ITEM 1 - BUSINESS:
General
Southern BancShares (N.C.), Inc., a Delaware corporation (hereinafter, with all of its subsidiaries, referred to as the "Registrant" or BancShares"), is a bank holding company pursuant to the provisions of the Bank Holding Company Act of 1956, as amended. BancShares is the successor to Southern BancShares (N.C.), Inc., a North Carolina corporation ("SBS") which was formed in 1982 to become the parent company of Southern Bank and Trust Company ("Southern"), its principal operating subsidiary, which it acquired in late 1982. BancShares was formed in 1986 in order to affect the reincorporation in Delaware of the holding company of Southern Bank by the merger of SBS into BancShares, which was effective on December 28, 1986. All significant activities of the Registrant and its subsidiary are banking related so that the Registrant operates within one industry segment. Neither BancShares nor its subsidiary has any foreign operations.
The operating subsidiary of BancShares is Southern Bank and Trust Company ("Southern"), which is engaged in commercial banking primarily in eastern North Carolina. Southern's predecessor bank was organized on January 29, 1901, as the Bank of Mount Olive. In 1913, it became the First National Bank and remained so until 1936 when it rechartered as the Bank of Mount Olive. In 1967, Southern acquired its present name. Over the years, Southern's growth has been generated principally through branching and by merging with four other banks: Roanoke Chowan Bank, Roxobel, North Carolina in 1969, Merchants' and Farmers' Bank, Macclesfield, North Carolina in 1973, Tarheel Bank & Trust Co., Gatesville, North Carolina in 1986 and Citizens Savings Bank, Rocky Mount, North Carolina in 1993. Also in 1993, Southern acquired deposits in four branches of two savings institutions and an office of NationsBank in Pollocksville, North Carolina. In 1994 Southern acquired deposits in branches in Scotland Neck, North Carolina and Turkey, North Carolina from First Citizens Bank. In 1995 Southern acquired deposits in branches in Farmville, North Carolina; Garland, North Carolina; Kill Devil Hills, North Carolina and Salemburg, North Carolina from First Union National Bank. In 1995 Southern also acquired the deposits of a branch in Kill Devil Hills, North Carolina from First Citizens Bank. In 1996 Southern acquired deposits in a branch in Windsor, North Carolina from First Citizens Bank, acquired deposits in a branch in Edenton, North Carolina from United Carolina Bank and sold the deposits of its branch in Scotland Neck, North Carolina to Triangle Bank. In 1997 Southern acquired deposits in branches in Aulander, North Carolina, Aurora, North Carolina and Hamilton, North Carolina from Wachovia Bank of North Carolina, N.A. Refer to "Related Parties" in Note 15 on page 37 of the 1997 Annual Report of Southern BancShares (N.C.), Inc. in Exhibit number 13 for additional information regarding First Citizens Bank. In terms of total assets, at December 31, 1997, Southern was the eleventh largest bank in North Carolina.
Business
Southern conducts a general banking business designed to meet the needs of the people of its market area. These services, all of which are offered at its 42 offices, include, among other items: taking deposits; cashing checks and providing for individual and commercial cash needs; and providing numerous checking and savings plans, including automatic transfer services, direct deposit, and banking by mail.
Southern also makes commercial, consumer and mortgage loans at its 32 full service offices and provides individual retirement account service, safe deposit box rental, travelers' check service, and Master Card and Visa credit card programs.
The Bank has twenty automatic teller machines; one each in Ahoskie, Ayden, Belhaven, Bethel, Edenton, Farmville, LaGrange, Mount Olive, Murfreesboro, Nashville, Plymouth, Roanoke Rapids, Warsaw, Whitakers and Windsor, North Carolina and two in Kill Devil Hills and Rocky Mount North Carolina. Southern has one satellite automatic teller machine at Duplin General Hospital in Kenansville, North Carolina.
Southern does not operate in the international financing market.
Southern has a wholly-owned subsidiary: Goshen, Inc., which acts as agent for credit life and credit accident and health insurance written in connection with loans made by Southern.
Statistical Information
Certain statistical information with respect to BancShares' business is included in the information incorporated herein under "Item 7" below.
