<PAGE>


                              UNITED STATES
                     SECURITIES AND EXCHANGE COMMISSION
                         Washington, D. C. 20549

                                FORM 10-K

               ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d)
                  OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended
   December 31, 1996.                         Commission File No. 0-10852

                    SOUTHERN BANCSHARES (N.C.), INC.
          (Exact name of registrant as specified in its charter)

           DELAWARE                                         56-1538087
(State or other jurisdiction of                          (I.R.S. Employer
    incorporation or organization)                     Identification Number)

121 East Main Street                                           28365
Mount Olive, North Carolina                                 (Zip Code)
(Address of Principal Executive offices)

Registrant's Telephone Number,
 including Area Code:                                      (919)  658-7000

Securities registered pursuant to Section 12(b) of the Act:     None

Securities registered pursuant to Section 12(g) of the Act:

           Series B non-cumulative preferred stock, no par value

Indicate by check mark whether the Registrant  (1) has filed all reports
required  to be filed by Section  13 or 15(d) of  the Securities Exchange Act
of 1934 during  the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.

                            Yes    _X__      No ___


Indicate by check mark if disclosure of delinquent filers pursuant  to item
405  of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.

                                   [ X ]

The aggregate market value of the voting stock held by nonaffiliates of the
Registrant as of March 21, 1997:  The Registrant's voting stock has no readily
ascertainable market value as of any date within the last sixty days or
otherwise for the reason that such stock is not regularly traded and has no
quoted prices.  Therefore, the aggregate market value of the voting stock held
by non-affiliates is not determinable.

The number of shares outstanding of the Registrant's common stock as of
March 21, 1997:  Common Stock, $5.00 par value - 119,918 shares

Documents Incorporated by Reference

1. Part II    Registrant's Annual Report to Shareholders

2. Part III   Registrant's Definitive Proxy Statement dated March 21, 1997

<PAGE>

PART I

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 effect 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 ("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.  Refer to
"Related Parties" in Note 15 on page 42 of 1996 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,
1996, Southern is the twelfth largest bank in North Carolina.
<PAGE>
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
40 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 30 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 eighteen automatic teller machines; one each in Ahoskie,
Ayden, Belhaven, Bethel, Edenton, Farmville, LaGrange, Mount Olive,
Murfreesboro, Nashville, Plymouth, Roanoke Rapids, Rocky Mount, Warsaw and
Windsor, North Carolina and two in Kill Devil Hills, 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 two wholly-owned subsidiaries: Goshen, Inc., which acts as
agent for credit life and credit accident and health insurance written in
connection with loans made by Southern, and Goshen Properties, Inc., which
manages property foreclosed upon by Southern.

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.
<PAGE>
     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.
<PAGE>
     As a result of its ownership of a North Carolina-chartered commercial
bank, BancShares also is registered with and subject to regulation by the North
Carolina Commissioner of Banks under the state's bank holding company laws.
The Commissioner has asserted authority to examine North Carolina bank holding
companies and their affiliates and is in the process of formulating regulations
in this area.

     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.
<PAGE>
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.
Effective January 1, 1993, the FDIC adopted a transitional risk-based
assessment schedule which became fully effective in January 1994 and provided
for annual assessment rates ranging from .23 percent to .31 percent of an
institution's average assessment base.  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.
<PAGE>
     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 1997 was set at an annual rate of
6.48 basis points of OAKAR adjusted deposits as defined by the FDIC and 1.296
basis points of BIF adjusted deposits.  At December 31, 1996 the FICO
assessable OAKAR deposit base for Southern was $94 million and the BIF deposit
base was $367 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 $109 thousand for 1997.

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.
<PAGE>
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 also permits interstate branching by allowing a bank to merge with
a bank located in a different state.  A state may accelerate the effective date
for interstate mergers by adopting a law authorizing such transactions prior to
June 1,1997, or it can ``opt out'' and thereby prohibit interstate branching by
enacting legislation to that effect prior to that date.  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.
<PAGE>
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 $100
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.

