SECURITIES AND EXCHANGE COMMISSION
                          Washington, D. C. 20549
                                FORM 10-Q

              QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
                   OF THE SECURITIES EXCHANGE ACT OF 1934
                                              
 For the quarter ended March 31, 1998.            Commission File No. 0-10852

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

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

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

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


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

                               Yes _X_   No ___

Indicate the number of shares outstanding of the Registrant's common stock as
of the close of the period covered by this report.

                                119,918 shares
<PAGE>


<TABLE>									
<CAPTION>
                                                                       
SOUTHERN BANCSHARES (N.C.), INC AND SUBSIDIARY                                                     March 31,         December 31,
CONSOLIDATED BALANCE SHEETS                                                                          1998                1997
                                                                                                   ________            ________
(Dollars in thousands except per share data)                                                     (Unaudited)
S>                                                                                           <C>                     <C>
ASSETS									
Cash and due from banks                                                                             $24,175             $28,381
Federal funds sold                                                                                    8,225              10,240
Investment securities: 									 
   Held-to-maturity, at amortized cost (fair value $71,873 and $57,294, respectively)                70,886              56,281
   Available-for-sale, at fair value (amortized cost $91,477 and $100,978, respectively)            113,754             123,852
Loans                                                                                               354,206             349,353
   Less allowance for loan losses                                                                    (6,016)             (5,971)
Net loans                                                                                           _______             _______
                                                                                                    348,190             343,382
Premises and equipment                                                                               17,985              18,157
Accrued interest receivable                                                                           4,779               4,205
Intangible assets                                                                                     5,122               5,506
Other assets                                                                                            773                 748
                                                                                                    _______             _______
              Total assets                                                                         $593,889            $590,752
                                                                                                    =======             =======
LIABILITIES
Deposits:
   Noninterest-bearing                                                                             $ 64,055            $ 66,565
   Interest-bearing                                                                                 451,922             446,763
                                                                                                    _______             _______
Total deposits                                                                                      515,977             513,328
									 
Short-term borrowings                                                                                 6,236               6,826
Long-term obligations                                                                                 4,300               4,750
Accrued interest payable                                                                              3,932               4,394
Other liabilities                                                                                     6,431               6,470
                                                                                                    _______             _______
        Total liabilities                                                                           536,876             535,768
                                                                                                    _______             _______
SHAREHOLDERS' EQUITY
Series B non-cumulative  preferred  stock, no  par value; 408,728 shares authorized;
    404,946  shares  issued  and outstanding at March 31, 1998 and December 31, 1997                  1,976               1,976
Series C non-cumulative preferred stock, no par value;  43,631 shares authorized and
    43,631  shares  issued  and  outstanding at March 31, 1998 and December 31, 1997                    578                 578
Common  stock, $5  par  value;  158,485  shares authorized and 119,918 shares issued
   and outstanding at March 31, 1998 and December 31, 1997                                              600                 600
Surplus                                                                                              10,000              10,000
Retained earnings                                                                                    29,155              26,733
Unrealized gain on securities available-for-sale, net of tax                                         14,704              15,097
                                                                                                    _______             _______
        Total shareholders' equity                                                                   57,013              54,984
                                                                                                    _______             _______
              Total liabilities and shareholders' equity                                           $593,889            $590,752
                                                                                                    =======             =======

The accompanying notes are an integral part of these consolidated financial statements.					 				 
</TABLE>
                                                                         
<TABLE>
                                                                  
SOUTHERN BANCSHARES (N.C.), INC. AND SUBSIDIARY                                                 (Unaudited)
CONSOLIDATED STATEMENTS OF INCOME                                                       Three Months Ended March  31,
<CAPTION>                                                                                   1998            1997
(Dollars in thousands except share and per share data)
<S>                                                                                    <C>             <C>
Interest income:
   Loans                                                                                   $7,532          $6,906
   Investment securities:									 
     U. S. Government                                                                       1,735           1,587
     State, county and municipal                                                              481             533
     Other                                                                                    161             119
                                                                                            _____           _____
        Total investment securities interest income                                         2,377           2,239
  Federal funds sold                                                                          184             110
                                                                                            _____           _____
           Total interest income                                                           10,093           9,255
									 
Interest expense:
   Deposits                                                                                 4,656           4,309
   Short-term borrowings                                                                       70              52
   Long-term obligations                                                                       76               2
                                                                                            _____           _____
           Total interest expense                                                           4,802           4,363
                                                                                            _____           _____
              Net interest income                                                           5,291           4,892
   Provision for loan losses                                                                   60              60
                                                                                            _____           _____
                 Net interest income after provision for loan losses                        5,231           4,832
					 		 		 
Noninterest income:
    Service charges on deposit accounts                                                       762             648
    Other service charges and fees                                                            246             208
    Investment securities gains, net                                                        1,788           3,534
    Insurance commissions                                                                      19              17
    Gain (loss) on sale of loans                                                                1             (10)
    Other                                                                                     117              73
                                                                                            _____           _____
         Total noninterest income                                                           2,933           4,470
					 		 		 
Noninterest expense:
    Personnel                                                                               2,285           2,088
    Intangibles amortization                                                                  384             402
    Data processing                                                                           432             353
    Furniture and equipment                                                                   332             384
    Occupancy                                                                                 378             333
    FDIC insurance assessment                                                                  37              27
    Charitable contributions                                                                  -             4,072
    Other                                                                                     940             806
                                                                                            _____           _____
         Total noninterest expense                                                          4,788           8,465
                                                                                            _____           _____
Income before income taxes                                                                  3,376             837
Income taxes                                                                                  809              80
                                                                                            _____            ____
         Net income                                                                        $2,567            $757
                                                                                            =====            ====
Per share information:
  Net income applicable to common shares                                                   $20.58           $5.48
  Cash dividends declared on common shares                                                    .38             .37
  Weighted average common shares outstanding                                              119,918         119,918
                                                                                          =======         =======

