UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


WASHINGTON, D.C. 20549









**FORM 10-Q/A**


Amendment No. 1










[ X ]
Quarterly Report Under Section 13 or 15(d)Of the Securities Exchange Act of 1934 forThe Quarterly Period Ended September 30, 2004or[    ]
Transition Report Pursuant to Section 13 or 15(d)Of the Securities Exchange Act of 1934For the Transition Period from ______ to ______





Commission Fi le Number: **000-50904**




**SNB BANCSHARES, INC.**(Exact name of registrant as specified in charter)






**TEXAS**

**76-0472829**(State or other jurisdiction
of incorporation)

(IRS Employer
Identification No.)


**14060 Southwest Freeway****Sugar Land, Texas 77478**(Address of Principal executive office)**(281) 269-7200**(Registrant's telephone number)








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
o





Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).





YES
o

NO
x


Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.




**Common and Class B Stock Outstanding: 12,431,853 as of November 1, 2004**





**Explanatory Note**
  The purpose of this Amendment No. 1 to the Quarterly Report on Form 10-Q of SNB Bancshares, Inc. (the "Company") for the quarter ended September 30, 2004 (the "Original Form 10-Q") is to correct the disclosure of net gain (loss) on the sale of securities in the Consolidated Statements of Earnings for each of the periods presented and to indicate on the cover page that the Company  is not an accelerated filer (as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the "Exchange Act")).
  This Amendment No. 1 amends and restates in its entirety Part I, Item 1 and Part II, Item 6. Pursuant to Rule 12b-15 of the Exchange Act, new certifications as specified in Rule 13a-14 of the Exchange Act are filed as exhibits. This Amendment No. 1 continues to reflect circumstances as of the date of the filing of the Original Form 10-Q and does not reflect events occurring after the filing of the Original Form 10-Q, or modify or update those disclosures in any way, except as required to correct the disclosures set forth in the preceding paragraph.


**Table of Contents**




****SNB Bancshares, Inc. and Subsidiaries**
**Form 10-Q******Table of Contents******


**Part I.**
**Financial Information**Item 1
Interim Consolidated Financial StatementsConsolidated Balance Sheets as of September 30, 2004 (unaudited) and December 31, 2003Consolidated Statements of Earnings for the Three and Nine Months Ended September 30, 2004 and 2003 (unaudited)Consolidated Statements of Shareholders' Equity for the Year Ended December 31, 2003 and for the Nine Months Ended September 30, 2004 (unaudited)Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2004 and 2003 (unaudited)Notes to Interim Consolidated Financial Statements (unaudited)









**Part II.**
**Other Information**Item 6
Exhibits




****


****





**Table of Contents**


**PART I - FINANCIAL INFORMATION**


******Item 1.  Interim Consolidated Financial Statements******  **SNB BANCSHARES, INC. AND SUBSIDIARIES******CONSOLIDATED BALANCE SHEETS******(Unaudited)**September 30,

December 31,2004

2003(In thousands, except share data)**ASSETS**Cash and cash equivalents

$
15,871

$
27,928Federal funds sold


1,735


3,195Available for sale securities, at fair value (amortized cost of $497,217 and $415,269 at September 30, 2004and December 31, 2003, respectively)


492,370


412,620Held to maturity securities, at amortized cost (fair value of $11,319 at September 30, 2004)


11,214


-Loans


553,185


424,479Less allowance for loan losses


(7,473
)

(5,650
)Net Loans


545,712


418,829Premises and equipment - Net


13,837


12,691Accrued interest receivable


4,905


3,500Other assets


8,892


5,078TOTAL

$
1,094,536

$
883,841**LIABILITIES AND SHAREHOLDERS' EQUITY**LIABILITIES:Deposits:Noninterest-bearing

$
103,007

$
101,749Interest-bearing


712,190


632,222Total Deposits


815,197


733,971Other borrowings


151,500


77,800Accrued interest payable


2,250


2,089Junior subordinated debentures


38,250


38,250Other liabilities


1,286


964Total liabilities


1,008,483


853,074SHAREHOLDERS' EQUITY:Preferred stock, $0.01 par value - 20,000,000 shares authorized, no shares issued or outstanding