Employees

     At December 31, 1996, Southern employed 257 full-time employees and 26
part-time employees.  It is not a party to any collective bargaining agreements
and considers relations with its employees to be good.  BancShares, Goshen and
Goshen Properties do not have any separate employees.
<PAGE>

Statistical Information

I.  AVERAGE BALANCE SHEET ITEMS AND NET INTEREST DIFFERENTIAL
    AVERAGE BALANCES AND AVERAGE RATES EARNED AND PAID

<TABLE>
<CAPTION>
(Dollars in thousands, taxable-equivalent)



                                             DECEMBER 31, 1996           DECEMBER 31, 1995                DECEMBER 31, 1994
                                          AVERAGE           AVERAGE   AVERAGE           AVERAGE        AVERAGE           AVERAGE
ASSETS                                    BALANCE  INTEREST   RATE    BALANCE  INTEREST   RATE         BALANCE  INTEREST   RATE
<S>                                      <C>      <C>      <C>       <C>      <C>       <C>            <C>      <C>       <C>
Interest earning assets:                                               
  Loans (1) (2)                          $310,389  $26,878   8.66%    $270,563  $24,338   9.00%        $242,360  $20,943   8.64%
  Taxable investment securities           126,594    7,984   6.31%     105,524    5,382   5.10%          94,772    3,720   3.93%
  Nontaxable investment securities (3)     25,914    2,291   8.84%      25,515    3,582  14.03%          32,722    3,317  10.14%
  Federal funds sold                        6,895      402   5.83%      14,378      810   5.63%           8,812      312   3.54%
                                          _______   ______   ____      _______  _______   ____          _______   ______   _____
     Total interest earning assets        469,792   37,555   7.99%     415,980   34,112   8.20%         378,666   28,292   7.47%
                                                    ______                       ______                           ______

Non-interest earning assets:
  Cash and due from banks                  15,726                       15,381                           12,265
  Premises and equipment, net              13,498                       10,974                            9,561
  Other                                    20,525                       14,164                            7,062
                                           ______                       ______                            _____
    Total assets                         $519,541                     $456,499                         $407,554
                                          =======                      =======                          =======
      

LIABILITIES & EQUITY
Interest bearing liabilities:
  Demand deposits                         $70,443    1,227   1.74%     $59,926    1,262   2.11%         $56,913    1,193   2.10%
  Savings deposits                         83,761    2,202   2.63%      79,486    2,238   2.82%          84,006    2,085   2.48%
  Time deposits                           247,575   13,504   5.45%     217,752   11,910   5.47%         183,405    7,360   4.01%
  Short-term borrowed funds                 8,160      400   4.90%       6,280      336   5.35%           2,424       86   3.55%
  Long-term obligations                     2,021      117   5.79%       3,153      309   9.80%           4,356      320   7.35%
                                          _______   ______   ____      _______   ______   ____          _______    _____   ____
    Total interest bearing liabilities    411,960   17,450   4.24%     366,597   16,055   4.38%         331,104   11,044   3.34%
                                                    ______                       ______                           ______


Non-interest bearing liabilities:
  Demand deposits                          57,773                       50,088                           43,294
  Other                                     9,574                        5,157                            4,711
Shareholders' equity                       40,234                       34,657                           28,445
                                          _______                      _______                          _______
                                              
    Total liabilities and equity         $519,541                     $456,499                         $407,554
                                          =======                      =======                          =======


Interest rate spread (4)                                     3.75%                        3.82%                            4.13%
Net interest earnings and                                    
 Net interest margin (5)                           $20,105   4.28%              $18,057   4.34%                  $17,248   4.55%
                                                   
</TABLE>


(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

<TABLE>
<CAPTION>
                                    
(Dollars in thousands)                                          December 31,1996 Increase(Decrease)
                                    