The accompanying notes are an integral part of these consolidated financial statements.									 
</TABLE>		 							 

<PAGE>
                                                          
SOUTHERN BANCSHARES (N.C.), INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                                 
<TABLE>                                                          
<CAPTION>                                                                                      
                                                                                                 (Unaudited)
                                                                                         Three months ended March 31,
(Thousands)                                                                                  1998            1997
<S>                                                                                       <C>             <C>
OPERATING ACTIVITIES:                                                                                  
     Net income                                                                            $2,567            $757
     Adjustments to reconcile net income to net cash
         provided by operating activities:
            Provision for loan losses                                                          60              60
            Contribution expense for donation of marketable equity securities                 -             4,072
            Gain on contribution of marketable equity securities                              -            (3,529)
            Gains on sales and issuer calls of securities                                  (1,788)             (5)
            Loss on sale and abandonment of premises and equipment                              3              27
            Net accretion of discounts on investments                                         (19)            (21)
            Amortization of intangibles                                                       384             402
            Depreciation                                                                      334             245
            Net increase in accrued interest receivable                                      (574)           (481)
            Net (decrease) increase in accrued interest payable                              (462)            477
            Net (increase) decrease in other assets                                           (25)            864
            Net decrease in other liabilities                                                 (39)           (219)
                                                                                            _____           _____
NET CASH PROVIDED BY OPERATING ACTIVITIES                                                     441           2,649
                                                                                            _____           _____
INVESTING ACTIVITIES:
   Proceeds from maturities and issuer calls of investment securities available-for-sale   16,000             -
   Proceeds from maturities and issuer calls of investment securities held-to-maturity      1,198          14,703
   Proceeds from sales of investment securities available-for-sale                          1,975             -
   Purchases of investment securities held-to-maturity                                    (15,803)        (11,010)
   Purchases of investment securities available-for-sale                                   (6,463)         (6,264)
   Net increase in loans                                                                   (4,868)        (11,014)
   Additions to premises and equipment                                                       (165)         (1,226)
                                                                                           ______           _____
NET CASH USED IN INVESTING ACTIVITIES                                                      (8,126)        (14,811)
                                                                                           ______           _____
FINANCING ACTIVITIES:                                                                                   
   Net decrease in demand and interest bearing demand deposits                             (1,954)         (8,599)
   Net increase in time deposits                                                            4,603           8,929
   Net (repayments) proceeds of long-term obligations                                        (450)          4,700
   Net (repayments) proceeds of short-term borrowings                                        (590)          1,668
   Cash dividends paid                                                                       (145)           (143)
                                                                                           ______          ______
NET CASH PROVIDED BY FINANCING ACTIVITIES                                                   1,464           6,555
                                                                                           ______          ______
NET DECREASE IN CASH AND CASH EQUIVALENTS                                                  (6,221)         (5,607)
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF YEAR                                         38,621          32,465
                                                                                           ______          ______
CASH AND CASH EQUIVALENTS AT THE END OF PERIOD                                            $32,400         $26,858
                                                                                           ======          ======
SUPPLEMENTAL DISCLOSURES OF CASH PAID DURING THE PERIOD FOR:                             
    Interest                                                                               $5,264          $3,882
    Income taxes                                                                             $844             $96
                                                                                           ======           =====
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
Unrealized gain (loss) on securities available-for-sale                                     ($597)          ($996)
                                                                                              ===             ===

The accompanying notes are an integral part of these consolidated financial statements.                     
</TABLE>                                                            

<PAGE>								 		   																									
																																			
SOUTHERN BANCSHARES (N.C.), INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY 										
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997

<TABLE>
<CAPTION>

                                          Preferred Stock                                           Unrealized
                                      _______________________      Common                            gain on
                                      Series B       Series C      Stock                            securities
                                      ________       ________      _____                            available-      Total
(dollars in thousands                                                                 Retained      for-sale,    Shareholders'
  except per share data)            Shares Amount Shares Amount Shares Amount Surplus Earnings     net of taxes     Equity
                                    _____________ _____________ _____________ _______ ________     ____________     ______
<S>                               <C>     <C>    <C>    <C>    <C>    <C>    <C>     <C>         <C>            <C>
																																			
BALANCE, DECEMBER 31, 1996         407,752 $1,986 43,631 $578   119,918 $600  $10,000  $20,718       $10,896       $44,778

Net income                                                                                 757                         757
                                                                                              
Cash dividends:
 Common stock ($.375 per share)                                                            (43)                        (43)
 Preferred B  ($.22  per share)                                                            (90)                        (90)
 Preferred C  ($.22  per share)                                                            (10)                        (10)

Change in unrealized gain on
 securities available-for-sale,
 net of taxes                                                                                           (657)         (657)
                                   _______  _____ ______  ___   _______  ___   ______   ______         _____        ______
BALANCE, MARCH 31, 1997            407,752 $1,986 43,631 $578   119,918 $600  $10,000  $21,332       $10,239       $44,735
                                   =======  ===== ======  ===   =======  ===   ======   ======        ======        ======

BALANCE,  DECEMBER 31, 1997        404,946 $1,976 43,631 $578   119,918 $600  $10,000  $26,733       $15,097       $54,984
																																			
Net income                                                                               2,567                       2,567
																																			
Cash dividends:																																			
  Common stock ($.38 per share)                                                            (46)                        (46)
  Preferred B  ($.22 per share)                                                            (89)                        (89)
  Preferred C  ($.22 per share)                                                            (10)                        (10)

