116 E. Main Street Mount Olive, North Carolina 28365 1-855-ASK-SBANK www.southernbank.com

MEMBER FDIC

October 10, 2013

Dear Valued Customer:

Hello and welcome to Southern Bank. We are excited to announce that we are just days away from introducing our Cash Management Online Banking and Bill Payment systems, which will replace your current Business Online Banking (BOB) programs. Our programs were designed specifically to save you time while allowing your business to monitor its cash position, daily transactions, and conduct payments and collections in a secure environment. As part of that change, our Cash Management team will be working to establish your Cash Management services on comparable Southern Bank services. You may notice some differences in the features of the services, and action may be required on your part before you can actually access the Southern version.

We have a Customer Care Team with Cash Management specialists on staff to assist you. They are available at 1-855-ASK-SBANK (1-855-275-7226), option 5, from 8:00 a.m. until 5:00 p.m. (EST), Monday–Friday, and 9:00 a.m. until 1 p.m. (EST), Saturdays.

Below you will find important date and access information about our new Cash Management Online Banking and Bill Payment systems – please read it carefully and thoroughly.

Temporary Online Banking & Online Bill Payment Service Limitations(While We Switch Systems)

System Unavailable to Access Available to Access

Online Banking Friday, October 25, 2013 at 6:00 a.m. EST Monday, October 28, 2013

Online Bill Payment Thursday, October 24, 2013 at 6:00 a.m. EST Monday, October 28, 2013

Our Online Banking system will be unavailable for customer access while we switch systems from Friday, October 25th at 6:00 a.m. until Monday, October 28th. If you plan to conduct any online banking transactions, please do so before 6:00 a.m. on October 25th.

Once you log in successfully and view your accounts, you will note there is no transaction history appearing because the transactions occurred on the old system – this is normal. However, your transaction history from the old system will be available to view immediately in your e-statements, which can be viewed in the new online banking. E-statements are viewable by all Online Banking customers, including those who still receive a paper statement, by enrolling. Of course, you will see any new transactions conducted in the new online banking system in your transaction history going forward, after conversion.

Any recurring transfers and alerts you had set up in the old version of online banking will need to be reset/re-keyed.Bill Pay will actually be unavailable after 6am on Thursday, October 24th. Please note that bill pay will makepreviously scheduled payments through October 25th. Please be sure to schedule your payments prior to 6:00 a.m. on Thursday, October 24th. Bill Payments scheduled for payment while the system is “unavailable to access” will be processed. Please note that during the “unavailable to access” period you will not be able to access the Online BillPayment system to make any changes. All of your payee and account information will convert and still be in bill pay. Also, some payees that were previously set up for certain payment types (i.e. electronic) may now be set up for an alternate payment method - such as paper - and could take longer to process. Please be sure to take note of the type of payment method each payee is set up to accept.

Important News - For Business Online Banking &

Bill Payment Customers

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116 E. Main Street Mount Olive, North Carolina 28365 1-855-ASK-SBANK www.southernbank.com

MEMBER FDIC

No bill pay transaction history that occurred in the old system will be available for viewing in Online Banking Bill Pay after converting to the new system, up to the first 5 days. However, your bill pay transaction history will be viewable in eStatements in the new online banking. As an extra precaution, you may want to print your payee information so that you can verify it is all there on the new system later. Please refer to the previous instructions provided in this letter for accessing your eStatements. Please note that previously scheduled bill payments that are made during the switch or within the first few days after conversion will not appear in online banking before Friday, November 1st. Rest assured if they were scheduled, they will be paid and you will see the transactions appear by Friday, November 1st. Please be sure not to re-enter a previously scheduled payment in bill pay, because it will result in duplicate payments and may overdraw your account.

Important! Please contact us right away if you depend upon BOB to review same-day details for charge-backs or incoming wire transfers. Our new programs provide this information to your contact(s) via an automated email upon each occurrence, rather than within Online Banking itself. To set up either of these services, please send an e-mail to either customercare@southernbank.com or lori.martin@southernbank.com.

Accessing Online Banking on Monday, October 28thSite Web Address

Southern Bank’s Website(Access Business Online Banking on the left-hand side of your screen) www.southernbank.com

Please note that our old address has changed and if you have set your browser’s favorites to access our Online Banking system in the past, you will need to update your favorites with our new address.