-


-Common stock, $0.01 par value - 50,000,000 shares authorized, 9,750,312 and 3,735,523 shares issuedand oustanding at September 30, 2004 and December 31, 2003, respectively


97


37Class B stock, $0.01 par value - 3,216,781 shares authorized, 2,680,041 and 3,258,466 shares issuedand outstanding at September 30, 2004 and December 31, 2003, respectively


27


33Capital surplus


66,162


13,974Accumulated other comprehensive income (loss) - net unrealized gain (loss) on available-for-salesecurities - net of taxes


(3,198
)

(1,748
)Retained earnings


22,965


18,471Total shareholders' equity


86,053


30,767TOTAL

$
1,094,536

$
883,841See notes to interim consolidated financial statements.
 
 ****Table of Contents****
   **SNB BANCSHARES, INC. AND SUBSIDIARIES******CONSOLIDATED STATEMENTS OF EARNINGS******(Unaudited)**Three Months Ended

Nine Months EndedSeptember 30,

September 30,2004

2003

2004

2003(In thousands, except per share data)INTEREST INCOME:Loans-including fees

$
8,031

$
6,224

$
21,617

$
17,829Securities:Taxable


4,184


2,338


11,535


5,927Nontaxable


50


24


91


74Federal funds sold and earning deposits


14


3


135


31Total interest income


12,279


8,589


33,378


23,861INTEREST EXPENSE:Demand deposits


1,215


606


3,190


2,038Certificates and other time deposits


2,179


1,788


6,708


4,594Other borrowings


1,319


742


2,812


1,779Total interest expense


4,713


3,136


12,710


8,411NET INTEREST INCOME


7,566


5,453


20,668


15,450PROVISION FOR LOAN LOSSES


625


660


2,275


2,101NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES


6,941


4,793


18,393


13,349NONINTEREST INCOME:Service charges on deposit accounts


193


210


623


674Gain (loss) on sale of securities-net


197


(1
)

700


880Other


153


147


453


423Total noninterest income


543


356


1,776


1,977NONINTEREST EXPENSE:Salaries and employee benefits


2,944


2,347


8,386


6,839Net occupancy expense


483


407


1,350


1,215Data processing


284


284


841


871Legal and professional fees


158


139


448


419FDIC deposit insurance premium


31


20


84


61Other


831


648


2,253


1,954Total noninterest expense


4,731


3,845


13,362


11,359EARNINGS BEFORE INCOME TAXES


2,753


1,304


6,807


3,967PROVISION FOR INCOME TAXES


935


443


2,313


1,349NET EARNINGS

$
1,818

$
861

$
4,494

$
2,618EARNINGS PER SHARE:Basic

$
0.20

$
0.12

$
0.58

$
0.37Diluted


0.19


0.12


0.57


0.37See notes to interim consolidated financial statements.
 ******Table of Contents******  **SNB BANCSHARES, INC. AND SUBSIDIARIES******CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY******(Unaudited)**Common Stock

Class B Stock

Capital Surplus

Accumulated Other Comprehensive Income (Loss)

Retained Earnings

Total Shareholders' Equity(In thousands, except per share data)BALANCE -- December 31, 2002

$
37

$
33

$
13,974

$
1,331

$
15,054

$
30,429Change in unrealized gain (loss) on available-for-sale securities--net











(2,499
)




(2,499
)Less reclassification adjustment for gains included in net earnings--net of tax











(580
)




(580
)Net Earnings














3,417


3,417Total comprehensive income

















338Conversion of 47,645 shares of Class B stock into 47,645 sharesof common stock


-


-











-BALANCE -- December 31, 2003

$
37

$
33

$
13,974

$
(1,748
)
$
18,471

$
30,767Change in unrealized gain (loss) on available-for-sale securities--net











(988
)




(988
)Less reclassification adjustment for gains included in net earnings--net of tax











(462
)