Supervision and Regulation
The business and operations of BancShares and Southern are subject to extensive federal and state governmental regulation and supervision.
BancShares is a bank holding company registered with the Board of Governors of the Federal Reserve System (the "Federal Reserve") under the Bank Holding Company Act of 1956 as amended (the "BHCA"), and is subject to supervision and examination by and the regulations and reporting requirements of the Federal Reserve. Under the BHCA, the activities of BancShares are limited to banking, managing or controlling banks, furnishing services to or performing services for its subsidiaries or engaging in any other activity which the Federal Reserve determines to be so closely related to banking or managing or controlling banks as to be a proper incident thereto.
The BHCA prohibits BancShares from acquiring direct or indirect control of more than 5 percent of the outstanding voting stock or substantially all of the assets of any financial institution, or merging or consolidating with another bank holding company or savings bank holding company, without prior approval of the Federal Reserve. Additionally, the BHCA prohibits BancShares from engaging in, or acquiring ownership or control of more than 5 percent of the outstanding voting stock of any company engaged in, a nonbanking activity unless such activity is determined by the Federal Reserve to be so closely related to banking as to be properly incident thereto. In approving an application by BancShares to engage in a non-banking activity, the Federal Reserve must consider whether that activity can reasonably be expected to produce benefits to the public, such as greater convenience, increased competition or gains in efficiency, that outweigh possible adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts of interest or unsound banking practices.
There are a number of obligations and restrictions imposed by law on a bank holding company and its insured depository institution subsidiaries that are designed to minimize potential loss to depositors and the FDIC insurance funds. For example, if a bank holding company's insured depository institution subsidiary becomes "undercapitalized," the bank holding company is required to guarantee (subject to certain limits) the subsidiary's compliance with the terms of any capital restoration plan filed with its appropriate federal banking agency. Also, a bank holding company is required to serve as a source of financial strength to its depository institution subsidiaries and to commit resources to support such institutions in circumstances where it might not do so, absent such policy. Under the BHCA, the Federal Reserve has the authority to require a bank holding company to terminate any activity or to relinquish control of a nonbank subsidiary upon the Federal Reserve's determination that such activity or control constitutes a serious risk to the financial soundness and stability of a depository institution subsidiary of the bank holding company.
As a result of its ownership of a North Carolina-chartered commercial bank, BancShares also is registered with and subject to examination and regulation by the North Carolina Commissioner of Banks under the state's bank holding company laws.
Southern is a North Carolina commercial bank and its deposits are insured by the FDIC. It is subject to supervision and examination by and the regulations and reporting requirements of the North Carolina Commissioner of Banks (the "Commissioner") and the FDIC.
Southern is subject to legal limitations on the amounts of dividends it is permitted to pay. Prior approval of the Commissioner is required if the total of all dividends declared by Southern in any calendar year exceeds its net profits (as defined by statute) for that year combined with its retained net profits (as defined by statute) for the preceding two calendar years, less any required transfers to surplus. As an insured depository institution, Southern also is prohibited from making capital distributions, including the payment of dividends, if, after making such distribution, it would become "undercapitalized" (as such term is defined in the Federal Deposit Insurance Act).
Under current federal law, certain transactions between a depository institution and its affiliates are governed by Section 23A and 23B of the Federal Reserve Act. An affiliate of a depository institution is any company or entity that controls, is controlled by or is under common control with the institution, and, in a holding company context, the parent holding company of a depository institution and any companies which are controlled by such parent holding company are affiliates of the depository institution. Generally, Sections 23A and 23B (i) limit the extent to which a depository institution or its subsidiaries may engage in covered transactions with any one affiliate, and (ii) require that such transactions be on terms and under circumstances substantially the same, or at least as favorable, to the institution or the subsidiary as those provided to a nonaffiliate.
Southern is subject to various other state and federal laws and regulations, including state usury laws, laws relating to fiduciaries, consumer credit and equal credit, fair credit reporting laws and laws relating to branch banking. As an insured institution, Southern is prohibited from engaging as a principal in activities that are not permitted for national banks unless (i) the FDIC determines that the activity would pose no significant risk to the appropriate deposit insurance fund and (ii) the institution is, and continues to be, in compliance with all applicable capital standards. Insured institutions also are prohibited from directly acquiring or retaining any equity investment of a type or in an amount not permitted for national banks.