Accessing the new Online Banking site for the first timeBusiness Online Banking customers must log in to the new system using a NEW Customer ID, which will consist of your current Customer ID, plus “.”, and your current Username. For example, if your Customer ID is “Jones” and your Username is “admin”, then your NEW Customer ID will be Jones.admin. You will receive a package from the bank no later than October 18th, which includes new digital security tokens for all of your institution’s users. Important: Please issue the tokens only to the individuals whose names are on the envelopes and ask everyone to destroy the old tokens.

Other users will be recognized by the system, but you as the Administrator will need to log on Online Banking and grant them access to the accounts and functions they are authorized to use. This works very similarly to your BOB Preferred system.

Logging in to Online Banking Your First Time Beginning October 28thWhen prompted for: Enter:

Customer ID Your new Customer ID (Reference the instructions above)

Password (Temporary Password) Your 5-digit Zip Code & Last 4-digits of your Taxpayer ID Number (just numbers, no spaces or dashes), for example: 123456789

Password (New Password) Enter a password of your choosing in the following format:• 8 to 18 alpha / numeric characters in length• Must have at least one alpha and one numeric character• Must have at least one special character (!, @, #, $, %, ^, *)

Digital Security Token(ACH, Wire, and Positive Pay users only)

Your Digital Security Token is now required during your logon process. When prompted for your digital security token code, please follow the instructions you received with your new token.

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116 E. Main Street Mount Olive, North Carolina 28365 1-855-ASK-SBANK www.southernbank.com

MEMBER FDIC

Enclosed with this letter, you will find an illustrated guide to assist you in logging in for the first time. This guide provides a good step-by-step walk through on how to log in along with examples and information on logging in. You will also find an important tip sheet with critical information you’ll want to review to assure a smooth transition to the new system. Please read this tip sheet immediately, especially if you are a Bill Pay subscriber.

Don’t forget that at any point during this process you can contact our new Customer Care Center at 1-855-ASK-SBANK (1-855-275-7226) for assistance: Monday - Friday open 8:00 a.m. until 7:00 p.m. and Saturday open 9:00 a.m. until 1:00 p.m. We encourage you to call in advance of Monday, October 28th if you have any questions, as we anticipate call volumes will be high beginning that day. You may also continue to call your local branch with any questions.

When it comes to where you bank, we know that you have a choice. Thank you for making your choice Southern Bank, where our interest is You.

Sincerely,

Ruth Barus,Vice President

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Online Banking Log In Instructions

Step 1 – Log In to our new Online Banking system by:

1. Visiting our website at www.southernbank.com and entering your Customer ID in the Online Banking Center

When you first log in as an existing Online Banking customer you’ll be asked to do the following:

• Enter your Customer ID• Enter your temporary password• Follow the authentication process• Set up a new password

Enter your Customer ID (this will be the same Customer ID you have been using to log in to Online Banking. If you have been using your social security as your Customer ID, please enter it as your Customer ID.)

Step 2 – When you log in, you will reach the following screen detailing the security enhancements to our online banking system. Click the “Continue with Security Code” button.

Step 3 – Choose which method you prefer to receive the One-Time Security Code and press “Continue.”

Step 4a – Automated Voice Option – If you chose the automated voice option, your phone should ring. Answer and follow the instructions given by the automated voice. Enter the one-time security code provided on the website (like the example below), on your phone, and then on the computer screen press “Phone Call Completed.”

Step 4b.1 – SMS Message Option – If you chose the “Text Message” option, enter your mobile phone number and press “Send Text Message.”

Step 4b.2 – SMS Message Option – You should receive a text message shortly after entering your phone number displaying the security code. Enter that number into the space provided on your computer screen and press “Submit.”

Step 5 – Once you have completed the Authentication Process, you should be taken to the login screen below. Enter your username and press “Continue.”

Step 6 – Enter your password and press “Sign on.”

TO DO LISTS

In Advance

Make a list of current payees Mark the dates and times of system outages

Bill Pay - October 24, 2013 at 6:00 a.m. Online Banking - October 25, 2013 at 6:00 a.m.

Activate your new Visa® Debit Card or ATM Card but continue to use your old card until 5 a.m. October 28th Call Southern Bank Customer Care with any questions at 1-855-ASK-SBANK (1-855-275-7226)

During

You will be able to use your Debit Cards and ATM Cards as usual during the weekend

After

Reschedule recurring transfers and payments. Follow your instructions sent by mail. The instructions will also be posted at www.southernbank.com

Congratulations, you are now ready to begin accessing your Online Banking Information!