Change in unrealized gain on
  securities available-for-sale,
  net of taxes                                                                                          (393)         (393)
                                   _______  _____ ______  ___   _______  ___   ______   ______        ______        ______
BALANCE, MARCH 31, 1998            404,946 $1,976 43,631 $578   119,918 $600  $10,000  $29,155       $14,704       $57,013
                                   =======  ===== ======  ===   =======  ===   ======   ======        ======        ======

The accompanying notes are an integral part of these consolidated financial statements.																																			
</TABLE>																																			


<PAGE>	 	 												
														
SOUTHERN  BANCSHARES (N. C.), INC. AND SUBSIDIARY
Notes to consolidated financial statements														
(Dollars in thousands)
														
Note 1. Summary of significant accounting policies

BancShares

    Southern BancShares (N. C.), Inc. ("BancShares") is the holding company for
Southern Bank and Trust Company ("Southern"), which operates 42 banking offices
in  eastern North Carolina.  Southern, which began operations in January, 1901,
has a wholly-owned subsidiary: Goshen, Inc. which acts as agent for credit life
and  credit accident and health insurance written in connection with loans made
by  Southern.  BancShares  and Southern are headquartered in Mount Olive, North
Carolina.
														
Principles of Consolidation

    The  consolidated  financial statements include the accounts of BancShares,
and  its  wholly-owned  subsidiary,  Southern.  The statements also include the
accounts  of  Goshen, Inc., a wholly-owned subsidiary of Southern.  BancShares'
financial resources are primarily provided by dividends from Southern and there
are  no  material  differences  between  the results of operations or financial
position  of  BancShares or of Southern.  All significant intercompany balances
have been eliminated in consolidation.

Basis of Financial Statement Presentation

    The  preparation  of  financial  statements  in  conformity  with generally
accepted  accounting  principles  requires  management  to  make  estimates and
assumptions  that  affect  the  reported  amounts of assets and liabilities and
disclosure  of  contingent  liabilities at the date of the financial statements
and  the reported amounts of revenues and expenses during the reporting period.
Actual  results  could  differ  from  those  estimates.  The  most  significant
estimates  made  by BancShares in the preparation of its consolidated financial
statements  are  the  determination  of  the  allowance  for  loan  losses, the
valuation of other real estate, the valuation allowance for deferred tax assets
and  fair  value estimates for financial instruments.  The statements should be
read in conjunction with the consolidated financial statements and accompanying
notes  for  the  year ended December 31, 1997, incorporated by reference in the
1997 Annual Report on Form 10-K.

Reclassifications

    Certain  prior  year  balances  have  been  reclassified  to conform to the
current  year presentation.  Such reclassifications had no effect on net income
or shareholders' equity as previously reported.

Mortgage Servicing Rights

    The  estimated  value  of  the  right  to service mortgage loans for others
("MSR's")  is  included  in  other  assets  on BancShares' consolidated balance
sheet.  Capitalization  of  the MSR's occurs when the underlying loans are sold
or  securitized  or  when  rights  to  service  mortgage  loans from others are
acquired.  Capitalized  MSR's  are  amortized  into  income  over the projected
servicing  life  of  the  underlying loans.  Capitalized MSR's are periodically
reviewed  for  impairment  based  on  the excess of the carrying amount of such
rights   over   their   fair  value.  For  purposes  of  measuring  impairment,
capitalized MSR's are stratified on the basis of one or more of the predominant
risk  characteristics  of  the  underlying  loans, including  loan  type, term,
interest  rate  and  origination  date.  Fair  value is estimated using current
commitment  prices  from  investors  or  current  quoted  market prices to sell
similar  products.  During  the  three  months ended March 31, 1998, BancShares
acquired  the rights to service $51 million in mortgage loans from an affiliate
institution  (see  note  8) for $522.  At March 31, 1998 and December 31, 1997,
MSR's  amounted  to  $632  and  $137,  respectively.  There  was  no  valuation
allowance for MSR's at March 31, 1998 or December 31, 1997.

Management Opinion

    The consolidated financial statements in this report are unaudited.  In the
opinion  of  management, all adjustments (none  of which were other than normal
accruals) necessary  for  a  fair  presentation  of  the financial position and
results of operations for the periods presented have been included.

<PAGE>                                                                  

<TABLE>							 												
<CAPTION>

SOUTHERN BANCSHARES (N.C.), INC. AND SUBSIDIARY
Notes to consolidated financial statements
(Dollars in thousands except share and per share data)


Note 2.  Investment securities                                 March 31, 1998                          DECEMBER 31, 1997
                                                           Gross       Gross    Estimated             Gross      Gross   Estimated
                                               Amortized Unrealized  Unrealized   Fair   Amortized  Unrealized Unrealized  Fair
                                                  Cost      Gains      Losses     Value     Cost       Gains     Losses    Value
                                                 _____    _________   ________   ______   _______    ________   ________ _________
<S>                                              <C>      <C>        <C>        <C>       <C>        <C>       <C>        <C>
    SECURITIES HELD-TO-MATURITY:																			
      U. S. Government                           $48,962        148      (33)    $49,077   $33,969       122        -      $34,091
      Obligations of states
       and political subdivisions                 21,824        872       -       22,696    22,212       890        -       23,102
      Corporate securities                           100         -        -          100       100         1        -          101
                                                  ______       ____      ____     ______    ______     _____       ___     _______
                                                  70,886      1,020      (33)     71,873    56,281     1,013        -       57,294
                                                  ======      =====      ====     ======    ======     =====       ===     =======
    SECURITIES AVAILABLE-FOR-SALE:						 													
      U. S. Government                            71,475        163       (4)     71,634    82,471       130       (9)      82,592
      Marketable equity securities                 9,698     21,570       -       31,268     8,119    22,183       (8)      30,294
      Obligations of states
       and political subdivisions                  8,411        490       (2)      8,899     8,411       527        -        8,938
      Mortgage-backed securities                   1,893         60       -        1,953     1,977        51        -        2,028
                                                  ______     ______      ____     ______    ______    ______      ___      _______
                                                  91,477     22,283       (6)    113,754   100,978    22,891      (17)     123,852
                                                  ======     ======      ====     ======    ======    ======      ===      =======
   				 		 		 		 		 		 		 			
