<PAGE>   1



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


(Mark One)
(X)      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

For the quarterly period ended                September 30, 1995
                               ---------------------------------------------

                                     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                          0-4554
                       ------------------------------------------------------

                             Bank South Corporation
             ------------------------------------------------------
             (Exact name of Registrant as specified in its charter)

       Georgia                                               58-1048216         
-----------------------------------------------------------------------------
(State or other jurisdiction of                          (I.R.S. Employer     
incorporation or organization)                         Identification Number) 

55 Marietta Street, Atlanta, Georgia                           30303
-----------------------------------------------------------------------------
(Address of principal executive offices)                     (Zip Code)

                                 (404) 529-4111
              ----------------------------------------------------
              (Registrant's telephone number, including area code)

                                 Not Applicable
  ---------------------------------------------------------------------------
  (Former name, former address, and former fiscal year, if changed since last
                                   report.)

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 each of the issuer's classes of
common stock, as of the latest practicable date.

Class:  Common Stock,               Shares Outstanding at October 31, 1995:
-----                               --------------------------------------  
          $5 par value              58,785,845 shares


                       Exhibit Index located on page 16.
<PAGE>   2



                             BANK SOUTH CORPORATION
                                     INDEX




<TABLE>
<CAPTION>
                                                                                                          Page No.
                                                                                                          --------
<S>              <C>                                                                                         <C>
PART I           FINANCIAL INFORMATION

 Item 1.         Consolidated Financial Statements

                 Consolidated Balance Sheets
                 at September 30, 1995 and December 31, 1994                                                  1

                 Consolidated Statements of Income
                 for the Three Months and Nine Months Ended
                 September 30, 1995 and 1994                                                                  2

                 Consolidated Statements of Cash Flows
                 for the Nine Months Ended September 30, 1995 and 1994                                        3

                 Notes to Consolidated Financial Statements                                                   4


 Item 2.         Management's Discussion and Analysis of
                 Financial Condition and Results of
                 Operations                                                                                   5



PART II          OTHER INFORMATION

 Item 1.         Legal Proceedings                                                                           13

 Item 2.         Changes in Securities                                                                       13

 Item 3.         Defaults Upon Senior Securities                                                             13

 Item 4.         Submission of Matters to a Vote of Security Holders                                         13

 Item 5.         Other Information                                                                           13

 Item 6.         Exhibits and Reports on Form 8-K                                                            13
                                                                                                               
</TABLE>
<PAGE>   3
              BANK SOUTH CORPORATION AND SUBSIDIARIES
                    CONSOLIDATED BALANCE SHEETS
                            (UNAUDITED)

<TABLE>
<CAPTION>
                                                                      September 30,              December 31,                   
                                                                         1995                       1994                           
                                                                      ------------               ------------
   <S>                                                                 <C>                    <C>    
   ASSETS                                                            (Thousands of dollars, except share data)
   Cash and due from banks:
      Interest-bearing deposits                                        $    26,495            $      64,048                 
      Non-interest bearing deposits and cash                               471,606                  359,473                 
                                                                       -----------            -------------
   Total cash and due from banks                                           498,101                  423,521                 
   Federal funds sold and securities purchased                                                                              
      under agreements to resell                                             7,625                   50,649                 
   Trading account securities                                                3,200                   75,431                 
   Investment securities available for sale                                872,873                  495,175                 
   Investment securities held to maturity (fair value $1,756,211                                                            
      at September 30, 1995 and $1,875,006 at December 31, 1994)         1,750,565                1,945,856                 
   Loans                                                                 4,190,859                3,954,490                 
   Less:  Unearned income                                                   13,827                   21,207                 
          Allowance for loan losses                                         77,978                   82,936                 
                                                                       -----------            -------------
   Net loans                                                             4,099,054                3,850,347                 
                                                                       -----------            -------------
   Premises and equipment, net                                             116,257                  113,557                 
   Customers' acceptance liability                                             517                      770                 
   Other real estate owned, net                                              2,442                    3,678                 
   Other assets                                                            303,195                  287,026                 
                                                                       -----------            -------------
   TOTAL ASSETS                                                        $ 7,653,829            $   7,246,010              
                                                                       ===========            =============
                                                                                                                         
   LIABILITIES                                                                                                           
   Non-interest bearing demand deposits                                $ 1,185,951            $   1,203,258              
   Interest-bearing deposits:                                                                                            
      NOW accounts                                                         785,443                  785,795              
      Money market accounts                                                518,747                  602,429              
      Savings accounts                                                     447,491                  484,913              
      Certificates of deposit $100,000 or more                             377,966                  364,584              
      Other time deposits                                                1,669,805                1,591,780              
                                                                       -----------            -------------
   Total interest-bearing deposits                                       3,799,452                3,829,501              
                                                                       -----------            -------------
   Total deposits                                                        4,985,403                5,032,759              
   Short-term borrowings:                                                                                                
      Federal funds purchased and securities                                                                             
         sold under agreements to repurchase                             1,097,025                  944,153              
      Commercial paper                                                      58,595                   49,773              
      Other short-term borrowings                                          475,000                  375,998              
                                                                       -----------            -------------
   Total short-term borrowings                                           1,630,620                1,369,924              
   Bank acceptances outstanding                                                517                      770              
   Long-term debt                                                          188,528                   89,413              
   Other liabilities                                                       173,096                  118,912              
                                                                       -----------            -------------
   TOTAL LIABILITIES                                                     6,978,164                6,611,778              
                                                                       -----------            -------------
                                                                                                                         
   SHAREHOLDERS' EQUITY                     1995             1994                                                        
   Preferred stock:                     ----------------------------                                                     
     Par value                         $         25    $          25                                                     
     Shares authorized                    5,000,000        5,000,000                                                     
     Shares issued and outstanding                -                -                                                     
   Common stock:                                                                                                         
     Par value                         $          5    $           5                                                     
     Shares authorized                  100,000,000      100,000,000                                                     
     Shares issued                       58,926,527       58,264,227       294,633                  291,321              
   Capital surplus                                                         188,758                  183,854              
   Retained earnings                                                       200,133                  167,582              
   Unrealized loss on investment securities                                                                              
     available for sale, net of tax                                         (3,460)                  (8,525)             
   Treasury stock (155,702 shares at September 30, 1995,                                                                 
      and none at December 31, 1994; at cost)                               (4,399)                       -              
                                                                       -----------            -------------
   TOTAL SHAREHOLDERS' EQUITY                                              675,665                  634,232              
                                                                       -----------            -------------
   TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                          $ 7,653,829            $   7,246,010              
                                                                       ===========            =============
</TABLE>

   See notes to consolidated financial statements.


