducted with that processor.  During 1998 and 1999, such tests
of  the processors' major functions were successful.  Backup systems for
noncritical functions have also been identified and are also subject  to
testing.  The Bank also has contingency plans, which will be implemented
in  the  event  of  a  Year  2000 failure.  In addition,  the  Bank  has
contacted those customers and vendors, who, if unable to cope  with  the
Year 2000 issue, may negatively impact the Bank, to attempt to determine
their degree of readiness.

      Through  September  30,  1999, the  Bank  expenditures  have  been
nonmaterial  in preparation for the Year 2000.  It is not expected  that
additional capital expenditures of a significant amount will be needed.
                          SOUTH BANKING COMPANY
                              ALMA, GEORGIA
                MANAGEMENT'S DISCUSSION AND AANALYSIS OF
              FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Year 2000 Compliance

      While  the Bank believes the tests and procedures in place  should
minimize  the  Year 2000 risks and enable it to meet the  needs  of  its
customers  in  the  Year  2000, the Bank cannot quantify  the  potential
impact  of  any  unforeseen Year 2000 failures that might  occur  either
internally or from external third parties.

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.

                        SOUTH BANKING COMPANY
                          ALMA,     GEORGIA
                     PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings - No change.

Item 6.  Exhibits and Reports on Form 8-K

         (A)  Exhibits - None

         (27) Financial Data Schedule

               The  registrant  has not filed any reports  on  form  8-K
         during the nine-month period ended September 30, 1999.
                              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:                             By:
                                     Paul T. Bennett
                                     President

Date:                             By:
                                     Olivia Bennett
                                     Vice President