                                                                     AMOUNT              AMOUNT              AMOUNT
                                                   TOTAL          ATTRIBUTABLE        ATTRIBUTABLE        ATTRIBUTABLE
                                                   CHANGE           TO CHANGE           TO CHANGE         TO CHANGE IN
                                                  1995-1996         IN VOLUME            IN RATE           RATE/VOLUME
<S>                                             <C>               <C>                  <C>               <C>
ASSETS                                   
Interest earning assets:
  Loans, net                                      $2,540              $3,584             ($920)               ($124)
  Taxable investment securities                    2,602               1,075             1,277                  250
  Non-taxable investment securities               (1,291)                 56            (1,327)                 (20)
  Federal funds sold                                (408)               (421)               29                  (16)
                                                   _____                _____             _____                ____
    Total interest income                          3,443                4,294             (941)                  90
                                    
LIABILITIES & EQUITY                                    
Interest bearing liabilities:                                
  Demand deposits                                    (35)                 222             (222)                 (35)
  Savings deposits                                   (36)                 121             (151)                  (6)
  Time deposits                                    1,594                1,631              (44)                   7
  Short-term borrowed funds                           64                  101              (28)                  (9)
  Long-term obligations                             (192)                (111)            (126)                  45
                                                   _____                _____             ____                  ___
    Total interest expense                         1,395                1,964             (571)                   2

Net interest income                               $2,048               $2,330            $(370)                  $88
                                    


                                    
                                                                 December 31, 1995 Increase(Decrease)
                                    
                                                                      AMOUNT              AMOUNT              AMOUNT
                                                 TOTAL             ATTRIBUTABLE        ATTRIBUTABLE        ATTRIBUTABLE
                                                CHANGE               TO CHANGE           TO CHANGE         TO CHANGE IN
                                              1994-1995              IN VOLUME            IN RATE           RATE/VOLUME
ASSETS                                   
Interest earning assets:
  Loans, net                                      $3,395               $2,437             $872                  $86
  Taxable investment securities                    1,662                  423            1,109                  130
  Non-taxable investment securities                  265                 (731)           1,276                 (280)
  Federal funds sold                                 498                  197              184                  117
                                                   _____                _____            _____                 ____
      Total interest income                        5,820                2,326            3,441                   53
                                    
LIABILITIES & EQUITY                                    
Interest bearing liabilities:                                
  Demand deposits                                     69                   63                6                    0
  Savings deposits                                   153                 (112)             286                  (21)
  Time deposits                                    4,550                1,377            2,678                  495
  Short-term borrowed funds                          250                  137               44                   69
  Long-term obligations                              (11)                 (88)             107                  (30)
                                                   _____                _____            _____                 ____
    Total interest expense                         5,011                1,377            3,121                  513

Net interest income                                 $809                 $949             $320                ($460)
                                                    ====                =====            =====                 ====

</TABLE>
III. INVESTMENT PORTFOLIO


The following table sets forth the carrying amount of investment securities
    (dollars in thousands):

<TABLE>
<CAPTION>

                                                                                           December 31,

                                                                                     1996      1995      1994
<S>                                                                                <C>       <C>      <C>
          U.S. Treasury and U.S. Government agencies and corporations               $108,592  $97,612   $78,513
          States and political subdivisions                                           35,086   33,749    29,528
          Other                                                                       25,011   17,445    14,111
                                                                                      ______   ______    ______
                                         
              Total                                                                 $168,689 $148,806  $122,152
                                                                                     =======  =======   =======

</TABLE>

     The following table sets forth the maturities of investment securities at
December 31, 1996 (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.)
<TABLE>
<CAPTION>