                                       1
<PAGE>   4

                    BANK SOUTH CORPORATION AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF INCOME
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                            Three Months Ended September 30,       Nine Months Ended September 30,
                                                                 1995             1994                   1995           1994
                                                             -----------     -----------              ----------     -----------
  <S>                                                        <C>             <C>                      <C>            <C>
  INTEREST INCOME                                       (In thousands, except per share data)  (In thousands, except per share data)
  Interest and fees on loans:
    Taxable                                                  $    89,771     $    76,929              $  260,674     $   225,631
    Tax-exempt                                                     1,191             997                   3,520           2,607
                                                             -----------     -----------              ----------     -----------
  Total interest and fees on loans                                90,962          77,926                 264,194         228,238
                                                                                                                                
  Interest and dividends on investment securities                                                                               
    held to maturity                                                                                                            
    Taxable                                                       19,446          15,226                  59,930          31,633
    Tax-exempt                                                     7,925           6,168                  23,703          15,029
                                                             -----------     -----------              ----------     -----------
  Total interest and dividends on investment                                                                                    
    securities held to maturity                                   27,371          21,394                  83,633          46,662
                                                                                                                                
  Interest and dividends on investment securities                                                                               
    available for sale (taxable)                                  13,958           7,431                  38,691          28,911
                                                                                                                                
  Trading account securities                                          30           2,254                     991           5,263
  Federal funds sold and securities purchased                                                                                   
    under agreements to resell                                       575             880                   4,307           3,450
  Interest-bearing deposits                                          386             337                   1,290             913
  Other short-term investments                                        31           1,466                   1,109           2,377
                                                             -----------     -----------              ----------     -----------
  Total interest income                                          133,313         111,688                 394,215         315,814
                                                             -----------     -----------              ----------     -----------
  INTEREST EXPENSE                                                                                                              
  Interest on deposits:                                                                                                         
    NOW accounts                                                   5,457           4,837                  16,456          14,883
    Money market accounts                                          4,638           4,518                  14,273          12,351
    Savings accounts                                               2,616           3,028                   8,180           9,528
    Certificates of deposit $100,000 or more                       6,086           3,603                  17,708           8,488
    Other time deposits                                           25,012          17,596                  70,744          48,503
                                                             -----------     -----------              ----------     -----------
  Total interest on deposits                                      43,809          33,582                 127,361          93,753
  Interest on short-term borrowings:                                                                                            
    Federal funds purchased and securities                                                                                      
      sold under agreements to repurchase                         13,069           7,695                  41,618          18,203
    Other short-term borrowings                                   10,174           5,334                  31,781           7,947
                                                             -----------     -----------              ----------     -----------
  Total interest on short-term borrowings                         23,243          13,029                  73,399          26,150
  Interest on long-term debt                                       3,075           1,310                   6,462           4,488
                                                             -----------     -----------              ----------     -----------
  Total interest expense                                          70,127          47,921                 207,222         124,391
                                                             -----------     -----------              ----------     -----------
  NET INTEREST INCOME                                             63,186          63,767                 186,993         191,423
  Less:  Provision for loan losses                                     -             300                       -           7,297
                                                             -----------     -----------              ----------     -----------
  Net interest income after provision for                                                                                       
    loan losses                                                   63,186          63,467                 186,993         184,126
                                                             -----------     -----------              ----------     -----------
  NON-INTEREST INCOME                                                                                                           
  Trust income                                                     2,605           2,576                   7,814           7,486
  Service charges and fees on deposit accounts                    19,059          16,991                  55,079          47,979
  Electronic banking                                               5,698           4,659                  15,995          12,656
  Mortgage banking activities                                        960           1,026                   3,054           3,014
  Other service charges and fees                                   4,030           2,496                  10,885           8,032
  Institutional investment activities                              2,655             578                   7,470           2,733
  Retail investment activities                                       548             362                   1,449           1,234
  Securities gains (losses)                                          532            (162)                  2,706           1,689
  Other income                                                       508           1,853                   3,310           5,432
                                                             -----------     -----------              ----------     -----------
  Total non-interest income                                       36,595          30,379                 107,762          90,255
                                                             -----------     -----------              ----------     -----------
                                                                                                                                
  NON-INTEREST EXPENSE                                                                                                          
  Salaries and employee benefits                                  34,141          35,036                 104,024          97,557
  Occupancy                                                        5,418           4,965                  14,840          14,792
  Equipment                                                        4,503           4,063                  12,797          12,088
  Other real estate owned                                             49            (103)                   (889)            256
  Other expense                                                   28,244          25,819                  84,851          74,608
                                                             -----------     -----------              ----------     -----------
  Total non-interest expense                                      72,355          69,780                 215,623         199,301
                                                             -----------     -----------              ----------     -----------
  Income before income taxes                                      27,426          24,066                  79,132          75,080
  Income tax expense                                               6,349           2,335                  20,777          11,396
                                                             -----------     -----------              ----------     -----------
  NET INCOME                                                 $    21,077     $    21,731              $   58,355     $    63,684
                                                             ===========     ===========              ==========     ===========
                                                                                                                                
  Earnings per common share                                  $      0.35     $      0.37              $     0.98     $      1.10
  Cash dividends declared per share                                 0.14            0.13                    0.42            0.35
  Weighted average common shares and common                                                                                     
    share equivalents outstanding                                 59,657          58,765                  59,382          57,670
</TABLE>

  See notes to consolidated financial statements.




