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, 1998   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, 1998.


   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

         Management's Discussion and Analysis of Financial
          Condition and Results of Operations . . . . . . . . . 11 - 12


Part II. Other Information  . . . . . . . . . . . . . . . . . . . .  13


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


                                          March 31,       December 31,
                                          1998            1997         

                                 ASSETS

Cash and due from banks                   $  6,563,571    $  8,128,444 

Deposits in other banks -                               
 interest bearing                         $  1,181,000    $  1,280,000 

Investment securities: 
 Available for sale                       $ 15,995,188    $ 15,341,990 

 Held to maturity                         $  1,269,775    $  1,605,567 

Georgia Bankers stock                     $    547,283    $    547,283   

Federal Home Loan Bank stock              $    396,200    $    344,500 
                                                      
Federal funds sold                        $ 10,606,000    $ 10,040,000 

Loans                                     $108,660,132    $106,525,222 
Less: Unearned discount                    (   142,719)    (   149,418)
Reserve for loan losses                    ( 1,861,676)    ( 1,821,680))))
                                                                      
                                          $106,655,737    $104,554,124 

Bank premises and equipment               $  4,028,147    $  4,078,502 

Goodwill                                  $    302,479    $    315,514 

Other assets                              $  3,444,101    $  3,658,636 


Total Assets                              $150,989,481    $149,894,560 


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

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


                                           March 31,       December 31,
                                           1998            1997       

                  LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities
Deposits:  Demand - non-interest
                     bearing              $ 19,781,887    $ 22,230,080 
           Demand - interest bearing        22,697,160      21,996,765 
           Savings                           9,318,774       8,668,639 
           Time                             81,341,186      79,706,608 
                                          $133,139,007    $132,602,092 
Borrowing                                    3,314,822       3,347,322 
Accrued expenses and other
 liabilities                                 1,500,298       1,299,188 
Federal funds purchased                              -         150,000 

Total Liabilities                         $137,954,127    $137,398,602 


Stockholders' Equity
Common stock $1 par value; shares 
 authorized - 1,000,000,  shares
 issued and outstanding -
 1998 and 1997 - 399,500
 and 399,500, respectively                $    399,500    $    399,500 
Surplus                                      3,070,831       3,070,831 
Undivided profits                            9,515,879       8,981,846 
Unrealized gain (loss) on
 securities                                     49,144          43,781 

Total Stockholders' Equity                $ 13,035,354    $ 12,495,958 


Total Liabilities and
 Stockholders' Equity                     $150,989,481    $149,894,560 


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

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


                                          Three Months    Three Months
                                          Ended           Ended       
                                          March 31,       March 31,   
                                          1998            1997         

Interest Income                                            
Interest and fees on loans                $  2,939,846     $ 2,547,193 
Interest on federal funds sold                 140,878         105,755 
Interest on deposits with other
 banks                                          15,416          29,776 
Interest on investment securities:                        
 U. S. Treasury                                 52,229          46,598 
 U. S. government agencies                     170,251         148,670 
 Mortgage backed securities                     16,965          24,727 
 State and political subdivisions               23,068          23,198 
 Dividends                                      34,637          26,610 

Total Interest Income                     $  3,393,290    $  2,952,527 
     

Interest Expense                                          
Interest on deposits                      $  1,453,482    $  1,166,615 
Interest on other borrowings                    64,807          70,147 

Total Interest Expense                    $  1,518,289    $  1,236,762 
                                                          
Net Interest Income                       $  1,875,001    $  1,715,765 
Provision for loan losses                       54,000          16,500 

Net interest income after provisions                      
 for loan losses                          $  1,821,001    $  1,699,265 

       
Other Operating Income                                    
Service charge on deposit accounts        $    280,274    $    280,057 
Commission on insurance                         21,889          27,026 
Other income                                    61,872          74,957 
Gain (loss) sale of securities                       6               4 
Computer income                                 42,199          34,653 

Total Other Operating Income              $    406,240    $    416,697 


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

                          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,   
                                          1998            1997         