         TOTALS                                 $162,363    $23,303      (39)   $185,627  $157,259   $23,904     ($17)    $181,146
                                                 =======     ======     ====     =======   =======    ======      ===      =======
</TABLE>								 											
 																			
<PAGE>
																			
SOUTHERN BANCSHARES (N.C.), INC. AND SUBSIDIARY
Notes to consolidated financial statements
(Dollars in thousands except share and per share data)
																			
<TABLE>
<CAPTION>                                                     March 31,       December 31,
                                                                1998              1997
                                                                ____              ____
<S>                                                           <C>               <C>
Note 3. LOANS


   Commercial, financial and agricultural                     $85,254            $84,281
   Real Estate:
     Construction                                               4,664              5,209
     Mortgage:
       One to four family residential                         107,389            106,444
       Commercial                                              59,128             58,056
       Equityline                                              27,746             27,759
       Other                                                   31,782             27,868
   Consumer                                                    33,500             35,780
   Lease financing                                              4,743              3,956
                                                              _______            _______
    Total loans                                               354,206            349,353
                                                              =======            =======

   Loans held for sale                                       $  5,584           $  3,019
   Loans serviced for others                                 $129,047           $ 78,426
</TABLE>
																			
<TABLE>
<CAPTION>
                                                            Three Months Ended March 31,
                                                            ____________________________
                                                                 1998            1997
                                                                 ____            ____
<S>                                                            <C>             <C>
Note 4. ALLOWANCE FOR LOAN LOSSES

   Balance at beginning of year                                $5,971           $6,163
   Provision for loan losses                                       60               60
   Loans charged off                                              (41)             (57)
   Loan recoveries                                                 26               79
                                                                _____            _____
   Balance at end of the period                                $6,016           $6,245
                                                                =====            =====
</TABLE>
<PAGE>

SOUTHERN BANCSHARES (N.C.), INC. AND SUBSIDIARY
Notes to consolidated financial statements
(Dollars in thousands except share and per share data)

<PAGE>
<TABLE>
<CAPTION>                                         March 31,    December 31,
                                                    1998           1997
                                                    ____           ____

<S>                                              <C>              <C>
Note 5. Premises and Equipment

    Land                                         $ 3,381          $3,377
    Buildings and improvements                    14,337          14,292
    Furniture and equipment                        6,499           6,387
    Construction-in-progress                          11              90
                                                  ______          ______
                                                  24,228          24,146
        Less: accumulated depreciation            (6,243)         (5,989)
                                                  ______          ______
                                                 $17,985         $18,157
                                                  ======          ======
</TABLE>

Note 6. Earnings per common share

   Earnings  per  common  share  are  computed by dividing income applicable to
   common  shares  by  the weighted average number of common shares outstanding
   during the period.  Income applicable to common shares represents net income
   reduced  by  dividends  paid  to  preferred shareholders.  BancShares had no
   potentially  dillutive  securities  during  1998  or  1997, so  there  is no
   difference  in  the  computation of basic and diluted earnings per share for
   the periods presented.

<TABLE>
<CAPTION>
                                           Three Months Ended March 31,
                                           ____________________________
                                                 1998         1997
                                                 ____         ____
<S>                                             <C>         <C>
   Net income                                  $2,567         $757
    Less: Preferred dividends                     (99)        (100)
                                                 ____         ____
   Net income applicable to common shares      $2,468         $657
                                                =====         ====
   Weighted average common shares
      outstanding during the period           119,918      119,918
</TABLE>                                      =======      =======

<PAGE>
																			
SOUTHERN BANCSHARES ((N.C.), INC. AND SUBSIDIARY
Notes to consolidated financial statements
(Dollars in thousands except share and per share data)

Note 7. COMPREHENSIVE INCOME

    In  June  1997, the  FASB  issued  Statement  130, "Reporting Comprehensive
Income".  Statement  130  establishes  standards  for  reporting and display of
comprehensive  income  and  its  components  in  a  full set of general purpose
financial statements.  Accordingly, BancShares adopted Statement 130 in 1998.

    During  the  three  months  ended  March  31, 1998  and 1997, comprehensive
income, which  consisted  of net income and changes in net unrealized gains and
losses,   net   of  applicable  tax  effects,  amounted  to  $2,174  and  $100,
respectively.



Note 8. RELATED PARTIES

    BancShares  has  entered  into  various service contracts with another bank
holding  company  and  its subsidiary (the "Corporation").  The Corporation has
two  significant  shareholders,   who  also  are  significant  shareholders  of
BancShares.  The first significant shareholder is a director of BancShares and,
at  March  31, 1998,  beneficially  owned  32,284  shares, or 26.92 percent, of
BancShares' outstanding common stock  and  22,171  shares, or  5.47 percent, of
BancShares' outstanding Series B preferred stock.  At the same date, the second
significant shareholder beneficially owned  27,577 shares, or 23.00 percent, of
BancShares' outstanding common stock, and  17,205  shares, or  4.24 percent, of
BancShares' Series B preferred stock.  The above totals include 17,205 Series B
preferred shares, or 4.24 percent, that are considered to be beneficially owned
by  both  of  the  shareholders  and,  therefore, are included in each of their
totals.
						
