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   March 31, 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
Number)
 incorporation or organization)


   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 March 31, 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 -
9

          Notes to Consolidated Financial Statements . . . . . . 10 -
11

         Management's Discussion and Analysis of Financial
           Condition and Results of Operations . . . . . . . . . 12 -
18


Part  II.  Other Information  . . . . . . . . . . . . . .  .  .  .  .
19

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

                                         March 31,        December 31,
                                         2000             1999

                                 ASSETS

Cash and due from banks                   $  6,972,775    $ 11,695,998

Deposits in other banks -
 interest bearing                         $    874,000    $    869,000

Investment securities:
 Available for sale                       $ 18,140,737    $ 18,306,239

 Held to maturity                         $    747,246    $    747,339

Georgia Bankers stock                     $    547,283    $    547,283

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

Federal funds sold                        $  7,561,000    $  3,180,000

Loans                                     $141,156,607    $132,282,615
Less: Unearned discount                    (   225,397)    (   216,397)
Reserve for loan losses                    ( 2,302,889)    ( 2,168,877)

                                          $138,628,321    $129,897,341

Bank premises and equipment               $  4,271,581    $  4,097,405

Goodwill                                  $    195,527    $    208,562

Other assets                              $  4,612,239    $  3,832,154

Total Assets                              $182,976,809    $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)

                                         March 31,      December 31,
                                         2000           1999

                  LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities
Deposits:  Demand - non-interest
                     bearing              $ 22,735,828    $ 21,462,802
           Demand - interest bearing        24,485,929      23,089,387
           Savings                          10,336,624      10,520,013
           Time                            103,360,614      97,727,773
                                          $160,918,995    $152,799,975
Borrowing                                    2,847,274       2,669,743
Accrued expenses and other
 liabilities                                 1,939,062       1,294,354
Federal funds purchased                        690,000       1,140,000
Note payable - Federal Home Loan Bank           80,000          93,333

Total Liabilities                         $166,475,331    $157,997,405

Stockholders' Equity
Common stock $1 par value; shares
 authorized - 1,000,000,  shares
 issued and outstanding at
 March 31, 2000 and December 31,
 1999 - 399,500 and 399,500,
 respectively                             $    399,500    $    399,500
Surplus                                      3,070,831       3,070,831
Undivided profits                           13,324,501      12,520,614
Accumulated other comprehensive
 income                                    (   293,354)    (   180,929)

Total Stockholders' Equity                $ 16,501,478    $ 15,810,016

Total Liabilities and
 Stockholders' Equity                     $182,976,809    $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 Months    Three Months
                                         Ended           Ended
                                         March 31,       March 31,
                                         2000            1999
Interest Income
Interest and fees on loans                $  3,768,790    $  3,051,810
Interest on federal funds sold                 107,037         155,146
Interest on deposits with other banks           10,733          17,208
Interest on investment securities:
 U. S. Treasury                                 24,372          42,009
 U. S. government agencies                     217,368         169,338
 Mortgage backed securities                      8,349          10,801
 State and political subdivisions               20,852          22,877
 Dividends                                      21,007          49,827

Total Interest Income                     $  4,178,508    $  3,519,016

Interest Expense
Interest on deposits                      $  1,701,257    $  1,475,238
Interest on other borrowings                    59,834          57,692

Total Interest Expense                    $  1,761,091    $  1,532,930

Net Interest Income                       $  2,417,417    $  1,986,086
Provision for loan losses                       87,500          75,000

Net interest income after provisions
 for loan losses                          $  2,329,917    $  1,911,086

Other Operating Income
Service charge on deposit accounts        $    354,223    $    336,116
Commission on insurance                         28,139          15,275
Other income                                   179,114        112,117
Gain (loss) sale of securities                       -               5
Computer income                                112,345          86,585

Total Other Operating Income              $    673,821    $    550,098

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 Months    Three Months
                                         Ended           Ended
                                         March 31,       March 31,
                                         2000            1999
Other                        Operating                        Expenses
Salaries                                  $    795,413    $    742,425
Profit sharing and other personnel
 expense                                       159,088         133,086
Occupancy expense                               98,132          97,351
Furniture and fixtures expense                 181,554         178,262
Payroll taxes                                   50,945          51,208
Data processing                                 44,546          83,150
Other operating expenses                       466,964         379,636

Total Other Operating Expenses            $  1,796,642    $  1,665,118

Income before income taxes                $  1,207,096    $    796,066
Applicable income taxes                        403,209         238,787