                                                                              Maturing
                                              
                                                                After One But        After Five But
                                          Within One Year     Within Five Years     Within Ten Years      After Ten Years
                                          Amount    Yield     Amount      Yield     Amount     Yield      Amount    Yield
<S>                                    <C>       <C>       <C>        <C>         <C>       <C>        <C>       <C>
U.S. Treasury and other
  U.S. Government agencies (1)           $59,978    6.01%     $46,455      5.74%      -          -        $2,125    6.46%
States and political subdivisions          7,999    6.49%       8,359      7.03%     9,271     6.34%       9,181    5.46%
Other (2)                                  8,712    5.22%        -           -        -          -           100    6.75%
                                          ______    ____       ______      ____     ______     _____       _____    ____
                                         $76,689    5.97%     $54,814      5.94%    $9,271     6.34%      $11,406   5.65%
                                          ======               ======                =====                 ======
</TABLE>

(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):

<TABLE>
<CAPTION>                                                                                   December 31,
                                                                         1996       1995       1994        1993       1992
<S>                                                                   <C>        <C>        <C>         <C>        <C>
Commercial, financial, and agricultural                                 $70,881    $57,398    $29,267     $23,672    $24,146
Real estate - construction                                                2,470      1,533      9,374       1,851      1,321
Real estate - mortgage                                                  206,870    189,315    174,694     181,060     93,337
Consumer                                                                 35,512     37,548     38,004      30,149     26,397
Lease Financing                                                           2,370      2,410      1,447         -          -
                                                                        _______    _______     ______      ______     ______
                                                                        318,103    288,204    252,786     236,732    145,201
Less: unearned income                                                      (348)      (244)      (175)        -          -
                                                                        _______    _______    _______     _______    _______
                                                                       $317,755   $287,960   $252,611    $236,732    $145,201
                                                                        =======    =======    =======     =======     =======

</TABLE>

The following table identifies the maturities of all loans as of December 31,
   1996 and addresses the sensitivity of these loans to changes in interest
   rates.

<TABLE>
<CAPTION>



                                                               Within        After One Year But        After Five        Total
                                                              One Year       Within Five Years           Years

                                                               _________      ________________          _________      _________
<S>                                                           <C>          <C>                      <C>            <C>
Commercial and financial                                      $  33,070         $   25,344              $ 12,467      $   70,881
Real estate:
  Construction                                                    1,137              1,150                   183           2,470
  Mortgage                                                       59,694             98,064                49,112         206,870
Consumer                                                         23,964             10,740                   808          35,512
Lease Financing                                                     378              1,217                   427           2,022
                                                               _________         _________             _________        _________
        Total                                                  $118,243          $ 136,515              $ 62,997       $ 317,755
                                                               =========         =========             =========        =========
Fixed rate                                                    $  43,508          $ 104,370               $39,175        $187,053
Variable rate                                                    74,735             32,145                23,822         130,702
                                                               _________         _________             _________        _________
       Total                                                   $118,243          $ 136,515              $ 62,997       $ 317,755
                                                               =========         =========             =========        =========
</TABLE>

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.

<TABLE>
<CAPTION>


                                                          December 31,
                                                                       
                                                       1996           1995           1994           1993           1992
<S>                                                 <C>            <C>            <C>           <C>            <C>
Non-accrual loans                                  $    147       $     50     $       77     $       44        $     -
Restructured loans                                        8             -             204            221             240
Accruing loans past-due 90 days or more                 343            508            234            190             148
                                                       _____         _____          _____          _____           _____
  Total non-performing loans                       $    498       $    558     $      515     $      455        $    388
Other real estate owned                                  -              86          1,339          1,020             204
                                                       _____         _____          _____          _____           _____
  Total non-performing loans and assets            $    498       $    644     $    1,854     $    1,475        $    592
                                                       =====         =====          =====          =====           =====

</TABLE>

     The amount of interest which would have been recorded in 1996, 1995 and
1994 on non-accrual and restructured 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):

<TABLE>
<CAPTION>

                                                                                           December 31,
                               
                                                                           1996      1995      1994      1993      1992
<S>                                                                    <C>        <C>      <C>       <C>      <C>
Allowance for possible loan losses - beginning of year                   $ 6,321   $ 6,653   $ 6,717   $ 3,553   $ 3,054
                                 
