<PAGE>   1
 

                       SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D. C. 20549

                                   FORM 10-K

(Mark One)
[XX]     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
         EXCHANGE ACT OF 1934
                  For the fiscal year ended December 31, 1996
                                                             OR
[  ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
         EXCHANGE ACT OF 1934
                  For the transition period from        to
                                                 -----     -----
 
Commission File Number  1-5846
                        ------
                            THE LIBERTY CORPORATION
------------------------------------------------------------------------------
             (Exact name of Registrant as specified in its charter)

      South Carolina                                           57-0507055
------------------------------                             -------------------
(State or other jurisdiction of                            (I.R.S. Employer
incorporation or organization)                             Identification No.)

      Post Office Box 789, Wade Hampton Boulevard, Greenville, S. C. 29602
------------------------------------------------------------------------------
              (Address of principal executive offices) (Zip Code)

          Registrant's telephone number, including area code    (864) 609-8256
                                                                --------------

Securities registered pursuant to Section 12(b) of the Act:
                                                                          
<TABLE>
<CAPTION>                                                                                 Name of Each Exchange
            Title of Each Class                                                            on Which Registered
------------------------------------                                                    -------------------------
<S>                                                                                     <C>
Common Stock, no par value per share                                                    New York Stock Exchange
Rights to Purchase Series A Participating Cumulative Preferred Stock                    New York Stock Exchange
</TABLE>

         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 the
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 non-affiliates
of the Registrant as of March 15, 1997:

      Common Stock, No Par Value                            $875,806,661
      --------------------------                            ------------

        The number of shares outstanding of each of Registrant's classes of
common stock as of March 15, 1997:

      Common Stock, No Par Value                              20,249,865
      --------------------------                              -----------

DOCUMENTS INCORPORATED BY REFERENCE

         Portions of The Liberty Corporation Annual Report to Shareholders for
the year ended December 31, 1996 are incorporated into Part II, Items 5, 6, 7,
and 8 by reference.

         Portions of The Liberty Corporation Proxy Statement for the Annual
Meeting of Shareholders on May 6, 1997 are incorporated into Part III, Items
10, 11, 12, and 13 by reference.

         This report is comprised of pages 1 through 86. The exhibit index is
on page 27.


<PAGE>   2


                                     PART I

ITEM 1.       BUSINESS

GENERAL
     The Registrant, The Liberty Corporation ("Liberty" or "the Company") is a
holding company engaged through its subsidiaries primarily in the life
insurance and television broadcasting businesses.

     The Company's primary insurance subsidiaries are Liberty Life Insurance
Company ("Liberty Life") and Pierce National Life Insurance Company ("Pierce
National"). In addition to Liberty Life and Pierce National, Liberty Insurance
Services Corporation ("Liberty Insurance Services") provides home office
support services for the Company's insurance operations as well as unaffiliated
life and health insurance companies. Other subsidiaries of the Company provide
investment advisory services to the Company's insurance subsidiaries and
unaffiliated insurance companies, and property development and management
services to the Company.

     The Company's television broadcasting subsidiary, Cosmos Broadcasting
Corporation ("Cosmos"), currently owns and operates eight network affiliated
television stations.

     Additional information concerning Liberty's subsidiaries and divisions is
included in "Management's Discussion and Analysis" in the Company's 1996 Annual
Report to Shareholders, which is incorporated herein by reference.

STRATEGY; RECENT DEVELOPMENTS

     The Company's principal strategy is to grow internally and through
selective acquisitions, while maintaining its emphasis on cost controls. The
Company's operations are generally focused in niche markets where Liberty
believes it has the products and expertise to serve the market better than its
competitors.

     Prior to 1995, the Company had an aggressive acquisition policy focused on
both home service (agency) and pre-need businesses. While the Company has not
completed any insurance acquisitions since 1994, Liberty will continue to
consider acquisitions that complement or fit with the Company's existing
marketing divisions and product lines. The Agency Home Service division
represents the Company's primary core business, whereas the pre-need business
is a relatively new line of business for the Company. The Company largely
entered the pre-need business with the acquisition of Pierce National in July
1992. Two acquisitions during 1994 significantly strengthened the Company's
market position in the pre-need market, which provides life insurance products
to pre-fund funeral services. The Company believes that the pre-need business
has favorable demographics which can provide attractive future premium and
earnings growth. During 1995, the Company completed the consolidation of all of
the acquired pre-need companies into Pierce National.

     Management's philosophy regarding broadcasting acquisitions is to make
selective acquisitions in local markets where it can be among the dominant
television stations.

     During 1996, Liberty decided to de-emphasize its real estate investments,
particularly as related to its business rental properties and land held for
future business park development. In March, 1997 Liberty announced it had
signed a contract to contribute substantially all of its business rental
properties to a real estate investment trust in exchange for shares of the
trust and cash. Additionally, the real estate investment trust agreed to
acquire most of Liberty's business park land development projects over a 10
year period. The transaction is expected to close around April 30, 1997 and
will result in a pre-tax gain. Cash received from the transaction is expected
to be used to initially repay debt.

     The following page summarizes the Company's acquisitions since 1992.





                                       2
<PAGE>   3






<TABLE>
                                                                                                      Annual Premiums
    INSURANCE ACQUISITIONS                                                        Date                   Acquired
    ----------------------------------------------------------------------------------------------------------------------
    <S>                                                                            <C>                 <C>
    Acquisition of Pierce National Life Insurance Company, a                       July 1992           $31 million (1)        
    California based provider of pre-need life insurance                                               (includes $6 million of 
                                                                                                       single pay premiums)


    Acquisition of Magnolia Financial Corporation and its subsidiary,              October 1992        $15 million (1)
    Magnolia Life Insurance Company, a Louisiana based provider of
    primarily home service life insurance                                             



    Acquisition of assets and block of insurance business from Estate              April 1993          $7 million (2)
    Assurance Company, a Louisiana based provider of pre-need life                                     (includes $6 million
    insurance                                                                                          of single pay premiums)



    Acquisition of North American National Corporation and its                     February 1994       $24 million (3)
    subsidiaries, an Ohio based holding company with insurance                                         (includes $5 million of 
    subsidiaries based in Ohio, Colorado and South Dakota that                                         single pay premiums) 
    provide primarily pre-need and other ordinary life insurance and          
    accident and health insurance    
                                                                                                                  

    Acquisition of American Funeral Assurance Company, a Mississippi               February 1994       $59 million (3)      
    based provider of primarily pre-need life insurance                                                (includes $44 million    
                                                                                                       of single pay premiums)  
                                                                                                                           


    Acquisition of State National Capital Corporation and its                      April 1994          $10 million (3) 
    subsidiaries, a Louisiana based provider of primarily home
    service life insurance                                                                                        
</TABLE>



(1)  Represents amount of annualized premiums acquired at the time of
     acquisition.
(2)  Represents amount of annual premiums reported by the selling company in
     its 1992 annual financial statements filed under applicable statutory
     requirements.
(3)  Represents amount of annual premiums reported by the selling company in
     its 1993 annual financial statements filed under applicable statutory
     requirements.


BROADCASTING ACQUISITION

     On February 28, 1995, the Company completed the acquisition of WLOX-TV in
Biloxi, Mississippi, bringing to eight the total number of television stations
in Cosmos. The purchase price of $40.1 million was funded with a combination of
redeemable preferred stock, cash and a note payable. WLOX is an ABC affiliate
that carries strong local news and is the top station in its market.




                                       3
<PAGE>   4



INSURANCE OPERATIONS

     LIBERTY LIFE. Liberty Life is a stock life insurance company engaged in
the business of writing a broad range of individual life insurance policies and
accident and health insurance policies. While Liberty Life is licensed in
forty-nine states, and the District of Columbia, its focus has been the
Southeast. For 1996, the largest percentages of its premium income were from
South Carolina (26%), North Carolina (21%), Louisiana (9%) and Florida (4%).
The Company believes that Liberty Life is the largest provider of home service
business in the Carolinas.

     Life insurance and annuity premiums contributed 77% of Liberty Life's
total premiums in 1996, 84% in 1995 and 83% in 1994. Accident and health
insurance premiums contributed the remainder.

     In 1994, the Company decided to cease sales of its products through its
general agency distribution system due to the absence of critical volume.
Premiums and policy charges from the general agency division represented
approximately 2% of the Company's total premiums and policy charges when the
decision to cease sales in this division was made.

     Liberty Life continues to market its insurance products through its Agency
Home Service and Mortgage Protection divisions. At December 31, 1996, Liberty
Life had approximately 470 employees in its home office in Greenville.

     AGENCY HOME SERVICE DIVISION. The Agency Home Service Division is Liberty
Life's largest division, contributing 64% of Liberty Life's premiums in 1996.
Agency Home Service agents of Liberty Life sell primarily individual life,
including universal life and interest-sensitive whole life products, as well as
health insurance. As of December 1996, the Company had approximately 1,350
agents, managers and support staff in this division operating out of 52
district offices. These agents periodically visit the insureds' homes and
businesses to collect premiums. Although the Company has broadened this
division's area of concentration beyond the Carolinas, principally through
strategic acquisitions, the Company has maintained a regional focus for its
home service business in the Southeast.