Net income                                $    803,887    $    557,279
Other comprehensive income, net of tax
 Unrealized gains (losses) on
  securities                              $(   112,425)   $(    63,714)

Other comprehensive income (loss)         $(   112,425)   $(    63,714)

Comprehensive income                      $    691,462    $    493,565

Per share data on weighted average
 outstanding shares
Weighted average outstanding shares            399,500         399,500

Net income per share                      $      2.012    $      1.395

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

                                   7

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

                                           Three Months   Three Months
                                          Ended          Ended
                                          March 31,      March 31,
                                          2000           1999
Cash Flows From Operating Activities:
 Net income                                $    803,887   $    557,279
 Add expenses not requiring cash:
  Provision for depreciation and
   amortization                                 167,906        108,689
  Provision for loan losses                      87,500         75,000
 Bond portfolio losses (gains)                        -              -
 Gain on sale of other real estate
  owned                                               -              -
 Increase (decrease) in taxes payable           345,770        238,787
 Increase (decrease) in interest payable        118,689         16,571
 Increase (decrease) in other liabilities       180,249    (    38,770)
 (Increase) decrease in interest
  receivable                                (   123,101)       67,662
 (Increase) decrease in prepaid
  expenses                                  (    40,894)       33,567
 (Increase) decrease in other assets        (   221,127)       22,163
 Recognition of unearned loan income              9,000             -

Net Cash Provided (Used) by Operating
 Activities                                $  1,327,879   $  1,080,948

Cash Flows From Investing Activities:
 Proceeds from maturities of investment
  securities - available for sale          $     10,452   $  3,650,418
 Proceeds from maturities of investment
  security - held to maturity                         -              -
 Purchase of investment securities - AFS              -    ( 3,150,000)
 Purchase of investment securities - HTM              -              -
 Net loans to customers                     ( 8,827,480)   ( 3,757,174)
 Purchase of premise and equipment          (   326,230)   (   222,389)
 Proceeds from sale of equipment                      -              -
 Proceeds from other real estate owned                -              -
 Purchase of FHLB stock                               -    (    29,900)

Net Cash Provided (Used) by Investing
 Activities                                $( 9,143,258)  $( 3,509,045)

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

                                    8

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

                                          Three Months    Three Months
                                          Ended          Ended
                                          March 31,      March 31,
                                          2000           1999
Cash Flows From Financing Activities:
 Net increase (decrease) in demand
  deposits, NOW and money market           $  2,669,568   $( 5,251,253)
 Net increase (decrease) in savings
  and time deposit                            5,449,452        460,781
 Net increase (decrease) in borrowings      (   177,531)   (    18,144)
 Dividends paid                                       -              -
 Redemptions of company stock                         -              -
 Federal funds purchased                    (   450,000)             -
 Net decrease - note payable - FHLB         (    13,333)   (    13,334)
Net Cash Provided (Used) by
 Financing Activities                      $  7,478,156   $( 4,821,950)

Net Increase (Decrease) in Cash
 and Cash Equivalents                      $(   337,223)  $( 7,250,047)

Cash and Cash Equivalents at
 Beginning of Year                           15,744,998     25,309,085

Cash and Cash Equivalents at
 End of Period                             $ 15,407,775   $ 18,059,038

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

                                    9

                        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.

                                   10

                          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.











                                  11
                         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  March  31,  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  March 31, 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 March 31, 2000,
total  capital  increased $619,462 to $16,501,478.  This  increase  in
capital  resulted  from net earnings of $803,887 and  an  increase  of
$112,425 in unrealized losses on securities available for sale, net of
taxes.

      At  March  31,  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 $2,000,000 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.

                                    12

                         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  first quarter of 2000  was  $803,887,  up
$246,608  from $557,279 in the first quarter of 1999.  On a per  share
basis  earnings  registered a similar increase from  $1.40  to  $2.01.
These  levels of income represent annualized returns on average assets
of  1.80%  and  1.37%,  respectively.  Return on average  equity  also
increased  from  15.42% to 19.90%.  Details concerning  the  Company's
results of operations are discussed in the following sections of  this
report.

      Net  interest  income  for the first  quarter  of  2000  totaled
$2,417,417, up $431,331 from $1,986,086 in the first 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 $160.4 million are $10.7 million in  excess
of  the  first 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 $716,980 from $3,051,810  in  the
first  quarter  of  1999 to $3,768,790 in the first quarter  of  2000.
This   increase  reflects  the  volitile  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  $228,161 when compared to the first quarter  of  last  year
including  the  fact  that  the average balance  of  interest  bearing
liabilities  was  up  $13.9 million.  This is  the  result  of  higher
interest rates.  The overall cost of interest bearing liabilities  for
the  quarter  of  5.04% is 16 basis points higher than  in  the  first
quarter of 1999, reflecting several rate increases implemented in late
1999 and early 2000.