    These  two significant shareholders are directors and executive officers of
the  Corporation and at March 31, 1998, beneficially owned 2,553,443 shares, or
28.29  percent,  and  1,563,591  shares, or 17.32 percent, respectively, of the
Corporation's  outstanding  Class  A common stock, and 633,171 shares, or 36.10
percent,   and   155,874   shares,  or   8.89  percent,  respectively,  of  the
Corporation's  outstanding  Class  B  common  stock.  The  above totals include
540,170  Class  A  common  shares,  or 5.98 percent, and 110,668 Class B Common
shares,  or  6.31 percent, that are considered to be beneficially owned by both
of  the  shareholders  and, therefore, are included in each of their totals.  A
subsidiary   of  the   Corporation  is  First-Citizens  Bank  &  Trust  Company
("First Citizens").

The  following  table  lists the various charges paid to the Corporation during
the three months ended:

<PAGE>
<TABLE>
<CAPTION>
                                        Three Months Ended March 31,
                                        ____________________________
                                           1998              1997
                                         ________          ________
<S>                                     <C>                C>

    Data and item processing              $529                $468
    Forms, supplies and equipment          106                  91
    Trustee for employee benefit plans      18                  16
    Consulting fees                         19                  19
    Trust investment services                5                   6
    Internal auditing services               1                  34
    Other services                          31                  30
                                          ____                ____
                                          $709                $664
                                          ====                ====

     Data  and  item  processing  expenses  include courier services, proof and
encoding, microfilming, check  storage, statement rendering and item processing
forms.  BancShares  also has a correspondent relationship with the Corporation.
Correspondent  account  balances  with the Corporation included in cash and due
from banks totaled $6,959 at March 31, 1998 and $10,071 at December 31, 1997.

     During  the  quarter  ended March 31, 1998, BancShares acquired the rights
to  service  $51  million in mortgage loans from an affiliate institution which
shares  the  same  two  significant  shareholders  as  both  BancShares and the
Corporation.

<PAGE>

SOUTHERN BANCSHARES (N.C), INC. AND SUBSIDIARY
MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL CONDITION AND RESULTS OF
  OPERATIONS - FIRST THREE MONTHS OF 1998 VS. FIRST THREE MONTHS OF 1997



INTRODUCTION

     In  the  first three months of 1998, the net income of Southern BancShares
increased  $1.8  million from $0.8 million in the first three months of 1997 to
$2.6  million in the first three months of 1998, an increase of 239.10 percent.
This  increase  resulted  primarily from a contribution expense of $4.1 million
which  was  partially  offset  by  a  securities  gain  of $3.5 million and the
resulting  reduction  in  income  tax related to the contribution of marketable
securities to a charitable foundation in the three months ended March 31, 1997.
In  the  three months ended March 31, 1998 BancShares also sold $0.2 million of
available for sale securities resulting in a gain of $1.8 million.

     Net income available to common shares per share for the first three months
of  1998 was $20.58 per common share, an increase of $15.10, or 275.55 percent,
from  $5.48  in 1997.  The return on average equity increased to 17.95 percent,
for  the  period ending March 31, 1998, from 6.66 percent for the period ending
March  31, 1997 and the return on average assets increased to 1.72 percent, for
the period ending March 31, 1998, from 0.56 percent for the period ending March
31, 1997.  At  March  31, 1998, BancShares' assets  totaled  $593.9 million, an
increase  of $3.1 million, or 0.53 percent, from the $590.8 million reported at
December  31, 1997.  During  this  three month period, net loans increased $4.8
million  or  1.40  percent, from  $343.4 million to $348.2 million.  During the
three months ended March 31, 1998 investment securities increased $4.5 million,
or  2.50  percent from $180.1 million at December 31, 1997 to $184.6 million at
March  31, 1998.  Total  deposits  increased $2.6 million, or 0.51 percent from
$513.3  million  at  December 31, 1997 to $516.0 at March  31, 1998.  The above
increases resulted from internal growth as there were no branch acquisitions or
new branches opened by Southern in the quarter ended March 31, 1998.

INTEREST INCOME

     Interest  and  fees on loans increased $0.6 million, or 9.06 percent, from
$6.9  million for the three months ended March 31, 1997 to $7.5 million for the
three  months  ended  March  31, 1998.  This increase was due to increased loan
volume.  Average  loans  for the three months ending March 31, 1998 were $352.1
million, an  increase  of  9.07  percent from $322.9 million for the prior year
three  month  period.  The yield on the loan portfolio was 8.56 percent in both
the three months ended March 31, 1998 and 1997.

     Interest  income  from investment securities, including U. S. Treasury and
Government  obligations, obligations of state and county subdivisions and other
securities  increased  $.1  million, or  6.16 percent, from $2.2 million in the
three  months  ended  March  31, 1997 to $2.4 million in the three months ended
March  31, 1998.  This increase was due to an increase in the volume of average
investment  securities  for  the  three  months  ended March 31, 1998 to $160.8
million  as  compared  to  $151.9 million for  the  1997  period.  The yield on
investment  securities  was  5.91 percent for both the three months ended March
31, 1998 and 1997.

     Interest  income  on  federal  funds  sold increased $.1 million, or 67.27
percent, from  $0.1  million  for the three months ended March 31, 1997 to $0.2
million  for  the  three  months ended March 31, 1998.  This increase in income
resulted primarily from the increase in the average federal funds sold to $13.7
million  for  the  three  months ended March 31, 1998 from $8.6 million for the
three  months ended March 31, 1997. Average federal funds sold yields were 5.37
percent for the three months ended March 31, 1998 an increase from 5.11 percent
for the three months ended March 31, 1997.

     Total  interest  income increased $0.8 million, or 9.05 percent, from $9.3
million  for  the  three  months  ended March 31, 1997 to $10.1 million for the
three  months  ended  March  31, 1998.  This  increase was the result of volume
increases.  Average  earning  asset  interest yields for the three months ended
March  31, 1998  and  March 31, 1997 were 7.59 percent.  Average earning assets
increased  from  $485.2  million  in  the  three months ended March 31, 1997 to
$531.8 million in the period ended March 31, 1998.  This $46.6 million increase
in  the  average earning assets resulted from the acquisition of three Wachovia
Bank  of  North  Carolina, N. A. branches having approximately $21.1 million in
deposits  in  May  1997, and  from  internal  growth  within the other Southern
branches.  BancShares  did  not  open  any  new  branches  or  purchase any new
branches during the quarter ended March 31, 1998.

