Southern Bank Rebuilt Its Digital Banking. The Loan Application Is Next
On Monday, October 19, 2026, Southern Bank and Trust switched its customers to a new digital banking platform. Personal users got an update prompt, business users got a new app, and everyone got a new login. A bank chartered in Mount Olive, North Carolina, on January 29, 1901, rebuilt its online front door.
The conversion is the visible part. The numbers behind it are the better story.
A Two-Year Turnaround
Southern Bank is the banking subsidiary of Southern BancShares (N.C.), Inc., which trades over the counter as SBNC. As of June 30, 2026, the bank held $5.30 billion in assets and $4.83 billion in deposits, with 603 full-time-equivalent employees and 57 offices: 47 in eastern North Carolina and 10 in Hampton Roads and the Richmond area.
Here is what its FDIC call reports show over two years:
- Efficiency ratio: 69.4% in Q1 2024, 65.2% for full-year 2024, 56.6% for 2025, and 52.6% for the first half of 2026
- Net interest margin: 2.68% in Q1 2024, 3.70% in the first half of 2026
- First-half net income: $36.8 million in 2026, up 57% from $23.5 million in 2025
- Return on assets: 1.40% for the first half of 2026, return on equity 17.1%
Most of that came from the margin. First-half interest expense fell from $30.3 million in 2025 to $24.6 million in 2026, while interest income rose 12%. Net interest income grew 24%. Noninterest expense rose about 7%. When revenue outruns expenses by that much, the efficiency ratio falls on its own.
One quarter muddies the trend. Q1 2026 included a $9.2 million loss on securities sales, which pulled that quarter's ROA down to 0.89%. By midyear, cumulative securities losses were down to $2.7 million, and the half-year ROA was 1.40%. Repositioning a bond portfolio like that trades a one-time loss for higher yields later.
Credit stayed clean throughout: net charge-offs ran 0.12% of loans, annualized, in the first half of 2026.
What the Loan Book Actually Holds
Eastern North Carolina is farm country, but Southern Bank's balance sheet is mostly commercial real estate and homes. Of $3.60 billion in gross loans at midyear:
- Nonfarm, nonresidential real estate: $1.50 billion (42%)
- One-to-four family residential: $1.29 billion (36%)
- Commercial and industrial: $259 million
- Construction and land: $197 million
- Multifamily: $121 million
- Farmland and agricultural production combined: $165 million (about 5%)
What 2025 Mortgage Data Shows
Southern Bank's 2025 HMDA filing shows 1,557 originated home loans totaling $440.7 million. Purchase loans made up 678 of them, at $267.5 million and an average of about $395,000. The rest were refinances, home improvement, and other purposes.
Three markets show how different the borrowers are:
- Dare County (Outer Banks): 99 loans, $36.9 million, averaging about $372,000
- Virginia Beach: 65 loans, $23.1 million, averaging about $356,000
- Wayne County (headquarters): 49 loans, $7.8 million, averaging about $159,000
The military piece stands out. Southern Bank has offices near Seymour Johnson Air Force Base in Goldsboro and throughout Hampton Roads, home to Naval Station Norfolk. Yet of its 1,557 loans in 2025, 1,547 were conventional. It made 8 VA loans, 2 USDA loans, and no FHA loans.
Of 1,557 home loans in 2025, Southern Bank made 8 VA loans, in a footprint built around an Air Force base and the largest naval station in the world.
That is a choice many community banks make: VA lending has its own rules and servicing work. But military borrowers who don't use VA loans still bring the same income questions. Base pay, housing allowance, and special pays all show up on a Leave and Earnings Statement, not a standard pay stub.
The Base Is Staying
The military customer base looks more secure now than it did a year ago. In 2024, the Air Force proposed retiring F-15E Strike Eagles at Seymour Johnson, and Congress blocked the move in the 2025 defense bill. In August 2026, Air Force Secretary Troy Meink wrote to Senator Ted Budd that Seymour Johnson will replace its F-15Es with new F-15EX Eagle IIs, subject to Congress funding them in the fiscal 2027 budget. He also said the Air Force has no plans to cut the base's F-15 missions until replacement aircraft are in place.
For a bank headquartered about 15 miles from the flight line, that removes a large unknown.
The Next Front Door
Southern Bank has been building digital pieces for some time. It lists an Executive Vice President and Chief Digital Officer, Sondra McCorquodale, among its ten executive officers. That title is uncommon at a $5 billion bank.
Here is where its digital entry points stand as of October 2026:
- Deposit accounts: online, on a bank-branded site at openaccount.southernbank.com
- HELOC: an "Apply in Minutes" button for its home equity line special
- Mortgage: an online application through a separate mortgage portal
- Personal, auto, boat, and RV loans: a phone number and a contact form
- Business and agricultural loans: a contact form
The efficiency gains so far came mostly from margin. Margin gains don't repeat forever. Rates move, and deposit costs follow. Once the margin stops widening, the next efficiency gains come from processing more loans with the same 603 people.
That is the case for the loan application being next. A borrower who can apply at 9 p.m., with income verified during the application, arrives at the loan officer as a complete file instead of a voicemail.
Southern Bank just showed it can move a whole customer base to a new digital platform. The new platform serves the customers it already has. The loan application is what brings in new ones.