                                      2
<PAGE>   5

                    BANK SOUTH CORPORATION AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (UNAUDITED)
<TABLE>
<CAPTION>
                                                                                                  Nine Months Ended
                                                                                                    September 30,
                                                                                            1995                     1994
                                                                                        --------------           -------------
                                                                                                (Thousands of dollars)
<S>                                                                                     <C>                      <C>    
CASH FLOWS FROM OPERATING ACTIVITIES                                     
   Net income                                                                           $       58,355           $      63,684

   Adjustments to reconcile net income to net cash                       
       provided by (used in) operating activities                        
    Provision for loan losses                                                                        -                   7,297
    Provision for losses on other real estate owned                                                713                     787
    Depreciation and amortization expense -  premises and equipment                              9,384                   8,517
    Amortization expense - intangible and other assets                                           8,481                   8,596
    Deferred income tax expense                                                                   (692)                 (2,266)
    Net amortization of investment securities premiums and discounts                             1,829                   3,527
    Securities gains                                                                            (2,706)                 (1,689)
    Net unrealized valuation losses (gains) on trading account securities                          425                    (690)
    Net realized loss (gain) on sales of other assets                                            2,031                  (1,003)
    Net decrease (increase) in trading account securities                                       71,806                 (96,349)
    Net (increase) decrease in mortgage loans held for resale                                  (57,818)                 27,565
    Net increase in other assets                                                               (26,721)                (50,193)
    Net increase (decrease) in interest payable                                                 26,356                  (1,124)
    Net increase (decrease) in other liabilities                                                28,267                 (14,253)
                                                                                        --------------           -------------
     Total adjustments                                                                          61,355                (111,278)
                                                                                        --------------           -------------
                                                                         
     Net cash provided by (used in) operating activities                                       119,710                 (47,594)
                                                                                        --------------           -------------
                                                                         
CASH FLOWS FROM INVESTING ACTIVITIES                                     
    Net increase in federal funds sold and securities purchased          
      under agreements to resell                                                                43,024                  11,042
    Purchases of investment securities held to maturity                                        (23,343)             (1,223,336)
    Purchases of investment securities available for sale                                   (4,057,058)             (2,364,094)
    Proceeds from sales of investment securities available for sale                          3,546,446               2,806,244
    Proceeds from calls, maturities and redemptions of investment 
     securities held to maturity                                                               211,382                 133,177
    Proceeds from calls, maturities and redemptions of investment securities
      available for sale                                                                       148,432                 172,552
    Net increase in loans                                                                     (211,260)               (191,504)
    Purchases of premises and equipment                                                        (16,769)                (15,645)
    Proceeds from sales of premises and equipment                                                4,496                   6,707
    Proceeds from sales of other real estate owned                                               5,414                   8,340
    Proceeds from recoveries on loans previously charged off                                    13,638                  15,286
    Business combinations, net of cash acquired                                                      -                   7,872
                                                                                        --------------           -------------
                                                                                  
     Net cash used in investing activities                                                    (335,598)               (633,359)
                                                                                        --------------           -------------
                                                                                  
CASH FLOWS FROM FINANCING ACTIVITIES                                              
    Net (decrease) increase in deposits                                                        (47,356)                162,566
    Net increase  in short-term borrowings                                                     260,696                 529,909
    Repayments of long-term debt                                                                  (885)                 (8,354)
    Proceeds from issuance of long-term debt                                                   100,000                       -
    Proceeds from employee and director stock purchases                                         11,382                   9,899
    Cash dividends paid                                                                        (24,672)                (19,855)
    Proceeds from dividend reinvestment plan                                                       963
    Purchase of treasury stock                                                                  (8,528)
    Other, net                                                                                  (1,132)                  1,090
                                                                                        --------------           -------------

     Net cash provided by financing activities                                                 290,468                 675,255
                                                                                        --------------           -------------
                                                                                  
Net increase (decrease) in cash and due from banks                                              74,580                  (5,698)
Cash and due from banks at beginning of period                                                 423,521                 401,148
                                                                                        --------------           -------------

CASH AND DUE FROM BANKS AT END OF PERIOD                                                $      498,101           $     395,450
                                                                                        ==============           =============

SUPPLEMENTARY INFORMATION:
Income taxes paid                                                                       $       13,261           $      28,612
Income tax refunds received                                                                      6,909                     974
Interest paid                                                                                  180,866                 124,571
Non-cash transactions:
Loans transferred to other real estate owned                                                     6,733                   7,248
Loans to facilitate the sale of other real estate owned                                              -                     315
</TABLE>

See notes to consolidated financial statements.




                                      3
<PAGE>   6

                    BANK SOUTH CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 - General

The financial statements in this report have not been audited.  In the opinion
of management, all adjustments necessary for a fair presentation of the
financial position and results of operations for the interim periods have been
made.  All such adjustments are of a normal recurring nature.  These statements
should be read in conjunction with the 1994 Annual Report on Form 10-K for Bank
South Corporation (the "Registrant" or "Company").  Results of operations for
the nine months ended September 30, 1995, are not necessarily indicative of the
results of operations for the year ending December 31, 1995, or any interim
periods.  Certain previously reported amounts have been reclassified to conform
to the current presentation.

Note 2 - Business Combinations

On February 17, 1995, the Registrant acquired Gwinnett Bancshares, Inc.
("Gwinnett"), parent company of Gwinnett Federal Bank, FSB.  As a result of the
Gwinnett merger, each share of Gwinnett common stock issued and outstanding
immediately prior to the effective time of the Gwinnett merger was converted
into the right to receive 1.75 shares of the common stock of the Registrant.
The Registrant issued an aggregate 3,681,402 shares of the Registrant's common
stock to holders of Gwinnett common stock.  As of December 31, 1994, Gwinnett
had total assets of approximately $319.1 million and total shareholders' equity
of approximately $33.2 million.  For the year ended December 31, 1994, Gwinnett
reported a net loss of approximately $1.4 million.  The acquisition was
accounted for using the pooling-of-interests accounting method.  Accordingly,
prior periods have been restated.