Other Operating Expenses                                                 
Salaries                                  $    595,839    $    577,692 
Profit sharing and other personnel
 expense                                       111,738         107,091 
Occupancy expense                              107,633         117,958 
Furniture and fixtures expense                 167,506         104,618 
Payroll taxes                                   38,869          39,916 
Data processing                                 40,785          62,892 
Other operating expenses                       402,990         362,658 

Total Other Operating Expenses            $  1,465,360    $  1,372,825 

Income before income taxes                $    761,881    $    743,137 
Applicable income taxes                        227,848         234,405 
                                                   
Net income                                $    534,033    $    508,732 

Other comprehensive income, net of tax
 Unrealized gains (losses) on
  securities                              $      5,363    $(    66,853)

Other comprehensive income (loss)         $      5,363    $(    66,853)


Comprehensive income                      $    539,396    $    441,879

Per share data on weighted average
 outstanding shares                                       
Weighted average outstanding shares            399,500         402,838 
                                                          
Net income per share                      $      1.337    $      1.263 


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

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


                                           Three Months   Three Months
                                           Ended          Ended       
                                           March 31,      March 31,   
                                           1998           1997         

Cash Flows From Operating Activities:
 Net income                                $    534,033   $    508,732 
 Add expenses not requiring cash:                         
  Provision for depreciation and                          
   amortization                                 149,442        138,708 
  Provision for loan losses                      54,000         16,500 
 Bond portfolio losses (gains)                        6    (         4)
 Gain on sale of other real estate
  owned                                               -              - 
 Increase (decrease) in taxes
  payable                                       220,820        196,900 
 Increase (decrease) in interest
  payable                                       105,955         49,686 
 Increase (decrease) in other
  liabilities                               (   125,665)       209,284 
 (Increase) decrease in interest                          
  receivable                                     24,550        111,531
 (Increase) decrease in prepaid
  expenses                                  (    19,339)   (    36,425)
 (Increase) decrease in other assets            206,759         17,810
 Recognition of unearned loan income        (     6,699)   (     5,750)
                                                          
Net Cash Provided (Used) in Operating
 Activities                                $  1,143,862   $  1,206,972 
                                                          
                                                          
Cash Flows From Investing Activities:
 Proceeds from maturities of investment
  securities - available for sale          $  1,565,386   $    126,665 
 Proceeds from maturities of investment
  security - held to maturity                   838,117        500,223 
 Purchase of investment securities - AFS    ( 2,205,273)   ( 2,097,070)
 Purchase of investment securities - HTM    (   502,136)             -
 Net loans to customers                     ( 2,148,914)   ( 5,700,037)
 Purchase of premise and equipment          (    91,630)   (   188,717)
 Proceeds from sale of equipment                      -              - 
 Proceeds from other real estate owned                -              - 
 Purchase of FHLB stock                     (    51,700)   (    15,400)

Net Cash Provided (Used) in Investing
 Activities                                $( 2,596,150)  $( 7,374,336)


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

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


                                           Three Months   Three Months
                                           Ended          Ended       
                                           March 31,      March 31,   
                                           1998           1997         
                                                                 
Cash Flows From Financing Activities:                                 
 Net increase (decrease) in demand                                    
  deposits, NOW and money market           $( 1,747,798)  $( 1,095,186)
 Net increase (decrease) in savings                       
  and time deposit                            2,284,713      1,279,170 
 Net increase (decrease) in short-term                    
  borrowings                                (    32,500)        22,500 
 Dividends paid                                       -              -
 Redemptions of company stock                         -    (    43,750)
 Federal funds purchased                    (   150,000)       180,000 
                                                          
Net Cash Provided (Used) From
 Financing Activities                      $    354,415   $    342,734 

Net Increase (Decrease) in Cash
 and Cash Equivalents                      $( 1,097,873)  $( 5,824,630)

Cash and Cash Equivalents at
 Beginning of Year                           19,448,444     20,732,559 

Cash and Cash Equivalents at
 End of Period                             $ 18,350,571   $ 14,907,929 


 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 merger of Pineland State Bank into South
Banking Company was completed.  The purchase method of accounting was
used to record this transaction.  The activity of Pineland State Bank
since January 11, 1996 has been consolidated in these statements.

