<PAGE>
                                                                    EXHIBIT 10.5
 
                             EMPLOYMENT AGREEMENT
                                    BETWEEN
                  FIRST FEDERAL SAVINGS AND LOAN ASSOCIATION
                           AND JAMES B. LITTLE, JR.
                        -------------------------------

                                1997 Amendment
                                
                        -------------------------------
                                        
     WHEREAS, on August 17, 1995, First Federal Savings and Loan Association
(the "Association") entered into an Employment Agreement (the "Agreement") with
James B. Little, Jr. (the "Employee"); and

     WHEREAS, the Board of Directors of the Association and the Employee have
deter mined that it is in their respective best interests to amend the Agreement
(i) to improve the change-in-control protections provided thereunder, (ii) to
reflect an extension of the term of his Agreement, and (iii) to make other
adjustments to the Agreement as the interested parties have deemed appropriate;

     NOW, THEREFORE, the Agreement shall be amended as follows, with such
amendment to become effective immediately.

     1.  The first sentence in Section 5 of the Agreement shall be amended by
replacing the words "36 months thereafter" with "August 17, 2000".
 
     2.  The last sentence in Section 6(a) of the Agreement shall be amended by
deleting the following phrase at the end thereof:

     , or be gainfully employed in any other position or job other than as
     provided above

     3.  Section 9 of the Agreement shall be amended by deleting the following
words from its first sentence:

     (which shall only be applicable during the twelve-month period following a
     "Change in Control" as defined in Section 11 hereof)

     4.  The first sentence of Section 9(d)(1) of the Agreement shall be amended
by replacing the words "set forth in Section 11(b) hereof" with the words "that
begins on the date six months before a "Change in Control" (as defined in
Section 11 hereof) and ends on the later of the second annual anniversary of the
Change in Control or the expiration date of this Agreement (the "Protected
Period")".

     5.  The first sentence of Section 9(d)(2) of the Agreement shall be
amended by replacing the words "within the time period set forth in Section
11(b) hereof" with the words "during the Protected Period,".

     6.  Section 9(d)(2) shall further be amended by adding the word "or"
between "at Section 1;" and "(iv) a material diminution". 
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1997 Amendment
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     7.   Section 9(f) of the Agreement shall be amended by (i) replacing the
words "time period set forth in Section 11(b) hereof" with the words "Protected
Period," and by (ii) adding a closing parentheses at the end thereof.

     8.   Section 11(a)(1) of the Agreement shall be amended in its entirety to
provide as follows:

          Notwithstanding any provision herein to the contrary, if the
     Employee's employment under this Agreement is terminated by the
     Association, without the Employee's prior written consent and for a reason
     other than Just Cause during the Protected Period, the Employee shall,
     subject to paragraph (2) of this Section 11(a), be paid an amount equal to
     the difference between (i) the product of 2.99 times his "base amount" as
     defined in Section 280G(b)(3) of the Code and regulations promulgated
     thereunder (the "Maximum Amount"), and (ii) the sum of any other parachute
     payments (as defined under Section 280G(b)(2) of the Code) that the
     Employee receives on account of the Change in Control.

          The amount payable under this Section 11(a)(2) shall be paid either
     (i) in one lump sum within ten days of the later of the date of the Change
     in Control and Employee's last day of employment, or (ii) if prior to the
     date which is 90 days before the date on which a Change in Control occurs,
     the Employee filed a duly executed irrevocable written election in the form
     attached hereto as Exhibit "A", payment of such amount shall be made
     according to the elected schedule.  Deferred amounts shall bear interest
     from the date on which they would otherwise be payable until the date paid
     at a rate equal to 120% of the applicable federal rate, compounded
     semiannually, as determined under Code Section 1274(d) and the regulations
     thereunder.