The Federal Reserve, the FDIC and the Commissioner all have broad powers to enforce laws and regulations applicable to BancShares and Southern and to require corrective action of conditions affecting the safety and soundness of Southern. Among others, these powers include cease and desist orders, the imposition of civil penalties and the removal of officers and directors.
Capital Requirements
Bank holding companies are required to comply with the Federal Reserve's risk-based capital guidelines which require a minimum ratio of total capital to risk-weighted assets of 8 percent. At least half of the total capital is required to be Tier I capital. In addition to the risk-based capital guidelines, the Federal Reserve has adopted a minimum leverage capital ratio under which a bank holding company must maintain a level of Tier I capital to average total consolidated assets of at least 3 percent in the case of a bank holding company which has the highest regulatory examination rating and is not contemplating significant growth or expansion. All other bank holding companies are expected to maintain a leverage capital ratio of a least 1 percent to 2 percent above the stated minimum.
Southern is also subject to capital requirements imposed by the FDIC. Under the FDIC's regulations, insured institutions that receive the highest rating during the examination process and are not anticipating or experiencing any significant growth are required to maintain a minimum leverage ratio of 3 percent of Tier I capital to average total consolidated assets. All other insured institutions are required to maintain a minimum ratio of 1 percent or 2 percent above the stated minimum, with a minimum leverage ratio of not less than 4 percent. The FDIC also requires Southern to have a ratio of total capital to risk-weighted assets of at least 8 percent.
Insurance Assessments
Southern is subject to insurance assessments imposed by the FDIC. During 1995 the FDIC reduced the Bank Insurance Fund ("BIF") assessment rates for the highest rated banks to .04 percent, but left unchanged the .31 percent rate for the weakest banks; and, effective January 1, 1996, the FDIC again reduced BIF assessments to a range of 0 percent to .27 percent. These recent premium reductions do not affect the deposit premiums paid on Savings Association Insurance Fund ("SAIF") insured deposits. The actual assessment to be paid by each insured institution is based on the institution's assessment risk classification, which is determined based on whether the institution is considered "well capitalized", "adequately capitalized" or "under capitalized", as such terms have been defined in applicable federal regulations, and whether the institution is considered by its supervisory agency to be financially sound or to have supervisory concerns. The FDIC also is authorized to impose one or more special assessments in any amount deemed necessary to enable repayment of amounts borrowed by the FDIC from the United States Treasury Department.
The Deposit Insurance Funds Act of 1996 ("DIFA96") required the FDIC to impose a one-time special assessment on SAIF-assessable deposits, including those held by BIF-member OAKAR ("OAKAR") institutions such as Southern to capitalize the SAIF to its target Designated Reserve Ratio. Southern was accordingly assessed $569 thousand in September 1996.
The DIFA96 also required that, beginning January 1, 1997, BIF banks and OAKAR institutions would begin to be charged a separate assessment for the Financing Corporation ("FICO") funding requirements. The FICO rate is not tied to the FDIC risk classification and is subject to change by the FDIC within certain limitations.
The FICO rate for the first quarter of 1998 is set at an annual rate of 6.28 basis points of OAKAR adjusted deposits as defined by the FDIC and 1.256 basis points of BIF adjusted deposits. At September 30, 1997 the FICO assessable OAKAR deposit base for Southern was $99 million and the BIF deposit base was $398 million. If Southern's deposits remained at these levels and the FDIC maintained the same rates, the expense for the FICO obligation for Southern would be approximately $112 thousand for 1998.
Change in Control
State and federal law restricts the amount of voting stock of a bank holding company, or a bank, that a person may acquire without the prior approval of banking regulators.