On September 5, 1995, the Company announced a definitive agreement to merge
with NationsBank Corporation.  Each share of the Registrant's common stock will
be exchanged for 0.44 shares of NationsBank Corporation common stock.  The
merger is expected to close in January 1996, subject to shareholder and
regulatory approval, and is expected to be accounted for using the
pooling-of-interests accounting method.

Note 3 - Contingencies

Although no suit has been filed, the Company has been informed of a potential
claim for contribution to clean-up costs by a party currently incurring such
costs on a Superfund site under federal environmental laws.  The Company's
subsidiary, Bank South, in a fiduciary capacity, serves as trustee of trusts
which had an interest in a partnership that previously owned and operated a
plant at the site.  It is understood that such claim will be asserted against
Bank South in both its fiduciary and individual capacities.  The Company
intends to defend the claim vigorously.  The Company is not able to determine
what effect, if any, the claim may have on the Company's financial statements.



                                      4
<PAGE>   7


                    BANK SOUTH CORPORATION AND SUBSIDIARIES
                 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


Overview

The Company reported net income of $58.4 million, or $0.98 per share, for the
first nine months of 1995 compared to $63.7 million, or $1.10 per share, for
the same period in 1994. Net income for the third quarter of 1995 was $21.1
million, or $0.35 per share, compared to $21.7 million, or $0.37 per share for
the third quarter of 1994.  Contributing to the decrease in earnings in 1995
over 1994, among other factors, was a lower tax rate related to the reduction
of the federal valuation allowance under FAS 109 in 1994 and an increase in
non-interest expense due to NationsBank merger related expenses.  These
increases were partially offset by a decrease in the provision for loan losses
in the first nine months of 1995 compared to the same period of 1994.

On September 5, 1995, the Company announced a definitive agreement to merge
with NationsBank Corporation.  Each share of the Registrant's common stock will
be exchanged for 0.44 shares of NationsBank Corporation common stock.  The
merger is expected to close in January 1996, subject to shareholder and
regulatory approval, and is expected to be accounted for using the
pooling-of-interests accounting method.

Net Interest Income

Net interest income, on a taxable equivalent basis (t.e.), was $204.3 million
for the nine months ended September 30, 1995, 1.6 percent higher than the
$201.1 million for the same period in 1994.  Net interest income in the third
quarter of 1995 increased 1.9 percent over the third quarter of 1994, to $69.0
million from $67.7 million.  The increase in net interest income resulted
primarily from increased consumer and commercial loan volumes.  The net
interest margin, t.e., was 4.03 percent in the third quarter of 1995 compared
to 4.42 percent in the third quarter of 1994. The margin for the first nine
months of 1995 was 3.99 percent compared to 4.69 percent for the first nine
months of 1994.  The decline in the margin is primarily attributable to the
addition of investments at relatively narrow spreads and a higher cost of
funds.

Total average earning assets were $6.8 billion during the first nine months of
1995, an increase of $1.1 billion, or 19.3 percent, over the same period in
1994.  Total average loans were $4.1 billion for the first nine months of 1995,
an increase of 13.9 percent over the $3.6 billion of average loans for the
first nine months of 1994. Comprising approximately 76 percent of the loan
increase, commercial and installment loans increased $363.9 million, or 12.3
percent, over 1994.  The remaining increase in average loans was due to
mortgage loans which increased $100.6 million, or 27.4 percent, over 1994.

Investment securities held to maturity and investment securities available for
sale averaged $2.6 billion in the first nine months of 1995, an increase of
$802.2 million, or 44.2 percent, over the same period of 1994.  Average total
investments as a percentage of earning assets increased to 40.6 percent in the
first nine months of 1995, compared to 37.4 percent for the same period in
1994.  These additional investment securities were added to better utilize
capital.

Average transaction account deposit balances, including demand, savings and NOW
accounts, decreased $111.5 million, or 3.7%,  in the first nine months of 1995
compared to the same period in 1994. Consumer and other time deposits averaged
$1.4 billion in the first nine months of 1995, an increase of $217.4 million,
or 18.9 percent, over the same period in 1994.  Total average deposits
increased 6.2 percent to $5.04 billion for the first nine months of 1995 and
average short-term borrowings increased $749.0 million in the first nine months
of 1995 over 1994 to fund the addition of investment securities.

Provision for Loan Losses

During the first nine months of 1995, no provision for loan losses was
recognized due to the continued improvement in asset quality, lower than
expected credit losses, and higher than expected recoveries. During the same
period in 1994, the provision for loan losses was $7.3 million with $300,000
recorded in the third quarter of 1994.  See "Asset Quality" for further
discussion of the Allowance for Loan Losses.


                                      5
<PAGE>   8
                  ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                  (CONTINUED)



<TABLE>
<CAPTION>
COMPOSITION OF LOAN PORTFOLIO
TABLE 1
                                                                               December 31,
                             September 30,    ------------------------------------------------------------------------------
                                1995                1994                  1993               1992                1991
                          -----------------   -----------------    -----------------   -----------------   -----------------
                          Amount    Percent   Amount    Percent    Amount   Percent    Amount    Percent   Amount    Percent
                          -----------------   -----------------    -----------------   -----------------   -----------------
                                                                 (Thousands of dollars)
<S>                       <C>           <C>   <C>           <C>    <C>           <C>   <C>           <C>   <C>            <C>    
Commercial, financial 
  and agricultural        $1,075,364     26%  $1,048,187     27%   $  894,774     25%  $  902,228     31%  $1,032,436     34%
Real estate construction     235,347      6      218,985      6       137,741      4       86,709      3      314,016     10
Commercial mortgage          592,043     14      598,376     15       579,652     17      665,126     23      513,807     17
1-4 Family residential                                                                                                      
  mortgage                   759,951     18      672,515     17       574,548     16      521,489     18      546,153     18
Consumer                   1,493,096     35    1,384,573     34     1,306,783     37      755,184     25      643,186     20
Lease financing               35,058      1       31,854      1        15,517      1       13,956      -       21,721      1
                          -----------------   -----------------    -----------------   -----------------   -----------------
   Total loans            $4,190,859    100%  $3,954,490    100%   $3,509,015    100%  $2,944,692    100%  $3,071,319    100%
                          =================   =================    =================   =================   =================
</TABLE>

Note: During 1992 loans were reclassified between real estate construction and
commercial mortgages.