     MORTGAGE PROTECTION DIVISION. The Mortgage Protection Division contributed
32% of Liberty Life's premiums in 1996. The Mortgage Protection Division sells
decreasing term life, accident and disability insurance designed to extinguish
the unpaid portion of a residential mortgage upon the death or disability of
the insured. A staff of full-time representatives and independent brokers offer
these products through more than 1,000 financial institutions located
throughout the United States. The Company supports the marketing of these
products through direct mail and phone solicitations.

     PIERCE NATIONAL. Pierce National (doing business as FamilySide) provides
life insurance products which pre-fund funeral services, referred to as
pre-need policies. Pierce National, a stock life insurance company acquired in
July 1992, is domiciled in California, but its principal executive and
administrative offices are in Greenville, South Carolina. Pre-need policies
consist primarily of ordinary life insurance policies for which the premiums
are paid in a single payment at the outset or primarily over a three, five or
ten-year period. In April 1993, Pierce National acquired through coinsurance
all of the ordinary life insurance, representing pre-need life insurance, of
Estate Assurance Company, effective as of January 1, 1993. In 1994, Liberty
acquired North American National Corporation, an insurance holding company, and
American Funeral. As previously mentioned, the insurance subsidiaries of North
American and American Funeral were merged into Pierce National during 1995.

     Pierce National is currently licensed in forty-two states, the District of
Columbia, and ten Canadian provinces. The largest percentages of premium income
for 1996 came from Canada (15%), Mississippi (11%) and California (11%).



                                       4
<PAGE>   5

     At December 31, 1996, Pierce National employed approximately 50 people who
perform marketing, administrative and clerical duties. Policy administration
for Pierce National is performed by Liberty Insurance Services.

     PREMIUM BREAKDOWN. The following table sets forth the insurance premiums
and policy charges for Liberty Life's marketing and distribution divisions and
Pierce National for the years ended December 31.

<TABLE>
<CAPTION>
(In 000's)                                                            1996              1995              1994
---------------------------------------------------------------------------------------------------------------
<S>                                                                 <C>              <C>               <C>     
 Liberty Life
   Home Service                                                     $137,930         $138,714          $136,187
   Mortgage Protection                                                70,316           53,105            49,985
   General Agency Marketing                                            4,881            5,966             6,143
   Other                                                               3,591            3,235             1,384
---------------------------------------------------------------------------------------------------------------
                                                                     216,718          201,020           193,699

 Pierce National                                                     104,653          130,350           122,090
---------------------------------------------------------------------------------------------------------------
 Total                                                              $321,371         $331,370          $315,789
---------------------------------------------------------------------------------------------------------------
</TABLE>

     UNDERWRITING PRACTICES. Liberty Life's underwriting practices for ordinary
life insurance require medical examinations for applicants over age 60 or for
policies in excess of certain prescribed face amounts. In accordance with the
general practice in the life insurance industry, Liberty Life writes life
insurance on substandard risks at increased premium rates. Generally, home
service life insurance for non-universal life products is written for amounts
under $5,000 and typically no medical examination is required. Mortgage
protection life insurance is usually written without medical examination.
Substantially all pre-need policies are written for amounts under $5,000, and
no medical examination is required unless the applicant requests a preferred
rate.

     REINSURANCE. The Company's insurance subsidiaries use reinsurance in two
distinct ways: first, as a risk management tool in the normal course of
business and second, in isolated strategic transactions to effectively buy or
sell blocks of in force business. The Company has ceded $4.1 billion (20%) of
its $20.7 billion insurance in force to other companies; however, the Company's
insurance subsidiaries remain liable with respect to reinsurance ceded should
any reinsurer be unable to meet the obligations it has or will assume.

     For the years ended December 31, 1996, 1995, and 1994, Liberty had ceded
life insurance premiums of $27.3 million, $27.8 million, and $26.4 million,
respectively. Accident and health premiums ceded made up the remainder of ceded
premiums which were $9.2 million, $6.9 million, and $3.7 million for the years
ended December 31, 1996, 1995 and 1994, respectively.

     RISK MANAGEMENT REINSURANCE TRANSACTIONS. Liberty Life reinsures with
other insurance companies portions of the life insurance it writes in order to
limit its exposure on large or substandard risks. The maximum amount of life
insurance that Liberty Life will retain on any life is $300,000, plus an
additional $50,000 in the event of accidental death. This maximum is reduced
for higher ages and for special classes of risks. The maximum amount of life
insurance Pierce National will retain on any life is $50,000. Insurance in
excess of the retention limit is either automatically ceded under reinsurance
agreements or is reinsured on an individually agreed basis with other insurance
companies. Liberty Life has ceded a significant portion of its risks on
accidental death and disability coverage to other insurance companies. Liberty
Life and Pierce National also have coverage for catastrophic accidents. At
December 31, 1996, Liberty Life and Pierce National had ceded, in the normal
course of business, portions of their risks to a number of other insurance
companies.

     STRATEGIC REINSURANCE TRANSACTIONS. In 1991, 80% or $3.2 billion face
amount of Liberty Life's General Agency Marketing Division net insurance in
force was coinsured with Life Reassurance Corporation ("Life Re"). The original
agreement with Life Re provided for the coinsurance of 50% of this division's
insurance in force issued after 1991. Effective July 1, 1995, the amount
coinsured on policies written after December 31, 1991, was increased to 80%.
The 




                                       5
<PAGE>   6

total face value of amounts ceded to Life Re at December 31, 1996 was $2.6
billion. Under terms of the agreement, assets supporting the business ceded are
required to be held in escrow.

     In order to facilitate the 1991 acquisition through reinsurance of a block
of business from Kentucky Central Life Insurance Company, Liberty Life
coinsured 50% of its home service traditional life insurance business with
Lincoln National Life Reinsurance Company. The Lincoln National reinsurance has
been accounted for under generally accepted accounting principles as financial
reinsurance. The reinsurance contract contains an escrow agreement that
requires assets equal to the reserves reinsured, as determined under statutory
accounting principles, be held in escrow for the benefit of this block of
business.

     The Company uses assumption reinsurance to effectively acquire blocks of
in force business by acting as the "reinsurer" for other insurance companies.
For instance, the Company acquired the Kentucky Central and Estate Assurance
blocks in this manner.

     OPERATIONS. The administrative functions of underwriting and issuing new
policies, and the ongoing servicing and claims settlement of in force policies,
are provided by Liberty Insurance Services at the home office in Greenville,
South Carolina. The Company's strategy is to consolidate the administrative
functions of its operations in order to have a unified service platform across
the business units and improve operating leverage through productivity
improvements.

     Liberty Insurance Services provides administrative support services for
Liberty's approximately 2.6 million policies representing $20.7 billion of life
insurance in force, of which $4.1 billion of insurance in force has been ceded
to other companies. Approximately 158,000 policies representing $2.8 billion of
life insurance in force were issued during 1996. The Company intends to
continue its focus on reducing the unit costs of administrative services by
increasing the volume of business through acquisitions of blocks of business
similar in nature to its existing business, by internal growth in those
businesses, and by investing in technology to further improve efficiency in its
operations.

     LIBERTY INSURANCE SERVICES. Liberty Insurance Services provides a wide
range of home office support services to the Company's insurance subsidiaries,
as well as for unaffiliated life and health insurance companies on a fee basis.
These services include underwriting, issuance of policies, accounting, customer
service and claims processing and adjudication and can be tailored to support
the special features of insurance products offered by other companies that
desire these services. In marketing to unaffiliated life and health insurance
companies the Company's strategy is to target (i) insurance companies that have
closed blocks of business that are expensive to administer, (ii) insurance
companies that have start-up or new product lines requiring new support levels,
(iii) small to midsize insurance companies that cannot justify large
investments in home office technology, and (iv) insurance companies acquired by
financial investors lacking experience in providing home office support.
Liberty Insurance Services believes that its economies of scale will permit its
customers to reduce their home office support costs and focus resources on
marketing their insurance products.

     INSURANCE COMPETITION AND RATINGS The Company's insurance subsidiaries
compete with numerous United States and Canadian insurance companies, some of
which have greater financial resources, broader product lines and larger
staffs. In addition, banks and savings and loan associations in some
jurisdictions compete with the Company's insurance subsidiaries for sales of
life insurance products, and the insurance subsidiaries compete with banks,
investment advisors, mutual funds and other financial entities to attract
investment funds generally.

     Competition in the home service business is largely regional or local,
highly dependent on the quality of the local management, and is less price
competitive than other insurance markets. The home service business involves
frequent contacts by agents with their customers. Liberty emphasizes to its
agents the importance of taking advantage of these contacts to establish
personal relationships which the Company believes add stability to its home
service business.