Charge-offs:
  Commercial, financial, and agricultural                                      5       -          90        10       142
  Real estate - construction                                                 -         -         -          -         -
  Real estate - mortgage                                                     106       242        26       381        -
  Installment                                                                428       220       181       358       242
  Lease Financing                                                             -         -         -          -         -
                                                                            _____    _____     _____     _____     _____
     Total charge-offs                                                       539       462       297       749       384
                                                                            _____    _____     _____     _____     _____
Recoveries:
  Commercial, financial, and agricultural                                      -        54        63        74        19
  Real estate - construction                                                  19       -         -          -         -
  Real estate - mortgage                                                     131        18        29        56       195
  Installment                                                                 91        58       141       126        69
  Lease Financing                                                              -       -         -          -         -
                                                                           _____    _____     _____     _____      _____
     Total recoveries                                                        241       130       233       256       283

Net charge-offs (recoveries)                                                 298       332        64       493       101
Additions charged to operations                                              140       -         -         300       600
Addition from Citizens Savings Bank                                            -       -         -       3,357         -
                                                                           _____     _____     _____     _____     _____
Allowance for possible loan losses - end of year                         $ 6,163   $ 6,321   $ 6,653   $ 6,717   $ 3,553


                                                                           =====     =====     =====     =====     =====
Average loans outstanding during the year                               $310,389  $270,563  $242,360  $191,653  $140,156
                                                                         =======   =======   =======   =======   =======
Ratio of net charge-offs (recoveries) to average loans outstanding        0.10%     0.12%     0.03%     0.26%     0.07%
</TABLE>
             
     The allowances for possible 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 and independent external evaluation of the loan portfolio, as well
as prevailing and anticipated economic conditions.


Allocation of the allowance for possible 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:
<TABLE>
<CAPTION>

                                                                    December 31,
                                               
                                   1996                 1995                 1994                 1993                 1992
                                    % of loans           % of loans           % of loans           % of loans           % of loans
                                     in each             in each               in each              in each              in each
                                   category to          category to          category to          category to          category to
                           Amount  total loans  Amount  total loans  Amount  total loans  Amount  total loans  Amount  total loans
<S>                    <C>       <C>           <C>    <C>            <C>    <C>         <C>     <C>          <C>      <C>
Commercial, financial
     and agricultural      $2,214         22%   $1,264       20%     $774        12%      $672        10%      $591        17%
Real estate - construction     76          1%       63        1%      247         4%        53         1%        32         1%
Real estate - mortgage      2,263         65%    3,709       65%    4,611        69%     5,137        76%     2,284        64%
Consumer                    1,537         11%    1,222       13%    1,021        15%       855        13%       646        18%
Lease Financing                73          1%       63        1%      -           -        -          -         -          -
                            _____        ___     _____      ___     _____       ___      _____       ___      _____       ___
                            6,163        100%   $6,321      100%   $6,653       100%    $6,717       100%    $3,553       100%
                            =====        ===     =====      ===     =====       ===      =====       ===      =====       ===

</TABLE>


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):

<TABLE>
<CAPTION>

                                               1996               1995                1994
                                        Average   Average   Average   Average   Average   Average
                                        Balances   Rates    Balances   Rates    Balances   Rates
<S>                                   <C>        <C>     <C>        <C>       <C>       <C>
Non-interest bearing demand             $57,773      -     $50,088       -      $43,294     -
Interest bearing demand                  70,443    1.74%    59,926     2.11%     56,913    2.10%
Savings                                  83,761    2.63%    79,486     2.82%     84,006    2.48%
Time deposits                           247,575    5.45%   217,752     5.47%    183,405    4.01%
                                        _______            _______              ______
   Total deposits                      $459,552           $407,252             $367,618
                                        =======            =======              ======
</TABLE>


     Maturities of time certificates of deposit of $100,000,  or more, at
December 31, 1996 are summarized as follows (dollars in thousands):