<TABLE>
<CAPTION>
ALLOWANCE FOR LOAN LOSS ALLOCATION
TABLE 2                                                         September 30, 1995  December 31, 1994
                                                                 Amount   Percent    Amount  Percent
                                                               --------------------------------------
                                                                        (Thousands of dollars)
<S>                                                            <C>          <C>    <C>           <C>         
Allowance for loan loss balance applicable to:
  Commercial, financial and
   agricultural                                                $   7,302      9%   $    9,057     11%
  Real estate construction                                         1,480      2         1,608      2
  Commercial mortgage                                              5,979      8         6,470      8
  1-4 Family residential mortgage                                  4,673      6         4,047      5
  Consumer                                                        12,101     16        12,112     14
  Lease financing                                                    125      -           111      -
  Unallocated                                                     46,318     59        49,531     60
                                                               -------------------------------------
     Total                                                     $  77,978    100%   $   82,936    100%
                                                               =====================================
</TABLE>



                                       6
<PAGE>   9


                    BANK SOUTH CORPORATION AND SUBSIDIARIES
                  ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                  (CONTINUED)


<TABLE>
<CAPTION>
ALLOWANCE FOR LOAN LOSSES                             Nine                             
TABLE 3                                           Months Ended                         Year Ended December 31,
                                                  September 30,    ------------------------------------------------------------
                                                      1995            1994              1993             1992           1991
                                                  -----------------------------------------------------------------------------
                                                                               (Thousands of dollars)
<S>                                               <C>              <C>              <C>               <C>            <C>
Balance at beginning of period                    $   82,936       $   88,482       $   78,713        $   86,909     $   93,267
Loans charged-off:                                                                                                
  Commercial, financial and agricultural              (2,014)          (9,280)          (5,498)          (21,331)       (57,278)
  Real estate construction                            (1,215)            (369)            (453)           (5,520)        (6,126)
  Commercial mortgage                                   (944)          (3,152)          (6,609)          (10,887)       (11,096)
  1-4 Family residential mortgage                     (2,779)          (5,445)          (6,849)           (5,276)        (7,057)
  Consumer                                           (11,636)         (18,212)          (6,425)           (7,900)        (8,903)
  Lease financing                                         (8)             (54)            (656)             (511)          (422)
  Other                                                    -                -                -              (267)             -
                                                  -----------------------------------------------------------------------------
Total loans charged-off                              (18,596)         (36,512)         (26,490)          (51,692)       (90,882)
                                                  -----------------------------------------------------------------------------
Recoveries on loans previously charged-off:                                                                       
  Commercial, financial and agricultural               1,810            5,178            2,732             4,500          1,398
  Real estate construction                               178            2,215              135               134            397
  Commercial mortgage                                  1,764            1,967            1,237               519            507
  1-4 Family residential mortgage                      2,567            3,210            1,900             1,043            566
  Consumer                                             7,280            8,034            3,993             4,283          3,858
  Lease financing                                         39              269              438               504             47
                                                  -----------------------------------------------------------------------------
Total loan recoveries                                 13,638           20,873           10,435            10,983          6,773
                                                  -----------------------------------------------------------------------------
Net loans charged-off                                 (4,958)         (15,639)         (16,055)          (40,709)       (84,109)
Net increase as a result of business combinations          -            2,496            5,431                 -              -
Provision for loan losses charged to expense               -            7,597           20,393            32,513         77,751
                                                  -----------------------------------------------------------------------------
Balance at end of period                          $   77,978       $   82,936       $   88,482        $   78,713     $   86,909
                                                  =============================================================================
                                                                                                                  
Total net loans at end of period                  $4,177,032       $3,933,283       $3,473,523        $2,939,574     $3,062,813
                                                                                                                  
Average loans outstanding during the period        4,069,158        3,654,236        3,013,021         3,004,525      3,335,177
                                                                                                                  
Allowance for loan losses to loans                                                                                
  outstanding at end of period                          1.87%            2.11%            2.55%             2.68%          2.84%
                                                                                                                  
Net loan charge-offs to average loans                                                                             
  outstanding during the period (annualized)            0.16             0.43             0.53              1.35           2.52
</TABLE>





                                       7
<PAGE>   10

                    BANK SOUTH CORPORATION AND SUBSIDIARIES
                  ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                  (CONTINUED)




<TABLE>
<CAPTION>
NON-PERFORMING ASSETS AND LOANS PAST DUE 90 DAYS OR MORE
TABLE 4
                                                                                       December 31,
                                                      September 30,  -----------------------------------------------
                                                         1995          1994          1993         1992        1991
                                                        ------------------------------------------------------------
                                                                           (Thousands of dollars)
<S>                                                     <C>          <C>           <C>          <C>         <C>
Non-accrual loans                                       $16,112      $ 23,562      $ 36,880     $ 78,343    $160,271
Renegotiated or restructured loans                            -           210         1,235        8,979       7,721
Other real estate owned                                   2,442         4,646         4,985       22,988      50,027
Other non-performing assets                                   -             0         2,417        2,646       3,646
                                                        -------      --------      --------     --------    --------
Total non-performing assets                             $18,554      $ 28,418      $ 45,517     $112,956    $221,665
                                                        =======      ========      ========     ========    ========