     The Company believes that competition in the pre-need market is national
and, therefore, has expanded the market of its pre-need business. The Company
intends to capitalize on its affinity marketing expertise gained in the
mortgage protection insurance business by targeting national chains of funeral
homes and by supplementing this effort with direct marketing and telemarketing
campaigns. The Company currently believes that it ranks second nationally in
pre-need market share.



                                       6

<PAGE>   7

     The Company currently believes that it ranks third nationally in mortgage
protection insurance with an estimated 17% market share. Slightly over 80% of
the mortgage protection market share is believed to be held by four companies
and 33% of the market is held by the market leader.

     Various independent companies issue ratings assessing the ability of
insurance companies to meet their policyholder and other contractual
obligations, as well as assessing the overall financial performance and
strength of companies. The most widely used ratings are those prepared and
published by A.M. Best Company, Inc. Ratings by A.M. Best range from "A++"
(Superior) to "F" (In Liquidation). In the Best Week published December 23,
1996, Liberty Life was rated "A" (Excellent) and Pierce National was rated
"B++" (Very Good). Liberty Life also has a current claims-paying rating of
"AA-" (Very High) by Duff & Phelps Credit Rating Co. The rating agencies base
their ratings on information provided by the insurer and their own analysis,
studies and assumptions. The ratings apply only to the specific company rated
and do not extend to The Liberty Corporation as a whole, nor are the ratings a
recommendation to buy, sell or hold securities. The agencies can change or
withdraw their published ratings at any time the agency deems circumstances
warrant a change. Should Liberty Life's or Pierce National's rating be
downgraded, sales of their products and persistency of the existing in-force
business could be adversely affected. Insurance company ratings are generally
considered to be more important in the annuity and general agency markets,
neither of which are major markets for Liberty Life or Pierce National.

     INSURANCE REGULATION. Like other insurance companies, the Company's
insurance subsidiaries are subject to regulation and supervision by the state
or other insurance department of each jurisdiction in which they are licensed
to do business. These supervisory agencies have broad administrative powers
relating to the granting and revocation of licenses to transact business, the
licensing of agents, the approval of policy forms, reserve requirements and the
form and content of required statutory basis financial statements. As to its
investments, each of the Company's insurance subsidiaries must meet the
standards and tests established by the National Association of Insurance
Commissioners (the "NAIC") and, in particular, the investment laws and
regulations of the states in which each subsidiary is domiciled. All states and
jurisdictions (including the Canadian provinces where Pierce National is also
licensed) have their own statutes and regulations, which vary in certain
respects. However, the NAIC Model Act and regulations have tended to make the
various states' regulation more uniform. The insurance companies are also
subject to laws in most states that require solvent life insurance companies to
pay guaranty fund assessments to protect the interests of policyholders of
insolvent life insurance companies.

     The NAIC and state regulatory authorities require the Asset Valuation
Reserve or "AVR" and the Interest Maintenance Reserve or "IMR" to be
established as a liability on a life insurer's statutory basis financial
statements, but do not affect financial statements of the Company prepared in
accordance with generally accepted accounting principles. AVR establishes a
statutory reserve for mortgage loans, equity real estate and joint ventures, as
well as for fixed maturities and common and preferred stock. AVR generally
captures all realized and unrealized gains and losses on such assets, other
than those resulting from changes in interest rates. IMR captures the net gains
or losses that are realized upon the sale of fixed income securities (bonds,
preferred stocks, mortgage-backed securities and mortgage loans) and that
result from changes in the overall level of interest rates, and amortizes these
net realized gains or losses into income over the remaining life of each
investment sold, thus limiting the ability of an insurer to enhance statutory
surplus by taking gains on fixed income securities. The IMR and AVR
requirements have not had a material impact on the Company's insurance
subsidiaries' surplus nor the insurance subsidiaries' ability to pay dividends
to the parent company.

     In recent years the NAIC has approved and recommended to the states for
adoption and implementation several regulatory initiatives designed to decrease
the risk of insolvency of insurance companies in general. These initiatives
include the implementation of a risk-based capital ("RBC") formula for
determining adequate levels of capital and surplus and further restrictions on
an insurance company's payment of dividends to its shareholders. To date, South
Carolina has not adopted the NAIC risk-based capital model act; however, it
does require prior notice to the South Carolina Commissioner of Insurance of
dividend distributions to shareholders, and permits the Commissioner to
disapprove or limit the dividend within 30 days of notice if the dividend or
distribution is deemed an unreasonable strain on surplus. The NAIC risk-based
capital model act or similar initiatives may be adopted by South Carolina or




                                       7
<PAGE>   8

the various states in which Liberty Life and the Company's other insurance
subsidiaries are licensed, but the ultimate content and timing of any statutes
and regulations adopted by the states cannot be determined at this time.

     Under the NAIC's risk-based capital requirements, insurance companies must
calculate and report information under a risk-based capital formula in their
annual statutory financial statement. This information is intended to permit
insurance regulators to identify and require remedial action for inadequately
capitalized insurance companies, but is not designed to rank adequately
capitalized companies. The NAIC requirements provide for four levels of
potential involvement by state regulators for inadequately capitalized
insurance companies, ranging from a requirement for the insurance company to
submit a plan to improve its capital, to regulatory control of the insurance
company. The RBC ratios for the Company's insurance subsidiaries significantly
exceed the minimum capital requirements at December 31, 1996.

     Another NAIC Model Act limits dividends that may be paid in any calendar
year without regulatory approval to the lesser of (i) 10% of the insurer's
statutory surplus at the prior year-end, or (ii) the statutory net gain from
operations of the insurer (excluding realized capital gains and losses) for the
prior calendar year. The current South Carolina statutes applicable to Liberty
Life do not conform to the NAIC Model Act (South Carolina limits dividends to
the greater of 10% of statutory surplus or gain from operations). Under current
South Carolina law, without prior approval from the South Carolina Commissioner
of Insurance, dividend payments from Liberty Life to the Company are limited to
the greater of the prior year's statutory gain from operations or 10% of the
prior year's statutory surplus. The maximum allowable dividend that can be paid
in 1997 by Liberty Life without approval from the South Carolina Insurance
Commissioner is $25.9 million. Actual dividends and distributions paid by
Liberty Life were $21.0 million in 1996, $20.0 million in 1995, and $20.3
million in 1994. Under regulations effective July 1, 1995, the South Carolina
Insurance Department must be notified of all dividends and distributions to
shareholders within five days following the declaration, and at least ten days
prior to the payment of the dividend or distribution, and will have the
authority to limit the amount of any dividends or distributions. Extraordinary
dividends, defined as distributions that, together with all other distributions
within a 12 month period, exceed the greater of the net gain from operations or
10% of statutory surplus, cannot be made without the approval of the South
Carolina Insurance Department, unless the department has not disapproved the
payment within 30 days following the notice of the declaration. The current
California statutes applicable to Pierce National limit dividend payments to
the Company to the greater of 10% of statutory surplus or the prior year's net
gain from operations (excluding realized capital gains and losses). The maximum
allowable dividend that Pierce National can pay during 1997 will be $10.4
million. Pierce National did not pay any dividends to Liberty in 1996 and paid
$2.7 million in dividends in 1995.

     In accordance with the rules and practices of the NAIC and in accordance
with state law, every insurance company is generally examined once every three
years by examiners from its state of domicile and from several of the other
states where it is licensed to do business. Examinations of Liberty Life and
Pierce National for the three years ended December 31, 1994 have been completed
and the reports issued did not indicate any significant areas of concern.

     The Office of the Superintendent of Financial Institutions - Canada, and
the Canadian provinces regulate and supervise the Canadian operations of Pierce
National in the same manner as the NAIC and the states. Separate financial
statements are required to meet the Canadian regulatory requirements and a
separate examination is conducted by the Canadian regulatory agencies.

     The Company's insurance subsidiaries are also subject to regulation as an
insurance holding company system under statutes which have been enacted in
their states of domicile and other states in which they are licensed to do
business. Pursuant to these statutes, Liberty Life and Pierce National are
required to file an annual registration statement with the Office of the
Commissioner of Insurance and to report all material changes or transactions.
In addition, these statutes restrict the ability of any person to acquire
control (generally presumed at 10% or more) of the outstanding voting
securities of the Company without prior regulatory approval.




                                       8
<PAGE>   9


BROADCASTING OPERATIONS

     Cosmos currently owns and operates the following television stations,
seven of which were ranked No. 1 in their market by the November 1996 Nielsen
ratings.

<TABLE>
<CAPTION>
      Station               Primary Market                         Affiliation      VHF/UHF
      -------               --------------                         -----------      -------

      <S>                   <C>                                    <C>              <C>   
      WAVE-TV               Louisville, Kentucky                   NBC              VHF
      WIS-TV                Columbia, South Carolina               NBC              VHF
      WSFA-TV               Montgomery, Alabama                    NBC              VHF
      KPLC-TV               Lake Charles, Louisiana                NBC              VHF
      WTOL-TV               Toledo, Ohio                           CBS              VHF
      KAIT-TV               Jonesboro, Arkansas                    ABC              VHF
      WFIE-TV               Evansville, Indiana                    NBC              UHF
      WLOX-TV               Biloxi, Mississippi                    ABC              VHF
</TABLE>

     Cosmos has 812 full-time employees and 126 part-time employees, including
its cable sales operations in Columbia, SC, Florence, SC, Sumter, SC,
Montgomery, AL and Frankfort, KY.

