Sound Banking Co. reported earnings results for the second quarter and six months ended June 30, 2008. For the second quarter, the company reported that net income of $18,000 or $0.02 per diluted share compared to net income of $162,000 or $0.19 per diluted share for the second quarter of 2007. Net interest income was $868,000 for the current quarter, a decreased of $127,000 or 13% when compared to $994,000 for the second quarter of 2007. For the six months, the company reported net income of $115,000 or $0.14 per diluted share compared to net income of $410,000 or $0.49 per diluted share for the same period of 2007. Net interest income was $1,781,000, a decreased $201,000 or 10% from the $1,982,000 reported for the comparable 2007 period. The decline in earnings was primarily attributable to a lower interest margin and an increase in the loan loss provision. The decline in net interest income was the direct result of interest rate cuts by the Federal Reserve over the last nine months.

Sound Banking Co. reported earnings results for the first quarter ended March 31, 2008. For the quarter, the company reported that unaudited net income was $98,000 or $0.12 per diluted share compared with net income of $249,000 or $0.30 per diluted share for the first quarter of 2007. Earnings for the quarter were lower due to higher operating expenses due primarily to the opening of the Bank's new branch in Beaufort in July of last year, a decline in net interest margin and an increase in the provision for loan losses. Net interest income decreased $75,000 or 8% to $913,000 for the current period compared to $988,000 for the 2007 period. The decline in net interest income was the direct result of interest rate cuts by the Federal Reserve over the past several months.

Sound Banking Co. reported earnings results for the fourth quarter and year ended December 31, 2007. For the quarter, the company reported net income was $82,000 or $0.10 per diluted share compared with $257,000 or $0.31 per diluted share for the same three-month period of 2006. For the year, the company reported net income was $659,000 or $0.79 per diluted share compared with $917,000 or $1.12 per diluted share for the year ended December 31, 2006. Results for the current year were impacted by a lower net interest margin, a higher provision for loan losses and increases in operating expenses primarily as a result of branch expansion.