<TABLE>
<CATEGORY>

Maturity Category
<S>                                          <C>
Three months or less                             $14,102
Over three through six months                     10,123
Over six months through twelve months             13,404 
Over one year through five years                   7,584
Over five years                                      353
                                                 _______
                                                 $45,566
                                                 =======

</TABLE>

VII.  RETURN ON EQUITY AND ASSETS
                     
The following table presents certain ratios of BancShares:

<TABLE>
<CAPTION>                                                                          December 31,
                     
                                                                           1996       1995       1994
<S>                                                                     <C>        <C>       <C>
Return on assets (net income divided by average total assets)              0.84%      0.86%      0.90%

Return on equity - including Series C preferred
   (net income divided by average total equity)                           10.85%     11.29%     12.97%

Dividend payout ratio
   (Dividends declared per share divided by net income per share)         13.45%     13.57%     12.80%

Equity to assets ratio - including Series C preferred
   (Average equity divided by average total assets)                        7.74%      7.59%      6.98%

</TABLE>

VIII.  CAPITAL ADEQUACY
                          
The following table presents certain calculations of capital and related
ratios:

<TABLE>
<CAPTION>

                                                     December  31,
(Dollars in thousands)
                                               1996       1995        1994
<S>                                      <C>        <C>        <C>
 Total Shareholders' Equity                  $44,778    $37,163     $30,965
 Leverage Capital                             27,891     23,369      20,129
 Tier I Capital                               27,891     23,369      20,129
 Total Capital                                31,861     26,819      23,021

 Leverage Capital Ratio (1)                    5.46%      5.60%       5.20%
 Tier I Capital Ratio                          9.33%      8.92%       9.08%
 Total Capital Ratio (2)                      10.66%     10.24%      10.39%

 </TABLE>

(1) Financial institutions 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. Financial
    institutions 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
                          
<TABLE>
<CAPTION>

                                                                    December  31,
                          
                                                               1996      1995       1994
<S>                                                       <C>       <C>         <C>
Return on average assets (based on net income)                 0.84%     0.86%      0.90%

Average equity as a percentage of total average assets         7.74%     7.59%      6.98%

Return on average equity                                      10.85%    11.29%     12.97%
   (Return on average assets ratio divided by average 
    equity ratio)

Earnings retention                                            86.55%    86.43%     87.20%
   (Net income less dividends divided by net income)

Rate of internal capital generation                            9.39%     9.76%     11.31%
   (Return on average equity ratio times earnings 
    retention ratio)

</TABLE>


X.  INTEREST RATE SENSITIVITY ANALYSIS
                                                        
<TABLE>
<CAPTION>

(Dollars in Thousands)


                                                                                  December 31, 1996
                                                                                                              Non-Rate
                                                     1-30           31-90         91-180         181-365      Sensitive
                                                     Days            Days          Days           Days         & Over
                                                   Sensitive      Sensitive      Sensitive      Sensitive      1 Year      Total
<S>                                              <C>            <C>            <C>            <C>           <C>         <C>
Earning Assets:
Loans, net of unearned income                      $81,398        $65,932        $14,646        $29,869    $125,910       $317,755
Investment Securities                               31,925         10,515         15,252         41,326      69,671        168,689
Temporary Investments                               11,020           -              -              -           -            11,020
                                                   _______         ______         ______         ______     _______        _______
Total earning assets                              $124,343        $76,447        $29,898        $71,195    $195,581       $497,464
                                                   =======         ======         ======         ======     =======        =======


Interest-Bearing Liabilities:
Savings and core time deposits                    $187,985        $34,470        $51,216        $55,718    $105,611       $435,000
Time deposits of $100,000 and more                   5,492          8,610         10,122         13,405       7,937         45,566
Short-term borrowing                                 5,064            -              -              -           -            5,064
Long-term obligations                                1,400            -              -              -           -            1,400
                                                    ______         ______         ______         ______     _______        _______
Total interest bearing liabilites                 $199,941        $43,080        $61,338        $69,123    $113,548       $487,030
                                                   =======         ======         ======         ======     =======        =======
Other uses - net                                      -              -               -              -        10,434         10,434
Total uses - net                                  $199,941        $43,080        $61,338        $69,123    $123,982       $497,464
                                                   =======         ======         ======         ======     =======