     NETWORK AFFILIATES. Each Cosmos station is affiliated with one of the
major networks - NBC, ABC, CBS. The affiliation contracts provide that the
network will offer to the affiliated station a variety of network programs,
both sponsored and unsponsored, for which the station has the right of first
refusal against any other television station located in its community. The
station has the right to reject or accept the programs offered by the network
and also has the right to broadcast programs either produced by the station or
acquired from other sources. The major networks provide their affiliated
stations with programming and sell the programs, or commercial time during the
programs, to national advertisers. The major networks typically provide
programming for approximately 90 hours of the approximately 135 hours per week
broadcast by their affiliated stations.

     The NBC affiliation contracts with each of Cosmos' NBC affiliated stations
have been continuously in effect for over thirty-nine years. Cosmos' CBS and
ABC affiliation contracts have each been continuously in effect for
approximately thirty years.

     SOURCES OF COSMOS' TELEVISION OPERATING REVENUES. The following table
shows the approximate percentage of Cosmos' gross television operating revenues
by source excluding other income for the three years ended December 31, 1996:

<TABLE>
<CAPTION>
Year ended December 31                                                  1996           1995           1994
-------------------------------------------------------------------------------------------------------------
<S>                                                                        <C>            <C>          <C>
Local and Regional Advertising                                             60%            60%          57%
National Spot Advertising                                                  26             28           30
Network Compensation                                                        8              9            7
Political Advertising                                                       6              3            6
</TABLE>

     Local and regional advertising is sold by each station's own sales
representatives to local and other non-national advertisers or agencies.
Generally these contracts are short-term, although occasionally longer-term
packages will be sold. National spot advertising (generally a series of spot
announcements between programs or within the station's own programs) is sold by
the station or its sales representatives directly to agencies representing
national advertisers. Most of these national sales contracts are also
short-term, often covering spot campaigns running for thirteen weeks or less.
Network compensation is paid by the network to its affiliated stations for
broadcasting network programs that include advertising sold by the network to
agencies representing national advertisers. Political advertising is generated
by national and local elections, which is by definition very cyclical.

     A television station's rates are primarily determined by the estimated
number of television homes it can provide for an advertiser's message. The
estimates of the total number of television homes in the market and of the
station's share 


                                       9
<PAGE>   10

of those homes is based on the AC Nielsen industry-wide television rating
service. The demographic make-up of the viewing audience is equally important
to advertisers. A station's rate card for national and local advertisers takes
into account, in addition to audience delivered, such variables as the length
of the commercial announcements and the quantity purchased. The payments by a
network to an affiliated station are largely determined by the total homes
delivered and is based on the local market rating strength of the affiliate and
the audience it helps bring to the network programs.

     TELEVISION BROADCASTING COMPETITION. The television broadcasting industry
competes with other leisure time activities for the time of viewers and with
all other advertising media for advertising dollars. Within its coverage area a
television station competes with other stations and with other advertising
media serving the same area. The outcome of the competition among stations for
advertising dollars in a market depends principally on share of audience,
advertising rates and the effectiveness of the sales effort.

     Cosmos believes that each of its stations has a strong competitive
position in its local market, enabling it to deliver a high percentage of the
local television audience to local advertisers. Cosmos' commitment to local
news programming, combined with syndicated programming, are important elements
in maintaining Cosmos' current market positions.

     Another source of competition is cable television, which brings additional
television programming, including pay cable (HBO, Showtime, Movie Channel,
etc.), into subscribers' homes in a television station's service area. Cable
television competes for the station's viewing audience and, on a more modest
scale, its advertising.

     Federal law now requires that cable operators negotiate with television
operators for the right to carry a station's signal (programs) on cable
systems. Cosmos recently used this "retransmission consent" negotiation to
forge long-term partnerships with cable operators with the purpose of
developing secondary revenue streams from programs and services specifically
produced for cable. In 1994 Cosmos formed CableVantage Inc., a marketing
company designed to assist local cable operators in the sale of commercial time
available in cable network programs.

     Subscription Television, an over-the-air pay television service, and
Multipoint Distribution Service, a microwave-distributed pay television
service, also compete for television audiences. In addition, licenses are now
being granted for Multichannel Multipoint Distribution Service. None of these
services has yet significantly fractionalized the audiences of commercial
television stations.

     Two other television broadcast services are providing consumers with
additional technical delivery/programming opportunities. Low power television,
sometimes referred to as "neighborhood TV," is authorized to operate in a
limited coverage area. Authorizations are being granted by the Federal
Communication Commission ("FCC") on a lottery basis. Direct Broadcast
Satellite, which transmits television signals from satellite transponders to
parabolic home antennae, is now being actively marketed.

     FEDERAL REGULATION OF BROADCASTING. Cosmos' broadcasting operations are
subject to the jurisdiction of the FCC under the Communications Act. The
Communications Act empowers the FCC, among other things, to issue, revoke or
modify broadcasting licenses; to assign frequency bands; to determine the
location of stations; to regulate the apparatus used by stations; to establish
areas to be served; to adopt such regulations as may be necessary to carry out
the provisions of the Communications Act and to impose certain penalties for
violation of such regulations. The Communications Act prohibits the transfer of
a license or the transfer of control or other change in control of a licensee
without prior approval of the FCC. The Hipp family is considered by the FCC to
have de facto control over Cosmos, and any action that would change such
control would require prior approval of the FCC.

     The Telecommunications Act signed into law in 1996 (the "1996 Act")
changed many existing regulations concerning, among other things, the ownership
of television stations. Under previous regulations governing multiple
ownership, a license to operate a television station generally would not be
granted to any person (or persons under common control) if such person directly
or indirectly held a significant interest in more than 12 television stations
or less than 12 television stations if their audience coverage exceeded 25% of
total United States households. The 1996 Act allows for unlimited ownership of
stations as long as the audience coverage does not exceed 35% of total




                                      10
<PAGE>   11

households. Previous FCC regulations also limited ownership of television
stations by those having interests in cable television systems and daily
newspapers serving the same service area as the television stations. The 1996
Act dropped the station/cable same market ownership prohibition. The 1996 Act
also lengthened the term for which television broadcasting licenses may be
granted from a maximum term of five years to a maximum term of eight years. In
the absence of adverse findings by the FCC as to the licensee's qualification,
licenses are usually renewed without hearing by the FCC for additional eight
year terms. Cosmos' renewal applications have always been granted without
hearing for the full term. The loosening of the ownership provisions, as well
as the other provisions included in the 1996 Act, are not expected to have any
immediate impact on the operations of Cosmos.

     There are additional FCC Regulations and Policies, and regulations and
policies of other federal agencies, principally the Federal Trade Commission,
regulating network/affiliate relations, political broadcasts, children's
programming, advertising practices, equal employment opportunity, carriage of
television signals by CATV systems, application and reporting procedures and
other areas affecting the business and operations of television stations.




                                      11
<PAGE>   12



EXECUTIVE OFFICERS

     The following is a list of the Executive Officers of the Registrant
indicating their age and certain biographical data.

W. HAYNE HIPP, Age 57
   Chairman of the Board of Liberty since May, 1995 Chairman of the Board of
   Cosmos since May, 1995
   President and Chief Executive Officer of Liberty since September, 1981
   Chairman of the Board of Liberty Life from January, 1979 - February, 1988;
     September, 1989 - present
   Chairman of the Board of Cosmos - May , 1989 - February, 1992

H. RAY EANES, Age 56
   Senior Vice President of Finance and Treasurer of Liberty since May, 1994
   Prior to joining Liberty was Vice Chairman - Finance and Administration of 
   Ernst & Young LLP

JENNIE M. JOHNSON, Age 49
   President of Pierce National Life Insurance Company since August, 1995 Vice
   President, Administration of Liberty from February, 1994 to August, 1995
   Vice President, Planning of Liberty from February, 1986 to December, 1994

JAMES M. KEELOR, Age 54
   President of Cosmos since February, 1992
   Vice President, Operations, of Cosmos from December, 1989 to February, 1992

RONALD F. LOEWEN, Age 49
   President of Liberty Life since January, 1997 General Manager of WIS-TV from
   April, 1990 to January, 1997

M. PORTER B. ROSE, Age 55
   President, Liberty Investment Group, Inc. since March, 1992
   Chairman, Liberty Capital Advisors, Inc. since January, 1987
   Chairman, Liberty Properties Group, Inc. since January, 1987

JOHN P. SMITH, Age 44
   Controller of Liberty since September, 1994
   Previously Vice President/Finance of Liberty Life Insurance Company

MARTHA G. WILLIAMS, Age 54
   Vice President, General Counsel & Secretary of Liberty since January, 1982
   Vice President, General Counsel & Secretary of Liberty Life since January,
   1982 Secretary and Counsel of Cosmos since February, 1982





                                      12
<PAGE>   13



OTHER BUSINESS

     In addition to the operating subsidiaries, the Company has other minor
organizations. These include the Company's administrative staff, an investment
advisory company, a property development & management company and
transportation operations.