Pursuant to North Carolina law, no person may, directly or indirectly, purchase or acquire voting stock of any bank holding company or bank which would result in the change of control of that entity unless the Commissioner first shall have approved that proposed transaction. A person will be deemed to have acquired "control" of a bank holding company or bank if that person, directly or indirectly, (i) owns, controls or has the power to vote 10 percent or more of the voting stock of the bank holding company or bank, or (ii) possesses the power to direct or cause the direction of its management and policy. Federal law imposes additional restrictions on acquisitions of stock in bank holding companies and insured banks. Under the federal Change in Bank Control Act and regulations thereunder, a person or group acting in concert must give advance notice to the Federal Reserve or the FDIC before directly or indirectly acquiring the power to direct the management or policies of, or to vote 25 percent or more of any class of voting securities of, any bank holding company or insured bank. Upon receipt of such notice, the federal regulator either may approve or disapprove the acquisition.
Under the Act, a change in control is presumed to occur if, among other things, a person or group acquires more than 10 percent of any class of voting stock of a holding company or insured bank and, after such acquisition, the acquirer will be the largest shareholder.
Interstate Banking and Branching
Federal law permits adequately capitalized and managed bank holding companies to acquire control of the assets of banks in any state (the "Interstate Banking Law"). Acquisitions will be subject to anti-trust provisions that cap at 10 percent the portion of the total deposits of insured depository institutions in the United States that a single bank holding company may control, and generally cap at 30 percent the portion of the total deposits of insured depository institutions in a state that a single bank holding company may control. Under certain circumstances, states have the authority to increase or decrease the 30 percent cap, and states may set minimum age requirements of up to five years on target banks within their borders.
Beginning June 1, 1997, and subject to certain conditions, the Interstate Banking Law permited interstate branching by allowing a bank to merge with a bank located in a different state. The Interstate Banking Law also permits banks to establish branches in other states, by opening new branches or acquiring existing branches of other banks, if the laws of those other states specifically permit that form of interstate branching. North Carolina has adopted statutes which, subject to conditions contained therein, specifically authorize out-of-state bank holding companies and banks to acquire or merge with North Carolina banks and to establish or acquire branches in North Carolina.
Economic Considerations
As a bank holding company whose primary asset is the capital stock of a commercial bank, BancShares is directly affected by regulatory measures affecting the banking industry in general. Additionally, since BancShares' banking business is centered in eastern North Carolina, the general state of the economy of eastern North Carolina, especially the agricultural sector, has a direct effect on its business and profitability.
Among governmental regulators of primary importance is the Federal Reserve which acts as the nation's central bank and can directly affect money supply and thereby affect Southern's lending ability by increasing or decreasing its interest costs and availability of funds. An important function of the Federal Reserve is to regulate the national supply of bank credit in order to combat recession and curb inflationary pressures. Among the instruments of monetary policy used by the Federal Reserve to implement these objectives are open market operations in U. S. Government securities, changes in the discount rate and surcharge, if any, on member bank borrowings, and changes in reserve requirements against bank deposits. These means are used in varying combinations to influence overall growth of bank loans, investments and deposits and may also affect interest rates charged on loans or paid for deposits.
Southern is not a member of the Federal Reserve System, but is subject to reserve requirements imposed on non-member banks by the Federal Reserve. The monetary policies of the Federal Reserve have had a significant effect on the operating results of commercial banks in the past and are expected to continue to do so in the future.
Competition
The banking laws of North Carolina allow statewide branching; therefore, commercial banking in the state is highly competitive. Southern competes directly in many of its markets with one or more of the largest banking organizations in North Carolina. Such competitors range in size to over $200 billion in consolidated resources (including resources represented by banking organizations in other states owned by or which control certain of such competitors), have broader geographic markets and higher lending limits and offer more services than Southern, and can, therefore, make more effective use of media advertising, support services and electronic technology than can BancShares or Southern.
Year 2000
In 1997 BancShares developed a plan to deal with the "Year 2000 issue". Refer to "Accounting and Other Matters" on pages 14 through 15 of the 1997 Annual Report of Southern BancShares (N.C.), Inc. in Exhibit number 13 for additional information regarding the Year 2000 issue.
Employees
At December 31, 1997, Southern employed 295 full-time employees and 14 part-time employees. It is not a party to any collective bargaining agreements and considers relations with its employees to be good. BancShares and Goshen do not have any separate employees.