Interest sensitive Gap                             (75,598)        33,367        (31,440)         2,072      71,599
Cumulative Interest Sensitive Gap                  (75,598)       (42,231)       (73,671)       (71,599)

Interest Sensitive Gap To Total Assets              14.14%          6.24%          -5.88%         0.39%      13.39%
Cumulative Interest Sensitive Gap To Total Assets  -14.14%         -7.90%         -13.78%       -13.39%        -

</TABLE>

Interest sensitivity is continually changing. The table above reflects
Bancshares' gap position at December 31, 1996 and does not necessarily
represent its position on any other dates.


XII.  SHORT-TERM BORROWINGS

<TABLE>
<CAPTION>

                                                           (Dollars in Thousands)
                                                        1996                    1995
                                                  Amount    Rate           Amount    Rate
<S>                                           <C>       <C>           <C>        <C>
Repurchase Agreements
          At December 31                          $3,838    4.22%          $1,081    4.37%
          Average during year                      2,934    4.04%           1,333    4.58%
          Maximum month-end balance during year    4,507                    1,773

U.S. Treasury tax and loan accounts
          At December 31                          $1,226     4.77%            388    4.41%
          Average during year                      1,052     5.09%          1,125    4.12%
          Maximum month-end balance during year    1,300                    2,888

</TABLE>

ITEM 2 - PROPERTIES

     BancShares does not own or lease any real property.  Except for five
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, 1996 there were 40 Southern offices in North
Carolina.  These offices are listed in BancShares' 1996 Annual Report.

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 -  SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS:

          None.
<PAGE>

PART II

ITEM 5 - MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED SHAREHOLDER
         MATTERS:

         Information is incorporated herein by reference from pages 15 and 16
of the Registrant's 1996 Annual Report.

ITEM 6 - SELECTED FINANCIAL DATA:

         Information is incorporated herein by reference from Table 1,
Five-Year Financial Summary, Selected Average Balances and Ratios, on page 3
of Registrant's 1996 Annual Report.

<PAGE>
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS:

         Information is incorporated herein by reference from pages 3 through
15 of Registrant's 1996 Annual Report.

ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA:

         The following financial statements, independent auditors' report and
supplementary data are incorporated herein by reference, from the page numbers
indicated, in Registrant's 1996 Annual Report.

         Independent Auditors' Report                                      17

         Consolidated Balance Sheets as of December 31, 1996 and 1995      18

         Consolidated Statements of Income for the years ended
         December 31, 1996, 1995 and 1994                                  19

         Consolidated Statements of Cash Flows for the years ended
         December 31, 1996, 1995 and 1994                                  20

         Consolidated Statements of Changes in Shareholders' Equity
         for the years ended 1996, 1995 and 1994                           21

         Notes To Consolidated Financial Statements                     22-42

         Supplementary Data                                                16

         The Independent Auditors' Report on the Consolidated Statements of
         Income, Cash Flows and Changes in Shareholders' Equity for the
         year ended December 31, 1994 is included in exhibit 99.2 and is
         incorporated herein by reference.


ITEM 9 - CHANGE IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURES:

         Previously reported by Form 8-K,  dated January 18, 1995 filed
January 24, 1995, as amended by Form 8-K/A 1 dated January 31, 1995 and Form
8-K/A 2 dated April 6, 1995.

<PAGE>

PART III

ITEM 10 -  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT:

     The information  under the  captions "PROPOSAL 1: ELECTION OF DIRECTORS"
and ``Executive Officers'' on pages 6 through 7 and page 10 of Registrant's
definitive Proxy Statement dated March 21, 1997, is incorporated herein by
reference.