INDUSTRY SEGMENT DATA

     Information concerning the Company's industry segments is contained in
Selected Financial Data on page 36 of The Liberty Corporation Annual Report to
Shareholders and is filed as Exhibit 13 on page 35 of this report and is
incorporated in this Item 1 by reference.


ITEM 2.       PROPERTIES

     MAIN OFFICES. The main office of the Company, Liberty Life, Pierce
National, Liberty Insurance Services, and Cosmos is located on a 30-acre tract
in Greenville, SC, and consists of three buildings totaling approximately
360,000 square feet plus parking. The main office facilities are owned by the
Company and Liberty Life. Liberty Life leases branch office space in various
cities. Leases are normally made for terms of one to ten years.

     Cosmos owns its television broadcast studios, office buildings and
transmitter sites in Columbia, SC; Montgomery, AL; Toledo, OH; Louisville, KY;
Evansville, IN; Jonesboro, AR; Lake Charles, LA; and Biloxi, Mississippi.


ITEM 3.       LEGAL PROCEEDINGS

     In January 1996, a lawsuit was filed against the Company alleging breach
of contract in connection with an agreement to develop a state-of-art software
system to administer the Company's insurance operations. The suit was filed by
the software developer. Management of the Company, after consultation with
legal counsel, believes that the lawsuit filed against the Company is without
merit and intends to contest the suit vigorously. The Company believes the suit
filed against it was in response to a suit filed by the Company in connection
with failure of the software developer to deliver the system. The suit against
the software developer seeks to recover amounts paid to the software developer,
and other costs incurred by the Company, in an attempt to develop the system.
The Company believes it will be successful in its lawsuit against the software
developer; however, no reasonable estimate of the amount of the recovery is
known at this time.

     In December 1995, a lawsuit was filed against the Company alleging breach
of contract. The lawsuit relates to a transaction in which the Company was
unsuccessful in acquiring certain entities partially owned by the plaintiff.
Management, after consultation with legal counsel, believes the lawsuit is
without merit and intends to contest the suit vigorously.

     Other than the suits mentioned above, the Company is not currently engaged
in legal proceedings of material consequence other than ordinary routine
litigation incidental to its business. Any proceedings reported in prior
filings have been settled or otherwise satisfied.




                                      13
<PAGE>   14



ITEM 4.       SUBMISSION OF MATTERS TO A VOTE OF SHAREHOLDERS

     None

                                      
                                   PART II
                                      
ITEM 5.       MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED SECURITY 
              STOCKHOLDER MATTERS

     Information concerning the market for the Company's Common Stock and
related stockholder matters is contained on the inside back cover of The
Liberty Corporation Annual Report to Shareholders and is filed as Exhibit 13 on
page 34 of this report and is incorporated in this Item 5 by reference.


ITEM 6.       SELECTED FINANCIAL DATA

     Selected Financial Data for the Company is contained on page 36 of The
Liberty Corporation Annual Report to Shareholders and is filed as Exhibit 13 on
page 35 of this report and is incorporated in this Item 6 by reference.



ITEM 7.       MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
              RESULTS OF OPERATIONS

     Management's Discussion and Analysis of Financial Condition and Results of
Operations is contained on pages 7-11, 14-16 and 19 of The Liberty Corporation
Annual Report to Shareholders and is filed as Exhibit 13 on pages 36-44 of this
report and is incorporated in this Item 7 by reference.


ITEM 8.       FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION

     The Company's Consolidated Financial Statements and Report of Independent
Auditors are contained on pages 6, 12, 13, 17, 18, and 20-35 and of The Liberty
Corporation Annual Report to Shareholders and is filed as Exhibit 13 on pages
45-66 of this report and are incorporated in this Item 8 by reference.


ITEM 9.       CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND 
              FINANCIAL DISCLOSURE

     None


                                   PART III

ITEM 10.      DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     Information concerning Directors of the Company is contained in The
Liberty Corporation Proxy Statement for the May 6, 1997 Annual Meeting of
Shareholders and is incorporated in this Item 10 by reference.

     Information concerning Executive Officers of the Company is submitted in a
separate section of this report in Part I, Item 1 on page 12 and is
incorporated in this Item 10 by reference.



                                      14

<PAGE>   15


ITEM 11.      EXECUTIVE COMPENSATION

              Information concerning Executive Compensation and transactions is
contained in The Liberty Corporation Proxy Statement for the May 6, 1997 Annual
Meeting of Shareholders and is incorporated in this Item 11 by reference.


ITEM 12.      SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     Information concerning Security Ownership of Certain Beneficial Owners and
Management is contained in The Liberty Corporation Proxy Statement for the May
6, 1997 Annual Meeting of Shareholders and is incorporated in this Item 12 by
reference.


ITEM 13.      CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Information concerning Certain Relationships and Related Transactions is
contained in The Liberty Corporation Proxy Statement for the May 6, 1997 Annual
Meeting of Shareholders and is incorporated in this Item 13 by reference.


                                   PART IV

ITEM 14.      EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(A)  (1) AND (2).   LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT 
     SCHEDULES

     The following consolidated financial statements of The Liberty Corporation
and Subsidiaries are included in the Company's Annual Report to Shareholders
for the year ended December 31, 1996, filed as Exhibit 13 to this report and
incorporated in Item 8 by reference:

         Consolidated Balance Sheets - December 31, 1996 and 1995
         Consolidated Statements of Income - For Each of the Three Years Ended
         December 31, 1996 Consolidated Statements of Cash Flows - For Each of
         the Three Years Ended December 31, 1996 Consolidated Statements of
         Shareholders' Equity - For Each of the Three Years Ended December 31,
         1996 Notes to Consolidated Financial Statements - December 31, 1996
         Report of Independent Auditors


         The following consolidated financial statement schedules of The
         Liberty Corporation and Subsidiaries are included in Item 14(d):

           I   -  Summary of Investments
           II  -  Condensed Financial Statements of The Liberty Corporation 
                  (Parent Company)
           III -  Supplementary Insurance Information
           IV  -  Reinsurance
           V   -  Valuation and Qualifying Accounts and Reserves

         All schedules for which provision is made in the applicable accounting
         regulation of the Securities and Exchange Commission, but which are
         excluded from this report, are not required under the related
         instructions or are inapplicable, and therefore have been omitted.



                                      15

<PAGE>   16


         (A)(3).  LIST OF EXHIBITS

<TABLE>
<S>      <C>  
3.1      Restated Articles of Incorporation, as amended through March 15, 1995
         (filed with the Registrant's Annual Report on Form 10-K for the year
         ended December 31, 1994 and incorporated herein by reference)

3.2      Bylaws, as amended through November 5, 1996

4.1      See Articles 4, 5, 7 and 9 of the Company's Restated Articles of
         Incorporation (filed as Exhibit 3.1) and Articles I, II and VI of the
         Company's Bylaws (filed as Exhibit 3.2).

4.2      See the Form of Rights Agreement dated as of August 7, 1990 between
         The Liberty Corporation and The Bank of New York, as Rights Agent,
         which includes as Exhibit B thereto the form of Right Certificate
         (filed as Exhibits 1 and 2 to the Registrant's Form 8-A, dated August
         10, 1990, and incorporated herein by reference) with respect to the
         Rights to purchase Series A Participating Cumulative Preferred Stock.

4.3      See Credit Agreement dated March 21, 1995 (filed as Exhibit 10 to the
         Registrant's Quarterly Report on Form 10Q for the quarter ended June
         30, 1995 and incorporated herein by reference).