INTEREST EXPENSE

     Total  interest expense increased $0.4 million or 10.06 percent, from $4.4
million  in the three months ended March 31, 1997 to $4.8 million for the three
months  ended  March  31, 1998.  The  principal reason for the increase was the
increased  average  interest  bearing  liabilities  from $427.4 million for the
quarter ended March 31, 1997 to $ 464.0 million for the quarter ended March 31,
1998.  BancShares' total  cost  of  funds  also  increased from 4.08 percent at
March  31, 1997 to 4.14 for the quarter ended March 31, 1998.  Average interest
bearing deposits were $453.1  million in the three months ended March 31, 1998,
an  increase of $31.8 million from the $421.3 million in the three months ended
March 31, 1997.  The increase in interest-bearing liabilities was primarily the
result of the 1997 branch purchases discussed above.

NET INTEREST INCOME

     Net  interest  income  was  up  $0.4  million, or  8.16 percent, from $4.9
million for the three months ended March 31, 1997 to $5.3 million for the three
months  ended March 31, 1998.  This increase was primarily due to the increased
earning asset volume resulting from the 1997 branch purchases discussed above.

The  net  interest  margin at March 31, 1998 was 3.45 percent, a decrease of 10
basis points from the 3.55 percent interest margin at March 31, 1997.

ASSET QUALITY AND PROVISION FOR LOAN LOSSES

     For  the  three  months ended March 31, 1998 and 1997 management added $.1
million  as  volume related additions to the provision for loan losses.  During
the  first  three  months of 1998 management charged-off loans totaling $41,000
and  received  recoveries  of $26,000, resulting in net charge-offs of $15,000.
During  the  same  period  in   1997, $57,000  in  loans  were  charged-off and
recoveries  of  $79,000  were received, resulting in net recoveries of $22,000.
The  increase  in  net charge-offs was primarily due to decreased recoveries in
1998.  The  following  table  presents  comparative Asset Quality ratios of the
company:


</TABLE>
<TABLE>
<CAPTION>                                                                                     					
                                                   March 31,    December 31,
                                                     1998          1997
<S>                                              <C>            <C>
Ratio of annualized net loans charged off
       to average loans                               .02%           .07%

Allowance for loan losses
       to loans                                      1.70%          1.71%

Non-performing loans
       to loans                                       .34%           .20%

Non-performing loans and assets
        to total assets                               .21%           .13%

Allowance for loan losses
        to non-performing loans                    504.27%        857.90%

</TABLE>

<PAGE>                              

     The  ratio of net charge-offs to average loans outstanding decreased to an
annualized .02  percent  for  the quarter ended March 31, 1998 from .07 percent
for  the  year ended December 31, 1997 primarily due to increased recoveries of
loans  previously  charged off.  The allowance for loan losses represented 1.70
percent  of  loans, at  March  31, 1998, a  decrease  of 1 basis point from the
December 31, 1997 ratio of 1.71 percent.  Loans increased $4.9 million, or 1.39
percent, from December 31, 1997 to March 31, 1998.

     The increase in the ratio of nonperforming loans to loans from .20 percent
at December 31, 1997 to .34 percent at March 31, 1998 is the result of a slight
performance  decline  in the loan portfolio.  Nonperforming loans and assets to
total  assets  increased  to  .21 percent at March 31, 1998 from .13 percent at
December  31, 1997.  The  allowance  for  loan  losses  to  nonperforming loans
represented 504.27 percent of nonperforming loans at March 31, 1998, a decrease
from  the  857.90 percent at December 31, 1997.  This decrease is primarily the
result  of an increase in nonperforming loans to $1.2 million at March 31, 1998
from  $0.7  million at December 31, 1997.  The nonperforming loans at March 31,
1998  included $0.1 million of nonaccrual loans, $1.1 million of accruing loans
90  days  past  due and no restructured loans.  Other real estate at both March
31, 1998 and December 31, 1997 was $48,000.

     Management considers the March 31, 1998 allowance for loan losses adequate
to  cover the losses and risks inherent in the loan portfolio at March 31, 1998
and  will continue to monitor its portfolio and to adjust the relative level of
the  allowance  as  needed.  BancShares' impaired loans were approximately $0.1
million  at  March  31,  1998.  At  March  31, 1998, BancShares  has  no  loans
classified  for  regulatory  purposes  as  loss  or doubtful and less than $1.0
million  of  loans  classified as substandard.  Management actively maintains a
current  loan watch list and knows of no other loans which are material and (i)
represent  or  result  from trends or uncertainties which management reasonably
expects  will  materially impact future operating results, liquidity or capital
resources,  or  (ii) represent material credits about which management is aware
of  any  information  which  causes management to have serious doubts as to the
ability of such borrowers to comply with the loan repayment terms.

NONINTEREST INCOME

    Bancshares  had  a  decrease  of  $1.7 million in net investment securities
gains, for  the  quarter  ended  March  31, 1998  as compared to the prior year
quarter principally related to the donation in the three months ended March 31,
1997  of  available-for-sale  securities to the charitable foundation discussed
above.  BancShares  had  gains  on  the sale of mortgage loans of $1,000 in the
three months ended March 31, 1998 compared to $10,000 in losses on the sales of
mortgage  loans  in the three months ended March 31, 1997.  Income from service
charges   on   deposit  accounts, other  service  charges  and  fees, insurance
commissions  and  other  noninterest  income  not  detailed above increased $.2
million, or  20.93  percent, from $0.9 million for the three months ended March
31, 1997 to $1.1 million for the three months ended March 31, 1998.