ITEM 11 - EXECUTIVE COMPENSATION:

     The information under the captions "Compensation  of Directors",
"Compensation Committee Interlocks and Insider  Participation", "Executive
Compensation", "Pension Plan", and "Employment Contracts, Termination of
Employment and Change-in-Control Arrangements" on page 8 and  pages 11-12 of
the Registrant's definitive Proxy Statement dated March 21, 1997, is
incorporated herein by reference.

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 21,
1997,  is incorporated herein by reference.

ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS:

     The information contained in  "Transactions with Management" on page 14
of the Registrant's definitive Proxy Statement dated March 21, 1997, is
incorporated herein by reference.


PART IV

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 theron, are incorporated herein by reference from
            Registrant's 1996 Annual Report to Shareholders.

            .  Independent Auditors' Report

            .  Consolidated Balance Sheets at December 31, 1996 and 1995

            .  Consolidated Statements of Income for the years ended December
               31, 1996, 1995 and 1994

            .  Consolidated Statements of Cash Flows for the years ended
               December 31, 1996, 1995 and 1994

            .  Consolidated Statements of Changes in Shareholders' equity for
               the years ended December 31, 1996, 1995 and 1994

            .  Notes to Consolidated Financial Statements


             The Independent Auditors' Report on the Consolidated Statements of
             Income, Cash Flows and Changes in Shareholders' Equity for the
             year ended December 31, 1994 is included in Exhibit 99.2 and is
             incorporated herein by reference.

         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 1996 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*      Seventh 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 1996 Annual Report to Shareholders (filed
                       herewith)

            22         Subsidiaries of the Registrant (filed herewith)

            99.1**     Registrant's definitive Proxy Statement dated March 21,
                       1997 for the 1997 Annual Shareholders' Meeting

            99.2       Independent Auditors' Report of Price Waterhouse LLP
                       (filed herewith)



     (b)    Reports on Form 8-K


            No reports on Form 8-K were filed for the fourth quarter of the
            year ended December 31, 1996.

 *     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 21, 1997 SOUTHERN  BANCSHARES  (N.C.),  INC.

                         /s/ R. S. Williams
                    By:  ____________________________________________________
                         R. S. Williams, President and 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 21, 1997
R. S. Williams         Directors and President

/s/David A. Bean      Treasurer (principal         March 21, 1997
David A. Bean         financial and accounting
                      officer)

                            Director
Bynum R. Brown

/s/William H. Bryan         Director               March 21, 1997
William H. Bryan

/s/D. Hugh Carlton          Director               March 27, 1997
D. Hugh Carlton

/s/Robert J. Carroll        Director               March 25, 1997
Robert J. Carroll

/s/Hope H. Connell          Director               March 24, 1997
Hope H. Connell

/s/J. Edwin Drew            Director               March 26, 1997
J. Edwin Drew

/s/Moses B. Gillam, Jr      Director               March 25, 1997
Moses B. Gillam, Jr.

/s/Leroy C. Hand, Jr.       Director               March 26, 1997
LeRoy C. Hand, Jr.

/s/Frank B. Holding         Director               March 21, 1997
Frank B. Holding

/s/M. J. McSorley           Director               March 21, 1997
M. J. McSorley

/s/W. B. Midyette, Jr.      Director               March 27, 1997
W. B. Midyette, Jr.

/s/W. Hunter Morgan         Director               March 25, 1997
W. Hunter Morgan

/s/Charles I. Pierce        Director               March 25, 1997
Charles I. Pierce, Sr.

/s/W. A. Potts              Director               March 21, 1997
W. A. Potts

/s/Charles L. Revelle, Jr.  Director               March 28, 1997
Charles L. Revelle, Jr.

/s/ Charles O. Sykes        Director               March 21, 1997
Charles O. Sykes

/s/John N. Walker           Director               March 21, 1997
John N. Walker