10.      See Credit Agreement dated March 21, 1995 (filed as Exhibit 4.3).

11.      The Liberty Corporation and Subsidiaries Consolidated Earnings Per
         Share Computation

13.      Portions of The Liberty Corporation Annual Report to Shareholders for
          the year ended December 31, 1996: 
         Market for the Registrant's Common Stock and Related Security Stockholder Matters 
         Selected Financial Data
         Management's Discussion and Analysis of Financial Condition and Results of Operations 
         Financial Statements and Supplementary Information: 
          Consolidated Balance Sheets - December 31, 1996 and 1995
          Consolidated Statements of Income - For the three years ended December 31, 1996 
          Consolidated Statements of Cash Flows - For the three years ended December 31, 1996 
          Consolidated Statements of Shareholders' Equity - For the three years ended December 31, 1996 
         Notes to Consolidated Financial Statements - December 31, 1996 
         Report of Independent Auditors

21.      The Liberty Corporation and Subsidiaries, List of Subsidiaries

23.      Consent of Independent Auditors

24.      A.  Powers of Attorney applicable for certain signatures of members of the Board of Directors in
             Registrant's 10-K filed for the year ended December 31, 1983

         B.  Powers of Attorney applicable for certain signatures of members of the Board of Directors in
             Registrant's 10-K filed for the year ended December 31, 1985

         C.  Powers of Attorney applicable for certain signatures of members of the Board of Directors in
             Registrant's 10-K filed for the year ended December 31, 1989

         D.  Powers of Attorney applicable for certain signatures of members of the Board of Directors in
             Registrant's 10-K filed for the year ended December 31, 1994

         E.  Powers of Attorney applicable for certain signatures of members of the Board of Directors in
             Registrant's 10-K filed for the year ended December 31, 1995

         F.  Powers of Attorney applicable for certain signatures of members of the Board of Directors in
             Registrant's 10-K filed for the year ended December 31, 1996
</TABLE>



                                      16
<PAGE>   17



<TABLE>
<S>     <C>                                                  
        27.       Financial Data Schedule (Electronic Filing Only)

        99.       Additional Exhibits

                  A.  Annual Statement on Form 11-K for The Liberty Corporation and Related Adopting Employers' 
                      401(k) Thrift Plan for the year ended December 31, 1996

(B).              REPORTS ON FORM 8-K FILED IN 1996

                  None

(C).              EXHIBITS FILED WITH THIS REPORT

        3.2       Bylaws, as amended through November 5, 1996

        11.       The Liberty Corporation and Subsidiaries Consolidated Earnings Per Share Computation

        13.       Portions of The Liberty Corporation Annual Report to Shareholders for the year ended December 31, 1996: 
                  Market for the Registrant's Common Stock and Related Security Stockholder Matters 
                  Selected Financial Data 
                  Management's Discussion and Analysis of Financial Condition and Results of Operations 
                  Financial Statements and Supplementary Information:
                   Consolidated Balance Sheets - December 31, 1996 and 1995
                   Consolidated Statements of Income - For the three years ended December 31, 1996  
                   Consolidated Statements of Cash Flows - For the three years ended December 31, 1996 
                   Consolidated Statements of Shareholders' Equity - For the three years ended December 31, 1996
                  Notes to Consolidated Financial Statements - December 31, 1996
                  Report of Independent Auditors

        21.       The Liberty Corporation and Subsidiaries, List of Subsidiaries

        23.       Consent of Independent Auditors

        24.       Powers of Attorney applicable for certain signatures of members of the Board of Directors in Registrant's 
                  10-K filed for the year ended December 31, 1996.

        27.       Financial Data Schedule (Electronic Filing Only)

        99.       Additional Exhibits

                  A.       Annual Statement on Form 11-K for The Liberty Corporation and Related Adopting Employers' 401(k)
                           Thrift Plan for the year ended December 31, 1996

(D).     CONSOLIDATED FINANCIAL STATEMENT SCHEDULES FILED WITH THIS REPORT

                  I-       Summary of Investments - December 31, 1996
                  II-      Condensed Financial Statements of The Liberty Corporation (Parent Company) December 31, 1996 and 1995
                  III-     Supplementary Insurance Information - For the Three Years Ended December 31, 1996 
                  IV-      Reinsurance - For the Three Years Ended December 31, 1996
                  V-       Valuation and Qualifying Accounts and Reserves - For the Three Years Ended December 31, 1996 Schedule I
                           
</TABLE>




                                       17
<PAGE>   18
                                                                     Schedule 1

                   THE LIBERTY CORPORATION AND SUBSIDIARIES
                            SUMMARY OF INVESTMENTS
                               DECEMBER 31, 1996
                                  (In $000's)

<TABLE>
<CAPTION>
                                                                                                Amount at 
                                                                                              Which Shown 
                  Type of Investment                                  Cost      Value          on Balance
                                                                                                  Sheet
---------------------------------------------------------------------------    -----------    ------------
<S>                                                             <C>            <C>            <C>        
Fixed maturity securities, available for sale 
   Bonds:
     United States Government and government agencies and
       authorities                                              $   417,386    $   433,418    $   433,418
     States, municipalities, and political subdivisions                  50             51             51
     Foreign governments                                              7,080          7,261          7,261
     Foreign corporate and other                                     98,669        104,633        104,633
     Public utilities                                               149,473        161,982        161,982
     Convertibles and bonds with warrants attached                     --             --             --
     All other corporate bonds                                      750,722        767,923        767,923
   Redeemable preferred stocks                                       41,833         42,271         42,271
                                                                -----------    -----------    -----------
   Total                                                          1,465,213      1,517,539      1,517,539
                                                                -----------    ===========    -----------

Equity securities, available for sale 
   Common stocks:
     Public utilities                                                  --             --             --
     Banks, trusts and insurance companies                      $     4,568    $     8,536    $     8,536
     Industrial, miscellaneous, and all other                        18,374         28,689         28,689
   Nonredeemable preferred stocks                                    38,489         38,366         38,366
                                                                -----------    -----------    -----------
   Total                                                             61,431    $    75,591         75,591
                                                                -----------    ===========    -----------


Mortgage loans on real estate                                       230,910                       230,910
Investment real estate                                              132,696                       132,696
Policy loans                                                         98,816                        98,816
Other long-term investments                                          22,470                        22,470
Short-term investments                                                  250                           250
                                                                -----------                   -----------

Total investments                                               $ 2,011,786                   $ 2,078,272
                                                                ===========                   ===========



</TABLE>


                                      18
<PAGE>   19
                                                                Schedule II


                   THE LIBERTY CORPORATION (PARENT COMPANY)
                            CONDENSED BALANCE SHEETS
                           DECEMBER 31, 1996 and 1995
                         (In $000's, except share data)

<TABLE>
<CAPTION>
                     ASSETS                                                       1996           1995
                                                                               ----------     ----------
<S>                                                                            <C>            <C>       
Cash                                                                           $    1,450     $      466
Investment securities                                                                 600            679
Loans, notes and other receivables                                                  7,890          9,953
Investment properties, at cost less accumulated depreciation of
   $10,118 in 1996 and $8,432 in 1995                                              79,941         70,875
Other long-term investments                                                         6,139         11,689
Buildings and equipment, at cost less accumulated depreciation of
   $11,919 in 1996 and $9,863 in 1995                                              19,066         21,379
Investment in affiliated companies*                                               657,194        652,420
Intercompany debt and advances*                                                    96,921         96,606
Income taxes recoverable                                                           10,823         12,053
Deferred income tax benefits (liabilities)                                          1,026            (59)
Other assets                                                                        8,973          9,865
                                                                               ----------     ----------

      Total Assets                                                             $  890,023     $  885,926
                                                                               ==========     ==========

LIABILITIES, REDEEMABLE PREFERRED 
    STOCK AND SHAREHOLDERS' EQUITY

Liabilities:
  Notes, mortgages and other debt                                              $  243,221     $  249,881
  Accounts payable and accrued expenses                                            16,826         11,637
  Other liabilities                                                                   221            287
                                                                               ----------     ----------
      Total Liabilities                                                           260,268        261,805

Redeemable Preferred Stock:
  1994-A Series, $35.00 redemption value, 668,207
     shares issued and outstanding                                                 23,387         23,387
  1994-B Series, $37.50 redemption value, 592,334 and 594,126
     shares issued and outstanding in 1996 and 1995, respectively                  22,212         22,280
                                                                               ----------     ----------
      Total Redeemable Preferred Stock                                             45,599         45,667

Shareholders' Equity:
  Common stock
    Authorized - 50,000,000 shares, no par value
       Issued and Outstanding - 20,214,738 in 1996 and 20,060,629 in 1995         163,443        158,735
  Convertible Preferred Stock, 1995-A Series,
     599,985 shares issued and outstanding                                         20,999         20,999
  Unearned stock compensation                                                      (7,168)        (6,050)
  Unrealized appreciation (depreciation) on fixed maturity securities
     available for sale and equity securities of subsidiaries                      39,726         57,986
  Cumulative foreign currency translation adjustment                                 (204)          (999)
   Retained earnings                                                              367,360        347,783
                                                                               ----------     ----------
                                                                                              
      Total Shareholders' Equity                                                  584,156        578,454
                                                                               ----------     ----------

      Total Liabilities, Redeemable Preferred Stock and Shareholders' Equity   $  890,023     $  885,926
                                                                               ==========     ==========
</TABLE>


 *Eliminated in consolidation 
  See notes to condensed financial statements.