     9.   The last sentence of Section 11(a)(2) of the Agreement shall be
amended in its entirety to provide as follows:

          Within five business days of the earlier of the Association's receipt
     of the Employee's determination pursuant to this paragraph or the
     Association's determination in lieu of a determination by the Employee, the
     Association shall pay to, or distribute for the benefit of, the Employee
     such amounts as are then due the Employee under this Agreement.

     10.  The first sentence of Section 11(b) of the Agreement shall be amended
in its entirety to provide as follows:
 
          Notwithstanding any other provision of this Agreement to the contrary,
     but subject to Section 11(a)(2) hereof, the Employee shall be entitled to
     collect the severance benefits set forth in Section 11(a)(1) hereof in the
     event that either (i) the Employee voluntarily terminates his employment
     under this Agreement for any reason with a 30-day period beginning on the
     date of a Change in Control, or (ii) the Employee voluntarily terminates
     his employment within ninety (90) days following the occurrence of any of
     the following events, which has not been consented to in advance
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1997 Amendment
Page 3 of 3

     by the Employee in writing and occur during the Protected Period: (i) the
                                ---                                           
     requirement that the Employee move his personal residence, or perform his
     principal executive functions, more than thirty (30) miles from his primary
     office as of the date of the change in control; (ii) a material reduction
     in the Employee's base compensation as in

     effect on the date of the change in control or as the same may be increased
     from time to time; (iii) the failure by the Association to continue to
     provide the Employee with compensation and benefits provided for under this
     Agreement, as the same may be increased from time to time, or with benefits
     substantially similar to those provided to him under any of the employee
     benefit plans in which the Employee now or hereafter becomes a participant,
     or the taking of any action by the Association which would directly or
     indirectly reduce any of such benefits or deprive the Employee of any
     material fringe benefit enjoyed by him at the time of the change in
     control; (iv) the assignment to the Employee of duties and responsibilities
     materially different from those normally associated with his position as
     referenced at Section 1; (v) a failure to elect or reelect the Employee to
     the Board of Directors of the Association, if the Employee is serving on
     the Board on the date of the change in control; (vi) a material diminution
     or reduction in the Employee's responsibilities or authority (including
     reporting responsibilities) in connection with his employment with the
     Association; or (vii) a material reduction in the secretarial or other
     administrative support of the Employee.

     11.  The first sentence of Section 11(d)(2) of the Agreement shall be
amended by replacing "twelve (12)" with "twenty-seven (27)".

     12.  Nothing contained herein shall be held to alter, vary or affect any of
the terms, provisions, or conditions of the Agreement other than as stated
above.

     WHEREFORE, the undersigned hereby approve this 1997 Amendment to the
Agreement.

Date of Execution: October ___, 1997


JAMES B. LITTLE, JR.

_____________________


FIRST FEDERAL SAVINGS AND LOAN ASSOCIATION

By_____________________________              Attest:_________________________   
    Its Chairman of the Board
                                                        CORPORATE SEAL
<PAGE>
 
                             EMPLOYMENT AGREEMENT
                                    BETWEEN
                        THE SOUTHERN BANC COMPANY, INC.
                           AND JAMES B. LITTLE, JR.
                        -------------------------------

                                1997 Amendment

                        -------------------------------

     WHEREAS, on August 17, 1995, The Southern Banc Company, Inc.(the "Company")
entered into an Employment Agreement (the "Agreement") with James B. Little, Jr.
(the "Employee"); and

     WHEREAS, the Board of Directors of the Company and the Employee have deter
mined that it is in their respective best interests to amend the Agreement (i)
to improve the change-in-control protections provided thereunder, (ii) to
reflect an extension of the term of his Agreement, and (iii) to make other
adjustments to the Agreement as the interested parties have deemed appropriate;

     NOW, THEREFORE, the Agreement shall be amended as follows, with such
amendment to become effective immediately.

     1.   The first sentence in Section 5 of the Agreement shall be amended by
replacing the words "36 months thereafter" with "August 17, 2000".
 