Statistical Information
I. AVERAGE BALANCE SHEET ITEMS AND NET INTEREST DIFFERENTIAL AVERAGE BALANCES AND AVERAGE RATES EARNED AND PAID
(1) Includes non-accrual loans (2) Interest income includes related loan fee amounts which were immaterial. (3) The average rate on nontaxable investment securities has been adjusted to a tax equivalent yield using a 34% tax rate. (4) Interest rate spread is the difference between earning asset yield and interest bearing liability rate. (5) Net interest margin is net interest income divided by average earning assets.
II. AVERAGE BALANCE SHEET ITEMS AND NET INTEREST DIFFERENTIAL ANALYSIS OF CHANGES IN INTEREST DIFFERENTIAL
III. INVESTMENT PORTFOLIO
The following table sets forth the carrying amount of investment securities (dollars in thousands):
The following table sets forth the maturities of investment securities at December 31, 1997 (dollars in thousands) and the weighted average yields of such securities. (Note that nontaxable investment securities have not been adjusted to a tax equivalent basis and unrealized gain (loss) on available for sale is not included.)
(1) Mortgage-backed securities are included in the obligations of U.S. Government agencies and spread within the columns according to their anticipated repayment schedules.
(2) The "Within One Year" column of the "Other" category includes marketable equity securities held by BancShares. Accordingly, the yield on these securities represents anticipated dividend income rather than interest income.
IV. LOAN PORTFOLIO
Analysis of loans by type and maturity
The table below classifies loans by major category (dollars in thousands):
The following table identifies the maturities of all loans as of December 31, 1997 and addresses the sensitivity of these loans to changes in interest rates.
Non-accrual, past-due, and restructured loans
The following analysis identifies other real estate owned and loans that were either non-accruing, past-due or restructured. Loans are placed on a non-accrual basis when they become 90 days past due and the ability of the borrower to comply with the present terms is doubtful.
The amount of interest which would have been recorded in 1997 on non-accrual loans had they been in accordance with the original terms throughout the period was immaterial.
V. SUMMARY OF LOAN LOSS EXPERIENCE
Analysis of the allowance for loan losses:
The table presented below summarizes activity in the allowance for loan losses for the five years ended (dollars in thousands):
The allowances for loan losses is increased by charges to the provision for loan losses and reduced by loans charged off net of recoveries. Southern's provision is the amount necessary to maintain the allowance at a level considered adequate to provide for possible loan losses based on management's internal evaluation of the loan portfolio, as well as prevailing and anticipated economic conditions.
Allocation of the allowance for loan losses:
The composition of the allowance by loan category shown in the table below is based upon management's evaluation of the loan portfolio, past history, and prevailing economic conditions:
VI. DEPOSITS
The average monthly volume of deposits, which is considered representative of BancShares' operations, and the average rates paid on such deposits are presented below (dollars in thousands):
Maturities of $100,000 or more time certificates of deposit at December 31, 1997 are summarized as follows (dollars in thousands):
VII. RETURN ON EQUITY AND ASSETS
The following table presents certain ratios of the Company:
VIII. CAPITAL ADEQUACY
The following table presents certain calculations of BancShares' capital and related ratios:
(1) Bank holding companies operating at the 3% minimum are expected to have well diversified risk profiles, including no undue interest rate risk, excellent asset quality, high liquidity and strong earnings. Bank holding companies not meeting these requirements are expected to maintain a leverage ratio somewhat higher than the 3% minimum applicable to the highest rated companies.
(2) The minimum ratio of qualifying total capital to risk weighted assets is 8%, of which 4% must be Tier 1 capital, which is common equity, retained earnings, and a limited amount of perpetual preferred stock, less certain intangibles.
IX. RATE OF INTERNAL CAPITAL GENERATION
X. INTEREST RATE SENSITIVITY ANALYSIS
Interest sensitivity is continually changing. The table above reflects Bancshares' gap position at December 31, 1997 and does not necessarily represent its position on any other dates.
XI. SHORT-TERM BORROWINGS
ITEM 2
ITEM 2 - PROPERTIES
BancShares does not own or lease any real property. Except for four tracts of land that are leased and upon which are constructed leasehold improvements for the conduct of its banking business, Southern owns all of the real property utilized in its operations.