                                      19
<PAGE>   20
                                                                Schedule II



                    THE LIBERTY CORPORATION (PARENT COMPANY)
                         CONDENSED STATEMENTS OF INCOME
                  FOR THE THREE YEARS ENDED DECEMBER 31, 1996
                                  (In $000's)


<TABLE>
<CAPTION>
                                                 1996           1995           1994
                                              ----------     ----------     ----------
<S>                                           <C>            <C>            <C>         
REVENUES
  Dividends from subsidiaries*                $   33,250     $   45,331     $   39,973
  Interest-unaffiliated                              676          1,151            553
  Intercompany interest*                           8,519          8,303          7,068
  Realized investment losses                      (5,407)        (3,195)          --
  Other                                           27,123         30,059         25,927
                                              ----------     ----------     ----------

     Total Revenues                               64,161         81,649         73,521

EXPENSES
  Salaries and wages                              18,240          9,803          7,526
  Interest-unaffiliated                           15,007         14,867         10,475
  Intercompany interest*                           2,471          4,072          3,145
  Taxes and licenses                               2,250          1,508          1,206
  Depreciation and amortization                    8,645          5,275          4,552
  Other                                           10,621         20,874         22,051
                                              ----------     ----------     ----------

     Total Expenses                               57,234         56,399         48,955

Income before income taxes                         6,927         25,250         24,566
Income tax benefits                               (9,786)        (7,359)        (5,880)
                                              ----------     ----------     ----------

Income before earnings of subsidiaries            16,713         32,609         30,446

Earnings of subsidiaries
  net of dividends paid to parent*                21,230         27,928         (4,371)
                                              ----------     ----------     ----------

    NET INCOME                                $   37,943***  $   60,537***  $   26,075**
                                              ==========     ==========     ==========
</TABLE>

*        Eliminated in consolidation.

**       Differs from consolidated net income by $103 due to gains recognized
         on a consolidated basis previously recognized by subsidiaries on
         intercompany transactions. Gains were deferred on a consolidated basis
         until completion of the earnings process.

***      Differs from consolidated net income by $603 and $1,184 in 1996 and
         1995, respectively, due to gains deferred on a consolidated basis
         until completion of the earnings process.

See notes to condensed financial statements.



                                      20
<PAGE>   21
                                                                Schedule II


                    THE LIBERTY CORPORATION (PARENT COMPANY)
                       CONDENSED STATEMENTS OF CASH FLOWS
                  FOR THE THREE YEARS ENDED DECEMBER 31, 1996
                                  (In $000's)

<TABLE>
<CAPTION>
                                                         1996            1995          1994
                                                     -----------    -----------    -----------
<S>                                                  <C>            <C>            <C>        
OPERATING ACTIVITIES
Net income                                           $    37,943    $    60,537    $    26,075
Adjustments to reconcile net income to net cash
provided by operating activities:
   Depreciation and amortization                           8,645          5,275          4,552
   Provision for deferred income taxes                    (1,143)         2,740          2,754
   Earnings from subsidiary operations, net of
     dividends paid to parent                            (21,230)       (27,928)         4,371
   Gain on disposal of assets                             (3,172)        (3,231)        (2,989)
   Realized investment losses                              5,407          3,195           --
   Change in operating assets and liabilities:
     Increase in intercompany debt and advances*             (79)       (27,434)        (9,426)
     Decrease (increase) in accounts and notes
      receivable                                           2,063         (1,209)           (97)
     Increase in accounts payable and
      accrued expenses                                     5,189          2,478          2,212
     Decrease (increase) in other assets                     892         (1,250)        (5,334)
     Increase (decrease) in other liabilities, and
       accrued income taxes                                1,164         (5,927)          (969)
   Other                                                  (2,083)         1,144         (3,869)
                                                     -----------    -----------    -----------

NET CASH PROVIDED BY OPERATING ACTIVITIES                 33,596          8,390         17,280

INVESTING ACTIVITIES
Additional investment in subsidiaries*                      --             --           (1,907)
Reduction in investment in subsidiaries*                    --            4,048         10,000
Purchase of investment properties                        (22,556)       (34,177)       (33,198)
Sale of investment properties                             13,982         31,997         15,125
Net cash paid on purchase of insurance business             --             --          (65,212)
Net cash paid on purchase of broadcasting business          --           (5,638)          --
Other                                                      1,270         (9,264)          --
                                                     -----------    -----------    -----------

NET CASH USED IN INVESTING ACTIVITIES                     (7,304)       (13,034)       (75,192)

FINANCING ACTIVITIES
Proceeds from borrowings                               2,957,704      1,901,001      2,537,169
Principal payments on debt                            (2,966,087)    (1,888,820)    (2,462,620)
Dividends paid                                           (18,366)       (16,814)       (14,358)
Stock issued for employee benefit and performance
  incentive compensation programs                          1,441          2,908          3,487
                                                     -----------    -----------    -----------

NET CASH PROVIDED (USED) IN FINANCING ACTIVITIES         (25,308)        (1,725)        63,678

INCREASE (DECREASE) IN CASH                                  984         (6,369)         5,766
Cash at beginning of year                                    466          6,835          1,069
                                                     -----------    -----------    -----------

CASH AT END OF YEAR                                  $     1,450    $       466    $     6,835
                                                     ===========    ===========    ===========
</TABLE>


*Eliminated in consolidation 
See notes to condensed financial statements.




                                      21
<PAGE>   22
                                                                    Schedule II



                    THE LIBERTY CORPORATION (PARENT COMPANY)
                    NOTES TO CONDENSED FINANCIAL STATEMENTS
                               DECEMBER 31, 1996


1.       NOTES, MORTGAGES AND OTHER DEBT

         The general debt obligations at December 31, 1996, are as follows:


<TABLE>
<CAPTION>
                                                                           Average
           (In 000's)                                                   Interest Rate       Amount
                                                                        -------------      --------
<S>                                                                           <C>          <C>     
           Notes due to banks                                                 6.1%         $240,000
           Mortgage loans on investment property                              8.0             3,221
                                                                                           ========
                                                                                           $243,221
                                                                                           ========
</TABLE>

                  On March 21, 1995, the Parent Company completed the
         restructuring of its $325,000,000 revolving credit facility into a new
         $375,000,000, multi-tranche credit facility which will mature on
         various dates beginning in March 1999. Borrowings under the new
         facility were used to refinance indebtedness under the $325,000,000
         facility, as well as to provide funds to meet working capital
         requirements. Note 5 of The Liberty Corporation and Subsidiaries
         Consolidated Financial Statements provides additional information as
         to this agreement. The maturities of the general debt obligations at
         December 31, 1996 are as follows:

<TABLE>
<CAPTION>
                  (In 000's)                                      Amount
                  ----------                                     --------
                  <S>                                            <C>   
                  1997                                           $ 23,739
                  1998                                             21,214
                  1999                                            153,000
                  2000                                             20,268
                  2001                                             20,000
                  Thereafter                                        5,000
                                                                 --------  
                                                                 $243,221
                                                                 ========
</TABLE>

2.       COMMITMENTS AND CONTINGENT LIABILITIES

                  The Parent Company has guaranteed a $7.0 million letter of
         credit for an unaffiliated marketing company. As of December 31, 1996,
         $5.5 million was outstanding under the letter of credit.

3.       RETAINED EARNINGS

                  As of December 31, 1996 and 1995, retained earnings of
         $367,360,000 and $347,783,000 respectively, in The Liberty Corporation
         (Parent Company) financial statements differs from The Liberty
         Corporation and Subsidiaries consolidated financial statements. The
         difference of $3,295,000 and $2,692,000 at December 31, 1996 and 1995,
         respectively, relates to the elimination of gains on intercompany
         transactions on a consolidated basis.



                                      22
<PAGE>   23

                                                                   Schedule III

                    THE LIBERTY CORPORATION AND SUBSIDIARIES
                      SUPPLEMENTARY INSURANCE INFORMATION
                  FOR THE THREE YEARS ENDED DECEMBER 31, 1996
                                  (In $000's)


<TABLE>
<CAPTION>
                                                                         Future Policy                         Other Policy
                                  Deferred Policy                           Benefits,                            Claims &
                                    Acquisition     Cost of Business     Losses, Claims        Unearned          Benefits
            Segment                    Costs            Acquired       and Loss Expenses       Premiums          Payable
----------------------------------------------------------------------------------------------------------------------------
<S>                                    <C>                <C>                 <C>                <C>                <C>    
December 31, 1996
Life/Health Insurance                  $262,182           $70,764             $1,848,762         $4,411             $59,938

December 31, 1995
Life/Health Insurance                  $265,188           $86,925             $1,807,339         $4,078             $51,442

December 31, 1994
Life/Health Insurance                  $259,799           $98,056             $1,727,119         $4,535             $51,969
</TABLE>


<TABLE>
<CAPTION>
                                                                                Amortization
                                                                                of Deferred
                                                              Benefits          Acquisition                       Accident &
                                               Net         Claims, Losses         Costs and          Other         Health
                              Premium      Investment       & Settlement      Cost of Business     Operating       Premiums
         Segment              Revenue        Income           Benefits            Acquired         Expenses        Written
----------------------------------------------------------------------------------------------------------------------------
<S>                           <C>            <C>                <C>                   <C>           <C>             <C>    
1996
Life/Health Insurance         $321,371       $150,413           $218,751              $73,967       $140,294        $50,523

1995
Life/Health Insurance         $331,370       $144,483           $236,774              $43,780       $122,400        $33,867

1994
Life/Health Insurance         $315,789       $129,925           $225,745              $45,024       $137,092        $29,472
</TABLE>