NONINTEREST EXPENSE

     BancShares  had  a  decrease  in  charitable  contribution expense of $4.1
million  for  the  quarter  ended  March 31, 1998 as compared to the prior year
quarter  principally  related  to the available-for-sale securities donation in
the  three  months  ended  March  31, 1997 to provide additional funding to the
charitable foundation discussed above.

     Noninterest expense, other than contribution expense, including personnel,
occupancy, furniture  and  equipment, data processing, FDIC insurance and state
assessments, printing  and  supplies and other expenses, increased $0.4 million
or  8.99 percent, from $4.4 million in the three months ended March 31, 1997 to
$4.8 million in the three months ended March 31, 1998.

     This  increase  was  primarily  due to an increase in personnel expense of
$0.2  million, or  9.43  percent, from  $2.1  million  at March 31 1997 to $2.3
million  at  March  31, 1998  and  increased occupancy, furniture and equipment
expense and other volume related expenses resulting from branch acquisitions in
May 1997.

INCOME TAXES

     In the three months ended March 31, 1998 BancShares had income tax expense
of  $0.8  million, an  increase  of $0.7 million , or 911.25 percent, from $0.1
million  in  the  prior  year  period.  This increase was due both to increased
profitability   resulting   from  the  sale  of  available-for-sale  securities
discussed  above  and  the non-recurring tax benefits in 1997 of the charitable
donation in the three months ended March 31, 1997.  The resulting effective tax
rates  based  on the accruals for the three months ended in March 1998 and 1997
were  23.96  percent and 9.56 percent, respectively.  The effective tax rate in
1998  of 23.96 percent differs from the federal statutory rate of 35.00 percent
primarily due to tax exempt income.

SHAREHOLDERS' EQUITY AND CAPITAL ADEQUACY

     Sufficient  levels  of  capital are necessary to sustain growth and absorb
losses.  To  this  end, the  Federal Reserve Board, which regulates BancShares,
and  the  Federal Deposit Insurance Corporation, which regulates Southern, have
established minimum capital guidelines for the institutions they supervise.

     In  the  quarter  ended  March 31, 1997  BancShares borrowed an additional
$5.0  million and contributed an additional $5.0 million in capital to Southern
which improved each of Southern's capital ratios.

     Regulatory  guidelines define minimum requirements for Southern's leverage
capital  ratio.  Leverage capital equals total equity less goodwill and certain
other  intangibles and is measured relative to total adjusted assets as defined
by  regulatory  guidelines.  According to these guidelines, Southern's leverage
capital  ratio  at  March  31, 1998  was  6.01  percent.  At December 31, 1997,
Southern's  leverage  capital ratio was 6.02 percent.  Both of these ratios are
greater than the level designated as "well capitalized" by the FDIC.

     Southern  is  also  required  to  meet minimum requirements for Risk Based
Capital  ("RBC").  Southern's  assets, including  loan  commitments  and  other
off-balance  sheet  items, are weighted according to federal guidelines for the
risk considered inherent in each asset.  At March 31, 1998, the Total RBC ratio
was  12.68 percent.  At December 31, 1997 the RBC ratio was 12.81 percent. Both
of  these ratios are greater than the level designated as "well capitalized" by
the FDIC.

     The  regulatory capital ratios reflect increases in assets and liabilities
from the acquisitions Southern has made.  Each of the acquisitions required the
payment  of  a  premium  for  the  deposits  received.  Each  of these premiums
resulted  in  increased  intangible assets on BancShares' financial statements,
which is deducted from total equity in the ratio calculations.

     The unrealized gains on securities available for sale at March 31, 1998 of
$22.3  million  and  at  December 31, 1997 of $22.9 million, although a part of
total  shareholders' equity, are  not included in the calculation of either the
RBC  or  leverage  capital  ratios  pursuant to regulatory definitions of these
capital   requirements.  The   following   table   presents   capital  adequacy
calculations and ratios of Southern:

<TABLE>
<CAPTION>
                                         March 31,      December 31,
                                            1998            1997
<S>                                      <C>             <C>
Risk-based capital:
Tier 1 capital                           $ 33,922        $ 33,999
Total capital                              37,834          37,876
Risk-adjusted assets                      298,452         295,654
Average tangible assets                   564,455         564,633

Tier 1 capital ratio                      11.37%  (1)     11.50%  (1)
Total capital ratio                       12.68%  (1)     12.81%  (1)
Leverage capital ratio                     6.01%  (1)      6.02%  (1)

(1) These ratios exceed the minimum ratios required for a bank to be classified
    as "well capitalized," as defined by  the FDIC.
     
</TABLE>

     At  March  31,  1998  and   December  31,  1997, BancShares  was  also  in
compliance  with  its regulatory capital requirements and all of its regulatory
capital  ratios  exceeded the minimum ratios required to be classified as "well
capitalized".


<PAGE>
                          
LIQUIDITY

     Liquidity  refers  to the ability of Southern to generate sufficient funds
to  meet  its  financial  obligations  and  commitments  at  a reasonable cost.
Maintaining  liquidity  ensures  that  funds  will  be  available  for  reserve
requirements, customer  demand  for  loans, withdrawal  of deposit balances and
maturities  of other deposits and liabilities. Past experiences help management
anticipate  cyclical  demands  and amounts of cash required.  These obligations
can  be  met  by  existing  cash  reserves  or  funds  from  maturing loans and
investments, but in the normal course of business are met by deposit growth.