Loans 90 days or more past due
 on accrual status                                      $   280      $  2,197      $  1,846     $  5,420    $ 13,159
                                                                       
Potential problem loans                                  90,220       124,656       141,230      241,505     430,239

Non-performing assets to total
 loans, other real estate owned
 and other non-performing assets                           0.44%         0.72%         1.31%        3.81%       7.11%

Non performing assets and loans 90 days or more
 past due on accrual status to total loans, other
 real estate owned and other non-performing assets         0.45          0.78          1.36         4.00        7.54
</TABLE>





                                       8
<PAGE>   11



                    BANK SOUTH CORPORATION AND SUBSIDIARIES
                 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                  (CONTINUED)


Non-Interest Income

For the nine months ended September 30, 1995, non-interest income was $107.8
million, an increase of $17.5 million, or 19.4 percent, from the same period in
1994. Non-interest income of $36.6 million in the third quarter of 1995 was
$6.2 million, or 20.5 percent, higher than the third quarter of 1994.  Included
in non-interest income were gains on the sale of investment securities
available for sale of $2.7 million in the first nine months of 1995, compared
to $1.7 million for the first nine months of 1994. Gains on the sale of
investment securities available for sale were $532,000 in the third quarter of
1995, compared to a loss of $162,000 in the third quarter of 1994.  Excluding
these securities gains, non-interest income increased $16.5 million, or 18.6
percent, in the first nine months of 1995 over 1994 and $5.5 million, or 18.1
percent, in the third quarter of 1995 versus 1994.

In the first nine months of 1995, total service charges and fees, the largest
component of non-interest income, totaled $85.0 million, an increase of $13.3
million, or 18.6 percent, compared to the same period in 1994. Total service
charges and fees totaled $29.7 million in the third quarter of 1995, an
increase of $4.5 million, or 18.2%, over the third quarter of 1994.  The
increase in service charge income was primarily due to an increase in fees on
all deposit products, ATM, and debit card transactions.

Non-Interest Expense

Non-interest expense totaled $215.6 million for the nine months ended September
30, 1995, an increase of $16.3 million, or 8.2 percent, from the same period of
1994. Personnel costs increased $6.5 million or 6.6 percent over the same
period in 1994 due to additional locations and expanded banking hours.
Acquisition expenses increased $4.5 million and other general and
administrative expenses increased $4.6 million for the first nine months of
1995 compared to the same period in 1994, due to acquisitions and the
NationsBank merger, costs associated with expansion into mutual funds and
teleservices, and insurance premium tax.  Non-interest expense totaled $72.4
million in the third quarter of 1995, an increase of $2.6 million, or 3.7
percent, over the third quarter of 1994.  The primary driver of the increase
was $4.2 million in expenses related to the pending merger with NationsBank.
Excluding merger related expenses, non-interest expense declined $1.6 million
due to a decrease in both FDIC insurance expense and salaries and wage expense.

Income Taxes

Income tax expense was $20.8 million for the nine months ended September 30,
1995, or 26.3 percent of pre-tax income, compared to $11.4 million, or 15.2
percent of pre-tax income, for the same period in 1994.  Income tax expense was
$6.3 million, or 23.2 percent of pre-tax income, for the third quarter of 1995
compared to $2.3 million, or 9.7 percent of pre-tax income, for the third
quarter of 1994.  The 1994 rate was positively affected by the utilization of
$12.3 million and $3.1 million of the remaining Federal deferred tax valuation
allowance established at the beginning of 1993 for the nine months ended
September 30, 1994, and the third quarter of 1994 respectively.  In addition,
the Company reduced the state deferred tax valuation allowance by approximately
$5.0 million, of which approximately $1,305,000 reduced goodwill, during the
first nine months of 1995 leaving an allowance of $6.1 million at September 30,
1995.  Management evaluates the need for the valuation allowances on a
quarterly basis.

Asset Quality

Non-performing assets were $18.6 million at September 30, 1995, and $28.4
million at December 31, 1994.  Non-performing assets as a percent of total
loans and other real estate owned was 0.44 percent and 0.72 percent at
September 30, 1995, and December 31, 1994, respectively.



                                      9
<PAGE>   12

                    BANK SOUTH CORPORATION AND SUBSIDIARIES
                 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                  (CONTINUED)


Non-performing assets at September 30, 1995, included $16.1 million of
non-accrual and renegotiated loans, of which $10.0 million, or 62 percent, were
current as to both principal and interest.  Non-accrual and renegotiated loans
were $23.8 million at December 31, 1994.  Also included in non-performing
assets was other real estate owned, totaling $2.4 million at September 30,
1995, and $4.6 million at December 31, 1994.

Effective January 1, 1995, the Company adopted Financial Accounting Standards
Board Statement No. 114 ("FAS 114"), "Accounting by Creditors for Impairment of
a Loan" which was issued in May 1993 and amended in October 1994 by Statement
of Financial Accounting Standards Number 118, "Accounting by Creditors for
Impairment of a Loan - Income Recognition and Disclosures."  The impact of the
adoption of FAS 114 had no material effect on the Company's results of
operations and financial position.

Loans identified by management as potential problem assets (classified and
criticized loans) declined from 3.2 percent of total loans at December 31,
1994, to 2.2 percent of total loans at September 30, 1995.

Net loans charged off during the third quarter of 1995 were $1.9 million and
for the first nine months of 1995 were $5.0 million compared to $4.6 million
and $9.4 million during the comparable periods of 1994.  Further detail of loan
charge-offs and recoveries is presented in Table 3, "Allowance for Loan
Losses."

The allowance for loan losses was $78.0 million at September 30, 1995, compared
to $82.9 million at December 31, 1994.  The allowance for loan losses as a
percent of total loans was 1.87 percent at September 30, 1995, and 2.11 percent
at December 31, 1994. The allowance for loan losses as a percent of
non-performing loans was 484.0 percent at September 30, 1995, and 348.9 percent
at December 31, 1994.  Table 2, "Allowance for Loan Loss Allocation," presents
specific reserves by loan type and the general portion of the Company's total
allowance for loan losses.  In management's opinion, the allowance for loan
losses was adequate at September 30, 1995.