                                      23
<PAGE>   24


                                                                    Schedule IV


                    THE LIBERTY CORPORATION AND SUBSIDIARIES
                                  REINSURANCE
                  FOR THE THREE YEARS ENDED DECEMBER 31, 1996
                                  (In $000's)

<TABLE>
<CAPTION>
                                                                        Amount                           Percentage of
                                                          Ceded to      Assumed                            Amount    
                                             Gross         Other         From          Net               Assumed to 
                                             Amount       Companies    Companies      Amount                 Net   
                                           -------------------------------------------------------------------------  
<S>                                        <C>           <C>            <C>         <C>                       <C>   
Year ended December 31, 1996                                                                                        
                                                                                                                    
Life insurance in force                    $20,696,527   $4,087,097     $13,099     $16,622,529               0.1%  
                                           ====================================================                     
                                                                                                                    
Insurance premiums and policy charges:                                                                              
  Life, annuity and other considerations   $   298,327   $   27,293     $   234     $   271,268               0.1%  
  Accident and health                           58,333        9,205         975          50,103               1.9%  
                                           ----------------------------------------------------                     
                                                                                                                    
    TOTAL                                  $   356,660   $   36,498     $ 1,209     $   321,371                     
                                           ====================================================                     
                                                                                                                    
Year ended December 31, 1995                                                                                        
                                                                                                                    
Life insurance in force                    $21,334,019   $4,554,569     $17,578     $16,797,028               0.1%  
                                           ====================================================                     
                                                                                                                    
Insurance premiums and policy charges:                                                                              
  Life, annuity and other considerations   $   325,571   $   27,843     $   169     $   297,897               0.1%  
  Accident and health                           39,226        6,898       1,145          33,473               3.4%  
                                           ----------------------------------------------------                     
                                                                                                                    
    TOTAL                                  $   364,797   $   34,741     $ 1,314     $   331,370                     
                                           ====================================================                     
                                                                                                                    
Year ended December 31, 1994                                                                                        
                                                                                                                    
Life insurance in force                    $21,600,665   $4,751,940     $15,391     $16,864,116               0.1%  
                                           ====================================================                     
                                                                                                                    
Insurance premiums and policy charges:                                                                              
  Life, annuity and other considerations   $   311,551   $   26,365     $   222     $   285,408               0.1%  
  Accident and health                           32,568        3,693       1,506          30,381               4.9%  
                                           ----------------------------------------------------                     
                                                                                                                    
    TOTAL                                  $   344,119   $   30,058     $ 1,728     $   315,789                     
                                           ====================================================                     
</TABLE>                                                                  
                                                                          




                                      24
<PAGE>   25
                                                                Schedule V
                   THE LIBERTY CORPORATION AND SUBSIDIARIES
                VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
                 FOR THE THREE YEARS ENDED DECEMBER 31, 1996
                                (In the 000's)

<TABLE>
<CAPTION>
                                                                       Additions
                                              -----------------------------------------------------------
                                        Balance at      Charged to      Charged to                           Balance at
                                        Beginning       Costs and          Other                                 End
Deducted From Asset Accounts            of Period        Expenses        Accounts          Deductions         of Period
----------------------------          --------------  --------------  ---------------  ------------------  ---------------
<S>                                  <C>               <C>             <C>               <C>                   <C>
Year Ended December 31, 1996                                                                                          
                                                                                                                      
Accounts receivable -                                                                           20(b)                 
reserve for bad debts                $  1,975          $    567        $    101           $    313(a)          $  2,310 
                                     --------          --------        --------           --------             -------- 
Notes and other loans receivable -                                                                                      
discounts                            $     --          $     --        $     --           $     --             $     -- 
                                     --------          --------        --------           --------             -------- 
Investment properties -                                                                                                 
valuation reserves                   $     --          $     --        $     --           $     --             $     -- 
                                     --------          --------        --------           --------             -------- 

Year Ended December 31, 1995                                                                                            


Accounts receivable -                                                                          334(b)                 
reserve for bad debts                $  1,493          $    858        $     48           $     90(a)          $  1,975 
                                     --------          --------        --------           --------             -------- 
Notes and other loans receivable -                                                                                      
discounts                            $     --          $     --        $     --           $     --             $     -- 
                                     --------          --------        --------           --------             -------- 
Investment properties -                                                                                                 
valuation reserves                   $     --          $     --        $     --           $     --             $     -- 
                                     --------          --------        --------           --------             -------- 

Year Ended December 31, 1994                                                                                            


Accounts receivable -                                                                           28(b)                 
reserve for bad debts                $  1,027          $    408        $    341           $    255(a)          $  1,493 
                                     --------          --------        --------           --------             -------- 
Notes and other loans receivable -                                                                                      
discounts                            $     --          $     --        $     --           $     --             $     -- 
                                     --------          --------        --------           --------             -------- 
Investment properties -                                                                                                 
valuation reserves                   $     --          $     --        $     --           $     --             $     -- 
                                     --------          --------        --------           --------             -------- 
</TABLE>                                                                       

                            
Notes:                                                                         
  (a) Uncollectible accounts written off, net of recoveries.                   
  (b) Reversal of reserves no longer required.                                
                         


                                      25
<PAGE>   26

                                  SIGNATURES

        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 hereunto duly authorized, as of the 25th day
of March, 1997

THE LIBERTY CORPORATION                     By:   /s/  Hayne Hipp
-----------------------                           ------------------------
   Registrant                                          Hayne Hipp
                                                       President and Chief
                                                       Executive Officer

        Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated, as of the 25th day of March, 1997.


<TABLE>
<S>                                                          <C>    
By:      /s/ John P. Smith                                   *By:    /s/ William O. McCoy
         --------------------                                        --------------------
         John P. Smith                                               William O. McCoy
         Corporate Controller                                        Director

By:      /s/ H. Ray Eanes                                    *By:    /s/ Buck Mickel
         ----------------------                                      ---------------
         H. Ray Eanes                                                Buck Mickel
         Sr. Vice President Finance & Treasurer                      Director

*By:     /s/  Rufus C. Barkley, Jr.                          *By:    /s/ John H. Mullin III
         -------------------------                                   ---------------------- 
         Rufus C. Barkley, Jr.                                       John H. Mullin III
         Director                                                    Director

*By:     /s/ Edward E. Crutchfield                           *By:    /s/ Benjamin F. Payton
         -------------------------                                   ----------------------
         Edward E. Crutchfield                                       Benjamin F. Payton
         Director                                                    Director

*By:     /s/ John R. Farmer                                  *By:    /s/ J. Thurston Roach
         ------------------                                          ---------------------
         John R. Farmer                                              J. Thurston Roach
         Director                                                    Director

*By:     /s/ Lawrence M. Gressette, Jr.                      *By:    /s/ Martha G. Williams
         ------------------------------                              ----------------------
         Lawrence M. Gressette, Jr                                   *Martha G. Williams, as
         Director                                                    Special Attorney in Fact

By:      /s/ Hayne Hipp                                      *By:    /s/ Eugene E. Stone, IV
         --------------                                              ----------------------- 
         Hayne Hipp                                                  Eugene E. Stone, IV
         Director                                                    Director

*By:     /s/ W. W. Johnson
         ------------------
         W. W. Johnson
         Director
</TABLE>




                                      26

<PAGE>   27




                           Annual Report on Form 10-K


                            The Liberty Corporation


                               December 31, 1996



                               Index to Exhibits

<TABLE>
<CAPTION>
               Exhibits                                                                                          Page Number
               --------                                                                                          -----------


<S>          <C>                                                                                                     <C>  
 3.2         Bylaws, as amended through November 5, 1996                                                             28-32

11.          The Liberty Corporation and Subsidiaries Consolidated Earnings Per Share Computation                       33

13.          Portions of The Liberty Corporation Annual Report to Shareholders
               for the year ended December 31, 1996:

             Market for the Registrant's Common Stock and Related Security Stockholder Matters                          34
             Selected Financial Data                                                                                    35
             Management's Discussion and Analysis of Financial Condition and Results of Operations                   36-44
             Financial Statements and Supplementary Information:
               Consolidated Balance Sheets - December 31, 1996 and 1995                                              45-46
               Consolidated Statements of Income - For the three years ended December 31, 1996                          47
               Consolidated Statements of Cash Flows - For the three years ended December 31, 1996                      48
               Consolidated Shareholders' Equity - For the three years ended December 31, 1996                          49
               Notes to Consolidated Financial Statements - December 31, 1996                                        50-65
               Report of Independent Auditors                                                                           66

21.          The Liberty Corporation and Subsidiaries, List of Significant Subsidiaries                                 67

23.          Consent of Independent Auditors                                                                            68

24.          Powers of Attorney applicable for certain signatures of members of the Board of
             Directors in Registrant's 10-K filed for the year ended December 31, 1996.                                 69

27.          Financial Data Schedule

99.          Additional Exhibits
             A.  Annual Statement on Form 11-K for The Liberty  Corporation and Adopting Related
                    Employers' 401(k) Thrift Plan for the year ended December 31, 1996                               70-86
</TABLE>




                                      27