     Effective January 1, 1993, the company adopted FASB 109 regarding
the recording of deferred income taxes.  Prior year statements have been
restated to reflect an adjustment required of $58,508 reduction in
deferred taxes and an increase in equity.

     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


     During the first quarter of 1996, Pineland State Bank of Metter,
Georgia was acquired by South Banking Company.  Effective January 11,
1996, the accounts of Pineland State Bank have been consolidated with
South Banking Company.  

     During the first quarter of 1998, total assets increased $1,094,921
compared to an increase of $1,206,044 in 1997.  This increase represents
a .73% increase from January 1, 1998.  The banks historically have not
increased in assets during the first quarter compared to the remaining
parts of the year.  The last twelve months have increased at a 13.10%
rate.  This growth is more than previous years, as South Banking Company
had not been aggressive in the time deposit market.  Most growth in the
area has been as a result of rates paid and has tended to move to the
highest bidder.  South has been aggressive in maintaining its core
deposit to minimize any detriment to its interest margins as a result of
certificate growth.  Loan demand continues to be strong and has been
funded internally through deposit growth as loan to deposit ratio has
reached levels that any new growth must be from deposit.

     This policy has put a strain on the liquidity of the bank. 
Historically, liquidity of the bank has been provided from financing
activities such as deposit growth.  While the bank has refrained from
active pursuit of high paying deposits, it is believed that if the banks
loan demand continues to grow the opportunity to raise the funds from
deposits to provide adequate interest margins exist.  In addition, the
banks have sufficient lines to purchase federal funds in the event of a
short term need.  Operational profits remain high and add additional
cash flow for liquidity purposes.

     Net income increased by $25,301 for the first quarter, 1998
compared to an increase of $133,808 for the fist quarter, 1997.  While
the increase has been significant, additional increases are anticipated
when all the changes at Pineland State Bank become fully implemented. 
The major change has been in the improvement of the net interest
margins.  South continues to have excellent margins as compared to its
peer group.  This is partly as a result of the policy not to
aggressively pursue high paying "hot" deposits.  South remains aware of
its interest rate sensitivity as the Federal Reserve raises its interest
rate and this has a ripple effect down to the bank.  The bank is working
to maintain its interest rate gap at a point that the volatility of the
current interest rate market will not materially affect its margins.

     Provision for loan losses are maintained at levels that are
adequate based on management's evaluation of the loan portfolio. 
Pineland State Bank has a substantial reserve to handle any problems
that might arise.  Pineland's reserve has been increased substantially
in prior years due to loan problems.  Most of the problems have been
worked out and reserve remains more than adequate.


                         SOUTH BANKING COMPANY
                           ALMA,     GEORGIA
               MANAGEMENT'S DISCUSSION AND ANALYSIS OF 
         FINANCIAL CONDITION AND RESULTS OF OPERATIONS (con't)


     Operating expenses have increased slightly during this period
compared to 1997.  The increase of $92,535 is at a rate of 6.74%.  The
increase remains relatively small with increase scattered throughout all
areas with furniture and fixture expense increasing due to a computer
conversion.  This increase is in keeping with inflationary trends in the
area.

     Net income has risen to $1.337 per share compared to 1.263 for
1997.  This continues a trend that has existed for the last few years. 
The banks continue to monitor the economy and its operation to insure
proper actions are taken to counter any changes that might occur. 
State-wide branching has been approved; however, South has not been
affected at this time.  Currently one location has a new branch by a
competitor from an adjoining county.  This will cause some market shake
up.  Management does not expect significant change in its current
deposit base.

                         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, 1998.


                              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 12, 1998       By:PAUL BENNETT
                             Paul Bennett
                             President


Date:  May 12, 1998       By:OLIVIA BENNETT  
                             Olivia Bennett
                             Vice President