     2.   The last sentence in Section 6(a) of the Agreement shall be amended by
deleting the following phrase at the end thereof:

     , or be gainfully employed in any other position or job other than as
     provided above

     3.   Section 9 of the Agreement shall be amended by deleting the following
words from its first sentence:

     (which shall only be applicable during the twelve-month period following a
     "Change in Control" as defined in Section 11 hereof)

     4.   The first sentence of Section 9(d)(1) of the Agreement shall be
amended by replacing the words "set forth in Section 11(b) hereof" with the
words "that begins on the date six months before a "Change in Control" (as
defined in Section 11 hereof) and ends on the later of the second annual
anniversary of the Change in Control or the expiration date of this Agreement
(the "Protected Period"),".

     5.   Section 11(a)(1) of the Agreement shall be amended in its entirety to
provide as follows:

          Notwithstanding any provision herein to the contrary, if the
     Employee's employment under this Agreement is terminated by the Company,
     without the Employee's prior written consent and for a reason other than
     Just Cause during the Protected Period, the Employee shall be paid an
     amount equal to the difference between
<PAGE>
 
1997 Amendment
Page 2 of 3

     (i) the product of 2.99 times his "base amount" as defined in Section
     280G(b)(3) of the Internal Revenue Code of 1986, as amended (the "Code")
     and regulations promulgated thereunder, and (ii) the sum of any other
     parachute payments (as defined under Section 280G(b)(2) of the Code) that
     the Employee receives on account of the change in control. Said sum shall
     be paid in the manner set forth in the Employee's Employment Agreement with
     the Association.

     6.   The first sentence of Section 11(b) of the Agreement shall be amended
in its entirety to provide as follows:
 
          Notwithstanding any other provision of this Agreement to the contrary,
     the Employee shall be entitled to collect the severance benefits set forth
     in Section 11(a) hereof in the event that either (i) the Employee
     voluntarily terminates his employment under this Agreement for any reason
     within the 30-day period beginning on the date of a Change in Control, or
     (ii) the Employee voluntarily terminates his employment within ninety (90)
     days following the occurrence of any of the following events, which have
     not been consented to in advance by the Employee in writing and occur
                                                                 ---      
     during the Protected Period: (i) the requirement that the Employee move his
     personal residence, or perform his principal executive functions, more than
     thirty-five (35) miles from his primary office as of the date of the change
     in control; (ii) a material reduction in the Employee's base compensation
     as in effect on the date of the change in control or as the same may be
     increased from time to time; (iii) the failure by the Company to continue
     to provide the Employee with compensation and benefits provided for under
     this Agreement, as the same may be increased from time to time, or with
     benefits substantially similar to those provided to him under any of the
     employee benefit plans in which the Employee now or hereafter becomes a
     participant, or the taking of any action by the Company which would
     directly or indirectly reduce any of such benefits or deprive the Employee
     of any material fringe benefit enjoyed by him at the time of the change in
     control; (iv) the assignment to the Employee of duties and responsibilities
     materially different from those normally associated with his position as
     referenced at Section 1; (v) a failure to elect or reelect the Employee to
     the Board, if the Employee is serving on the Board on the date of the
     change in control; or (vi) a material diminution or reduction in the
     Employee's responsibilities or authority (including reporting
     responsibilities) in connection with his employment with the Company.

     7.   Nothing contained herein shall be held to alter, vary or affect any of
the terms, provisions, or conditions of the Agreement other than as stated
above.
<PAGE>
 
1997 Amendment
Page 3 of 3

     WHEREFORE, the undersigned hereby approve this 1997 Amendment to the
Agreement.

Date of Execution: October ___, 1997

_______________________

JAMES B. LITTLE, JR.

_______________________

THE SOUTHERN BANC COMPANY, INC.

By_____________________________          Attest:_________________________   
    Its Chairman of the Board
                                                      CORPORATE SEAL