Contingencies

Although no suit has been filed, the Company has been informed of a potential
claim for contribution to clear-up costs by a party currently incurring such
costs on a Superfund site under federal environmental laws.  The Company's
subsidiary, Bank South, acts in a fiduciary capacity, serving as trustee of a
trust which has an interest in a partnership that previously owned and operated
a plant at the site.  It is understood that such claim will be asserted against
Bank South in both its fiduciary and individual capacities.  At this time the
Company has information about the possible claim and intends to defend the
claim vigorously.  The Company is not able to determine what effect, if any,
such a claim may have on the Company's financial statements.

Shareholders' Equity and Dividends

At September 30, 1995, shareholders' equity was at the highest level in the
Company's history at $675.7 million or 8.8 percent of total assets.  At
September 30, 1995, the Company's Tier 1 capital ratio was 10.56 percent, the
total risk-based capital ratio was 12.22 percent and the leverage ratio was
7.68 percent.  These ratios are in excess of regulatory requirements, as
presented in Table 5 - "Capital Adequacy."  In addition, Bank South, the
Company's bank subsidiary, was considered "well capitalized" by banking
regulators.

In the second quarter of 1995, the Board of Directors approved a plan to
repurchase as many as 5.5 million shares of Bank South common stock through the
open market and in privately negotiated transactions in order to provide
additional shares for the Company's benefit plans and other general corporate
purposes.  As of September 30, 1995, 155,702 shares were held as treasury stock
under this plan.



                                      10
<PAGE>   13


                   BANK SOUTH CORPORATION AND SUBSIDIARIES
                 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
               OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                 (CONTINUED)


<TABLE>
<CAPTION>
CAPITAL ADEQUACY
TABLE 5

                                     September 30, 1995              December 31, 1994
                                  Amount          Percent         Amount          Percent
                                  -----------------------         -----------------------
                                                  (Thousands of dollars)
   <S>                            <C>               <C>           <C>               <C>
   TIER 1 CAPITAL:
     Actual                       $   578,269       10.56%        $   524,547       11.00%
     Minimum required                 219,016        4.00             190,700        4.00
                                  -----------------------         -----------------------
     Excess                       $   359,253        6.56%        $   333,847        7.00%
                                  =======================         =======================
                                                                     
   TOTAL RISK-BASED CAPITAL:                                         
     Actual                       $   669,149       12.22%        $   605,701       12.70%
     Minimum required                 438,033        8.00             381,400        8.00
                                  -----------------------         -----------------------
     Excess                       $   231,116        4.22%        $   224,301        4.70%
                                  =======================         =======================
                                                                     
   TIER 1 CAPITAL LEVERAGE RATIO:                                    
     Actual                       $   578,269        7.68%        $   524,547        8.10%
     Minimum required *               226,748        3.00             194,170        3.00
                                  -----------------------         -----------------------
     Excess                       $   351,521        4.68%        $   330,377        5.10%
                                  =======================         =======================
</TABLE>


   * The regulatory requirement for leverage ratio is 3 percent to 5 percent.
     This is determined by the Federal Reserve using various criteria.  The
     Federal Reserve has not given the Company a determination of the rate for
     1995.




                                      11
<PAGE>   14


                    BANK SOUTH CORPORATION AND SUBSIDIARIES
                 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                  (CONTINUED)


In the third quarter of 1995, the Company's Board of Directors declared a 14
cent per share quarterly dividend, which was paid on October 2, 1995.  For the
first nine months of 1995, 42 cents per share was declared in dividends
compared to 35 cents per share for the same period in the prior year.

Liquidity

Liquidity represents the ability to provide funding for lending and investment
activities, as well as to cover deposit withdrawals and pay debt and operating
obligations.  Maintaining an adequate level of liquidity is an important
component of the Company's balance sheet management objectives.

At September 30, 1995, the Company's balance sheet continued to be liquid.  The
Company's core deposits, which are typically the most stable funds, were 110
percent of loans at September 30, 1995.  In addition, the Company's access to
debt markets improved during 1995 and 1994 due to upgrades in debt ratings,
continued improvements in asset quality, an increased level of capital, and
increased profitability.

Interest Rate Sensitivity and Asset Liability Management

Interest rate sensitivity refers to the responsiveness of interest-earning
assets and interest-bearing liabilities to changes in market interest rates.
To lessen the impact of rate movements, the balance sheet is structured such
that differences in repricing opportunities between assets and liabilities are
minimized.

Interest rate risk management, an important component of the overall risk
management program of the Company, includes monitoring of the balance sheet
composition and its associated sensitivity to interest rate changes.  Interest
rate sensitivity is monitored on a monthly basis by simulating net interest
income under varying interest rate scenarios.  The simulation model utilizes
maturity and repricing data on loans, investments, derivative financial
instruments, deposits and other interest-bearing liabilities to predict future
levels of net interest income.

The model measures net interest income, t.e., at risk as the difference between
net interest income under rising and falling rate environments and net interest
income, t.e., in an unchanged rate environment.  The Company's policy is to
actively manage the balance sheet so that net interest income simulated over a
12 month period under 100, 200 and 300 basis point changes in rates does not
vary adversely from net interest income produced in an unchanged rate
environment by more than 2 percent, 5 percent and 8 percent, respectively.  At
September 30, 1995, net interest income over 12 months from a 100, 200 and 300
basis point increase in interest rates would have decreased .8 percent, 2.4
percent and 4.8 percent, respectively.  A measure of longer-term interest rate
risk is the market value of portfolio equity, which is the present value of
asset cash flows less the present value of liability cash flows, adjusted for
off-balance sheet activity.  The sensitivity of the market value of portfolio
equity to changes in interest rates is measured in comparison to established
policy guidelines.  At September 30, 1995, the Company was in compliance with
its market value of portfolio equity policies.