     In  assessing  liquidity, many  relevant factors are considered, including
stability  of  deposits, quality  of  assets, economy  of  the  markets served,
business   concentrations,  competition   and   BancShares'  overall  financial
condition.  BancShares' liquid  assets include cash and due from banks, federal
funds  sold and investment securities available-for-sale.  The liquidity ratio,
which  is defined as net cash plus short term and marketable securities divided
by net deposits and short term liabilities, was 31.81 percent at March 31, 1998
and 37.15 percent at December 31, 1997.

     The  Statement  of  Cash Flows discloses the principal sources and uses of
cash  from  operating, investing  and financing activities for the three months
ended  March  31, 1998  and  1997, respectively.  BancShares  has  no  brokered
deposits.  Jumbo  time  deposits are considered to include all time deposits of
$0.1 million or more.  BancShares has never aggressively bid on these deposits.
Almost all jumbo time deposit customers have other relationships with Southern,
including savings, demand and other time deposits, and in some cases, loans. At
March  31, 1998  and at December 31, 1997 jumbo time deposits represented 11.48
percent and 10.33 percent, respectively, of total deposits.

     Management believes that BancShares has the ability to generate sufficient
amounts of cash to cover normal requirements and any additional needs which may
arise, within  realistic  limitations, and management is not aware of any known
demands, commitments  or uncertainties that will affect liquidity in a material
way.
                                            

<PAGE>

ACCOUNTING AND OTHER MATTERS

     In  February  1998, the FASB issued Statement 132, "Employers' Disclosures
about Pensions and other Postretirement Benefits."  This statement standardizes
the disclosure requirements of pensions and other postretirement benefits. This
statement  does  not change any measurement or recognition provisions, and thus
will  not  materially  impact BancShares net income, but will result in altered
disclosures relating to pension obligations.

     The  FASB also issues exposure drafts for proposed statements of financial
accounting  standards.  Such  exposure  drafts  are subject to comment from the
public, to  revisions  by  the  FASB  and  to  final  issuance  by  the FASB as
statements  of financial accounting standards.  Management considers the effect
of  the  proposed  statements  on  the  consolidated  financial  statements  of
BancShares  and monitors the status of changes to issued exposure drafts and to
proposed effective dates.

     In 1997 BancShares developed a plan to deal with the "Year 2000 issue" and
contracted  with  an  industry consultant to review its overall exposure to the
Year  2000  issue.  The  Year  2000  issue relates to computer programs written
using  two  digits  rather  than  four  to define the applicable year.  In 1997
management  reviewed  the  results  of the consultant's analysis of BancShares'
data  processing  Year  2000 exposure and committed the human resources and the
financial  resources for BancShares to complete its resolution of the Year 2000
issue  in  1998.  The  total  cost  of  the  Year  2000  conversion project for
BancShares is estimated to be $.2 million and is being funded through operating
cash  flows.  BancShares  is  expensing  all costs associated with the required
systems  changes as the costs are incurred.  As of December 31, 1997, excluding
personnel  costs, $3,000  had  been  expensed.  As of March 31, 1998, excluding
personnel  costs, $6,000  additional  had been expensed.  As discussed above in
Note  7, Related Parties, BancShares utilizes the mainframe system of a related
bank  holding  company  and  its subsidiary (the "Corporation") for most of its
mission-critical  applications.  These  systems are currently being remediated,
replaced  or retired as part of the Corporation's Year 2000 compliance program.
BancShares'  is   closely  monitoring  the  Corporation's  progress.  Based  on
discussions with management of the Corporation, BancShares' management does not
expect  significant  increases in future data processing costs relating to Year
2000 compliance.

     In  the  second  quarter  of 1998, BancShares expects to acquire the $17.0
million deposit Enfield, North Carolina office of Enfield Savings Bank ("ESB").
The  deposits  and  loans  related  to  ESB's  second office are expected to be
transferred  and  assigned  to  the  Corporation  in  a purchase and assumption
transaction.  In  the  third  quarter  of  1998  BancShares expects to acquire,
subject  to regulatory approval, the $6.0 million deposit Gates, North Carolina
office  of  First-Citizens  Bank  &  Trust  Company  (see  note  8  of notes to
consolidated  financial  statements).  BancShares has received approval to open
de  novo branches in two new eastern North Carolina markets.  These offices are
planned to open in 1999.

     The  Board  of  Directors  of  BancShares  has  approved  the formation of
Southern Capital Trust I, a wholly-owned statutory business trust of BancShares
(the "Trust"), which will issue $20.0 million of Capital Securities maturing in
2028 (the  "Capital  Securities").  The  Trust  will invest the proceeds of the
$20.0  million  from  the  Capital Securities in Junior Subordinated Debentures
issued  by BancShares (the "Junior Debentures"),  which upon consolidation will
be  eliminated.  The  Junior  Debentures, with  a maturity of 2028, will be the
primary   assets  of  the  Trust.  With  respect  to  the  Capital  Securities,
BancShares   will   irrevocably   and  unconditionally  guarantee  the  Trust's
obligations.  The  Capital  Securities, once issued, will be included in Tier I
capital  for  regulatory  capital adequacy requirements.  The issuance of these
securities is expected to occur in the second quarter of 1998.


     Management  is  not  aware  of any other trends, events, uncertainties, or
current  recommendations  by  regulatory authorities that will have or that are
reasonably  likely  to have a material effect on BancShares' liquidity, capital
resources or other operations.
				
                                     
  SIGNATURES

Pursuant  to  the  requirements  of  the  Securities  Exchange Act of 1934, the
Registrant  has  duly  caused  this  report  to  be signed on its behalf by the
undersigned thereunto duly authorized.

                                             SOUTHERN  BANCSHARES  (N.C.), INC.
                                             /s/John C. Pegram, Jr.
Dated: May 6, 1998                           __________________________________
                                             John C. Pegram, Jr., President
                                             /s/David A. Bean
Dated: May 6, 1998                           __________________________________
                                             David A. Bean, Secretary/Treasurer