Southern's home office is located at 121 East Main Street, Mount Olive, North Carolina. At December 31, 1997 there were 42 Southern offices in North Carolina. These offices are listed in BancShares' 1997 Annual Report.
ITEM 3
ITEM 3 - LEGAL PROCEEDINGS:
There are no material legal proceedings to which BancShares or its subsidiaries are a party or to which any of their property is subject, other than ordinary, routine litigation incidental to the business of commercial banking.
ITEM 4
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS:
None.
PART II
ITEM 5
ITEM 5 - MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED SHAREHOLDER MATTERS:
Information is included on page 15 of the Registrant's 1997 Annual Report in Exhibit 13 incorporated herein by reference.
ITEM 6
ITEM 6 - SELECTED FINANCIAL DATA:
Information is included in table 1, Five-Year Financial Summary, Selected Balances and Ratios, on page 4 of Registrant's 1997 Annual Report in Exhibit number 13 incorporated herein by reference.
ITEM 7
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS:
Information is included on pages 4 through 16 of Registrant's 1997 Annual Report in Exhibit number 13 incorporated herein by reference.
Item 7A.
Item 7A. - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK:
Information is included under the section "Market Risk" on pages 11 and 12 of the Registrant's 1997 Annual Report in Exhibit number 13 incorporated herein by reference.
ITEM 8
ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA:
The following financial statements and independent auditors' report are incorporated herein by reference, on the page numbers indicated, in the 1997 Annual Report of Southern BancShares (N.C.), Inc. included in exhibit number 13 herein.
Independent Auditors' Report 17
Consolidated Balance Sheets as of December 31, 1997 and 1996 18
Consolidated Statements of Income for the years ended December 31, 1997, 1996 and 1995 19
Consolidated Statements of Cash Flows for the years ended December 31, 1997, 1996 and 1995 20
Consolidated Statements of Changes in Shareholders' Equity for the years ended December 31, 1997, 1996 and 1995 21
Notes To Consolidated Financial Statements 22-38
ITEM 9
ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES:
None
PART III
ITEM 10
ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT:
The information under the captions "PROPOSAL 1: ELECTION OF DIRECTORS" and "Executive Officers" on pages 5 through 7 and page 9 of Registrant's definitive Proxy Statement dated March 20, 1998, is incorporated herein by reference.
ITEM 11
ITEM 11 - EXECUTIVE COMPENSATION:
The information under the captions "Compensation of Directors", "Compensation Committee Interlocks and Insider Participation", "Committee Report on Executive Compensation", "Pension Plan", and "Employment Contracts, Termination of Employment and Change-in-Control Arrangements" on pages 7 through 9 and page 11 of the Registrant's definitive Proxy Statement dated March 20, 1998, is incorporated herein by reference.
ITEM 12
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT:
The information under the captions "PRINCIPAL HOLDERS OF VOTING SECURITIES" and "OWNERSHIP OF VOTING SECURITIES BY MANAGEMENT" on pages 2 through 5 of the Registrant's definitive Proxy Statement dated March 20, 1998, is incorporated herein by reference.
ITEM 13
ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS:
The information contained in "Transactions with Management" on pages 12 through 13 of the Registrant's definitive Proxy Statement dated March 20, 1998, is incorporated herein by reference.
PART IV
ITEM 14
ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K:
(a) 1. Financial Statements
The following consolidated financial statements of Southern BancShares (N.C.), Inc. and subsidiary, and Independent Auditors' Report thereon, are incorporated herein by reference from Registrant's 1997 Annual Report to Shareholders.
. Independent Auditors' Report
. Consolidated Balance Sheets at December 31, 1997 and 1996
. Consolidated Statements of Income for the years ended December 31, 1997, 1996 and 1995
. Consolidated Statements of Cash Flows for the years ended December 31, 1997, 1996 and 1995
. Consolidated Statements of Changes in Shareholders' equity for the years ended December 31, 1997, 1996 and 1995
. Notes to Consolidated Financial Statements
2. Financial statement schedules are omitted because of the absence of conditions under which they are required or because the required information is contained in the consolidated financial statements or related notes thereto which are incorporated herein by reference from Registrant's 1997 Annual Report to Shareholders.