It is the Company's policy to utilize derivative financial instruments,
primarily interest rate swap and interest rate cap agreements, to reduce its
exposure to interest rate fluctuations.  Income streams from underlying assets
and liabilities are offset with income received or paid on interest rate swaps
and caps.  Consequently, the overall impact of rate movements on net interest
income for the interest rate swap and cap portfolio must be evaluated in
conjunction with the impact of rate movements on the underlying assets which
the swaps are hedging.


                                      12
<PAGE>   15





                    BANK SOUTH CORPORATION AND SUBSIDIARIES
                 ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                  (CONTINUED)


Interest rate swap and cap agreements are used to modify the repricing
characteristics of interest-earning assets and interest-bearing liabilities.
These agreements generally involve the receipt of fixed-rate interest payments
in exchange for floating-rate interest payments over the life of the agreement
without an exchange of the underlying notional amount.  The differential to be
paid or received is accrued as interest rates change and is recognized as an
adjustment to interest expense or interest income related to the underlying
hedged item.  The related amount payable to, or receivable from, counterparties
is included in other liabilities or assets.  The fair value changes in the
interest rate swap and cap agreements are recognized in accordance with the
accounting for the underlying hedged item.

Interest rate swap or cap agreements are stated in terms of a notional amount,
which represents a value used to compute the amount of interest to be received
or paid under the agreement.  The Company's risk of loss relates to the ability
of the counterparties to make the interest payments required under the terms of
the agreements.  Counterparties must meet rigorous credit standards and be
approved by the Company's Capital Markets Credit Committee before entering into
interest rate swap and cap agreements. Counterparties to the contract must
provide collateral sufficient to protect the other party from significant
exposure to loss.

The notional balance for interest rate swaps and caps/floors at September 30,
1995, was $2.0 billion and $1.6 billion, respectively.  At December 31, 1994,
the Company had $2.1 billion in interest rate swaps and $1.5 billion in
interest rate caps/floors.  The net unrealized market value loss on total
off-balance sheet derivative financial instruments at September 30, 1995, was
approximately $32.0 million, or .75 percent of the total notional balance for
total off-balance sheet derivative financial instruments compared to a $90.4
million, or 2.4 percent, net unrealized market value loss on total off-balance
sheet derivative financial instruments at December 31, 1994.  The Company
terminated $713.9 million in interest rate swaps during the third quarter of
1995 resulting in a $3,000 gain.  The termination of the interest rate swaps
was due to the sale of the underlying securities.

PART II. OTHER INFORMATION

Item 1.        Legal Proceedings - Not Applicable

Item 2.        Changes in Securities - None

Item 3.        Defaults Upon Senior Securities - None

Item 4.        Submission of Matters to a Vote of Security Holders - None

Item 5.        Other Information - None

Item 6.        Exhibits and Reports on Form 8-K

               a.    The exhibits filed as part of this Report are as follows:


<TABLE>
<CAPTION>
                 Exhibit
                 Number                          Description
                 ------        ------------------------------------------------------
                  <S>          <C>
                  2(a)         Agreement and Plan of Merger by and between Bank South
                               Corporation and NationsBank Corporation, dated as of
                               September 4, 1995, (included as Exhibit 99.1 to the
                               Registrant's Form 8-K dated September 4, 1995, previously
                               filed with the Commission and incorporated herein by
                               reference).
                                          
</TABLE>



                                      13
<PAGE>   16


Item 6.  Exhibits and Reports on Form 8-K (CONTINUED)


<TABLE>
                  <S>          <C>
                  3 (a)        Amended and restated Articles of Incorporation, (included as Exhibit 4(a) to the
                               Registrant's Form S-8 No. 33-57791, previously filed with the Commission and incorporated
                               herein by reference).
                        
                  3 (b)        Amended and restated By-laws, (included as Exhibit 4(b) to the Registrant's Form S-8 No.
                               33-57791, previously filed with the Commission and incorporated herein by reference.)
                        
                  4 (a)        Bank South Corporation Rights Agreement (included as Exhibit 1 to the Form 8 Amendment to
                               the Form 8-A filed with the Commission on April 8, 1988, (File No. 0-4554) and
                               incorporated herein by reference).

                  10(a)        Form of Change in Control Agreement with David E. Tatum (included as  Exhibit 10(h) to the
                               Registrant's Form 10-K for the fiscal year ended December 31, 1994, previously filedwith
                               the Commission and incorporated herein by reference).

                  11           Statement Re Computation of Per Share Earnings.

                  27           Financial Data Schedules (for SEC use only)
</TABLE>


           b.     Reports on Form 8-K filed during the quarter ended September
                  30, 1995 - Form 8-K, dated September 4, 1995, reporting the
                  entrance by the Registrant into an agreement and Plan of
                  Merger with NationsBank Corporation, pursuant to which the
                  Registrant will be merged with and into NationsBank
                  Corporation.


                                      14
<PAGE>   17



                    BANK SOUTH CORPORATION AND SUBSIDIARIES


                                   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.




                                    Date:   November 14, 1995
                                            -----------------------------



                                            BANK SOUTH CORPORATION
                                            -----------------------------
                                            Registrant




                                    By:     /s/ Ralph E. Hutchins, Jr
                                            -----------------------------
                                            Ralph E. Hutchins, Jr.
                                            Chief Financial Officer
                                            (Principal Financial Officer)       
                                           



                                      15
<PAGE>   18


                    BANK SOUTH CORPORATION AND SUBSIDIARIES


                               INDEX TO EXHIBITS


<TABLE>
<CAPTION>
            Exhibit
            Number                                    Description                                             Page
            ------              ----------------------------------------------                                ----
              <S>               <C>                                                                            <C>
              11                Statement Re Computation of Per Share Earnings                                 17

              27                Financial Data Schedules (for SEC use only)                                    18
</TABLE>








                                      16