      This  combination of higher average balances  and  higher  rates
produced a net interest margin of 5.37% for the quarter, up from 4.52%
in the first quarter of last year.

                                   13

                         SOUTH BANKING COMPANY
                             ALMA, GEORGIA
                MANGEMENT'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 $87,500 and $75,000 during
the three months ended March 31, 2000 and 1999, respectively.

Noninterest Income

      Following  is a comparison of noninterest income for  the  three
months ended March 31, 2000 and 1999.

                                              Three          Three
                                                Months          Months
Ended                                             Ended
                                                           March 31,  March 31,
                                                            2000           1999
Service charges on deposits                  $  354,223     $  336,116
Other service charges, commissions
 & fees                                          28,137         15,275
Other income                                    291,461        198,707

Total Noninterest Income                     $  673,821     $  550,098


      Total  noninterest income for the three months ended  March  31,
2000  was  $123,723 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
could 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 first quarter of 2000 of $1,796,642
was $131,524, or 7.90% greater than during the first quarter of 1999.

                                   14

                         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 $78,990 to  $954,501.   Salaries  have
increased as a result of the normal growth in assets and normal salary
increases.  Increases  were also experienced in  group  insurance  and
pension expense.

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

Income Taxes

      The Company's provision for income taxes, which totaled $403,209
in  the  first  quarter of 2000 and $238,787 in the first  quarter  of
1999, includes both federal and state income taxes.  The effective tax
rates during the two periods were 33.4% in 2000 and 30.0% in 1999.


Financial Condition

      Average  total  assets during the first  quarter  of  2000  were
$178,392,115, up from $162,834,843 from the first 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  first quarter by $8,873,992  to  $141,156,607.
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 March 31, 1999, the loan  portfolio
has  increased  substantially.  Commercial  and  real  estate  lending
remains  the  largest part of the portfolio and where  the  growth  is
derived.

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 the amount recognized in the consolidated balance sheets.
At  March  31,  2000, commitments to extend credit,  including  unused
lines  of credit, totaled $32,238,000 while letters of credit  totaled
$524,000.

                                   15

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

Loan Portfolio (Con't)

     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)

                                                 -------March 31------
-
                                                2000           1999
                                                      (Unaudited)
     Loans past due 90 or more days
      still accruing interest                   $   155        $   183

     Nonperforming assets:
      Nonaccruing loans                         $   843        $   625
      Other real estate owned                       700            182

                                                $ 1,543        $   807

      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 March 31, 2000,  the
allowance  for  loan losses was $2,302,889 or 1.63%  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 $87,500 during the first quarter  of  2000  and
$75,000 during the first 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 March 31, 2000, the held to maturity portfolio
totaled $747,246.
                                   16

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

Securities Portfolio and Federal Funds Sold (Con't)

      Management  attempts to emphasize the available for  sale  port-
folio  due to the flexibility it allows in managing the balance  sheet
structure   and  addressing  asset/liability  issues.  At  March   31,
2000,this
portfolio  had  an estimated fair value of $18,140,737, $440,031  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  $16,044,973 at quarter end or 88.4% of the available  for  sale
portfolio.  Tax exempt municipals totaling $1,605,050 comprised  8.8%.
The  remainder  of the portfolio, which totals $490,714,  consists  of
bank holding 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  secur-ities 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 March 31, 2000 of $160,918,995 were  up  from
their  year  end  total  of  $152,799,975.   The  first  quarter   has
traditionally been a slow growth period.  First quarter deposits  have
increased $8,119,020.

      Noninterest bearing deposits increased $1,273,026 to $22,735,828
during  the  quarter.  In contrast to this, interest bearing  deposits
increased  $6,845,994  or 5.2%, to $138,183,167  during  the  quarter.
Increases were experienced in all types of interest bearing deposits.

                                   17

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

Deposits and Other Funding Sources (Con't)

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

Year 2000 Compliance

     Year 2000 has passed and the Banks have not had any effect on its
computerized  systems.   The Banks continue to  monitor,  but  do  not
anticipate,  any  problems  in the future.   Expenditures  for  future
monitoring is not contemplated.

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.










                                   18
                         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 March 31, 2000.












































                                  19



                              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:  May 10, 2000               By:
                                     Paul Bennett
                                     President


Date:  May 10, 2000               By:
                                     Olivia Bennett
                                     Vice President