3. Exhibits
The following exhibits are filed or incorporated herewith as part of this report on Form 10-K:
Exhibit Description of Exhibits Number
3.1 Certificate of Incorporation and Certificate of Amendment to the Certificate of Incorporation of the Registrant (filed as exhibits 3.1, and 3.2 respectively, to Amendment No. 1 to the Registrant's Registration Statement on Form S-4 (No. 33-8581) filed October 20, 1986 and incorporated herein by reference)
3.2 Registrant's Bylaws (filed as Exhibit 3. to the Registrant's 1992 Annual Report on Form 10-K and incorporated herein by reference)
4 Southern Bank and Trust Company Indenture dated February 27, 1971 (filed as exhibit 4 to the Registrant's Registration Statement on Form S-14 (No. 2-78327) filed July 7, 1982 and incorporated herein by reference)
10.1* Non-Competition and Consulting Agreement between R. S. Williams and Southern Bank and Trust Company (filed as exhibit 10.1 to the Registrant's 1989 Annual Report on Form 10-K and incorporated herein by reference)
10.2* Eighth Amendment to Noncompetition and Consulting Agreement between R. S. Williams and Southern Bank and Trust Company (filed herewith)
10.3* Assignment and Assumption Agreement and First Amendment of Noncompetition and Consultation Agreement between First-Citizens Bank & Trust Company, Southern Bank and Trust Company and M. J. McSorley (filed as exhibit 10.3 to the Registrant's 1989 Annual Report on Form 10-K and incorporated herein by reference)
13 Registrant's 1997 Annual Report to Shareholders (filed herewith)
22 Subsidiaries of the Registrant (filed herewith)
99.1** Registrant's definitive Proxy Statement dated March 20, 1998 for the 1998 Annual Shareholders' Meeting
(b) Reports on Form 8-K
No reports on Form 8-K were filed for the fourth quarter of the year ended December 31, 1997.
* Denotes a Management Contract or compensatory plan or arrangement in which an executive officer or director of the Company participates
** Not being refiled
Pursuant to the requirements of Section 13 or 15 (d) 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.
DATED: MARCH 19, 1998 SOUTHERN BANCSHARES (N.C.), INC. /s/ R. S. Williams By: ____________________________________________________ R. S. Williams, Chairman of the Board
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature Title Date
/s/R. S. Williams Chairman of the Board of March 20, 1998 R. S. Williams Directors
/s/David A. Bean Treasurer (principal March 19, 1998 David A. Bean financial and accounting officer)
/s/Bynum R. Brown Director March 23, 1998 Bynum R. Brown
/s/William H. Bryan Director March 25, 1998 William H. Bryan
/s/D. Hugh Carlton Director March 23, 1998 D. Hugh Carlton
/s/Robert J. Carroll Director March 20, 1998 Robert J. Carroll
/s/Hope H. Connell Director March 20, 1998 Hope H. Connell
/s/J. Edwin Drew Director March 23, 1998 J. Edwin Drew
/s/Moses B. Gillam, Jr Director March 26, 1998 Moses B. Gillam, Jr.
/s/Leroy C. Hand, Jr. Director March 23, 1998 LeRoy C. Hand, Jr.
/s/Frank B. Holding Director March 19, 1998 Frank B. Holding
/s/M. J. McSorley Director March 23, 1998 M. J. McSorley
/s/W. B. Midyette, Jr. Director March 23, 1998 W. B. Midyette, Jr.
/s/W. Hunter Morgan Director March 23, 1998 W. Hunter Morgan
/s/Charles I. Pierce Director March 26, 1998 Charles I. Pierce, Sr.
/s/W. A. Potts Director March 24, 1998 W. A. Potts
/s/Charles L. Revelle, Jr. Director March 23, 1998 Charles L. Revelle, Jr.
/s/ Charles O. Sykes Director March 25, 1998 Charles O. Sykes
/s/John N. Walker Director March 23, 1998 John N. Walker