(462
)Net Earnings














4,494


4,494Total comprehensive income

















3,044Conversion of 578,480 shares of Class B stock into 578,480shares of common stock


6


(6
)










-Issuance of 5,436,364 shares of common stock


54





52,188








52,242BALANCE -- September 30, 2004

$
97

$
27

$
66,162

$
(3,198
)
$
22,965

$
86,053See notes to interim consolidated financial statements.
 ********Table of Contents********   **SNB BANCSHARES, INC. AND SUBSIDIARIES******CONSOLIDATED STATEMENTS OF CASH FLOWS******(Unaudited)**Nine MonthsEnded September 30,2004

2003(In thousands)CASH FLOWS FROM OPERATING ACTIVITIES:Net Earnings

$
4,494

$
2,618Adjustments to reconcile net earnings to net cash provided by operating activities:Depreciation and amortization


949


1,074Provision for loan losses


2,275


2,101Net amortization and accretion of premiums and discounts on investment securities


670


1,360Gain on sales of securities


(700
)

(886
)Increase in accrued interest receivable


(1,405
)

(1,405
)Decrease (Increase) in other assets


25


(1,676
)Increase in accrued interest payable


161


220Increase (Decrease) in other liabilities


322


(603
)Net cash provided by operating activities


6,791


2,803CASH FLOWS FROM INVESTING ACTIVITIES:Purchases of held-to-maturity securities


(11,214
)

-Purchases of available-for-sale securities


(293,844
)

(519,320
)Sales of available-for-sale securities


180,250


271,381Maturities, calls and principal repayments of available-for-sale securities


31,676


51,278Net increase in loans


(132,122
)

(66,155
)Net change in federal funds sold


1,460


44Purchase of bank premises and equipment


(2,222
)

(2,965
)Net cash used in investing activities


(226,016
)

(265,737
)CASH FLOWS FROM FINANCING ACTIVITIES:Net increase in deposits


81,226


148,049Net increase in other borrowings


73,700


68,402Issuance of junior subordinated debt


-


30,930Proceeds from sale of common stock


52,242


-Net cash provided by financing activities


207,168


247,381DECREASE IN CASH AND CASH EQUIVALENTS


(12,057
)

(15,553
)CASH AND EQUIVALENTS -- Beginning of year


27,928


44,190CASH AND EQUIVALENTS -- End of period

$
15,871

$
28,637SUPPLEMENTAL DISCLOSURES:Interest paid

$
13,201

$
11,139Income taxes paid


2,976


2,399Other real estate owned acquired through foreclosure


2,964


736See notes to interim consolidated financial statements.  **********Table of Contents**********  **SNB BANCSHARES, INC. AND SUBSIDIARIES**
 ****Notes to Interim Consolidated Financial Statements**** **September 30, 2004**
 **(Unaudited)**
  **(1) Summary of Significant Accounting Policies**
 
 Basis of Presentation
 The consolidated financial statements include the accounts of SNB Bancshares, Inc. ("Bancshares") and its wholly-owned subsidiary, SNB Corporation (collectively the "Company"). SNB Corporations wholly-owned subsidiaries are Southern National Bank of Texas (the "Bank") and Commerce Green Realty. All significant intercompany balances and transactions have been eliminated in consolidation.
 
 The accompanying unaudited interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all disclosures necessary for a complete presentation of financial condition, results of operations, comprehensive income and cash flows in conformity with accounting principles generally accepted in the United States of America. All adjustments, which are, in the opinion of management, of a normal recurring nature and are necessary for a fair presentation of the interim financial statements, have been included. These financial statements and the notes thereto should be read in conjunction with the Companys audited financial statements as of and for the year ended December 31, 2003. The results of operations for the period ended September 30, 2004 are not necessarily indicative of the results that may be expected for the entire fiscal year or any other interim period.
 
 Stock Based Compensation
 The Company accounts for its stock-based employee compensation plan using the intrinsic value-based method of accounting, as permitted, and discloses pro forma information as if accounted for using the fair value-based method as prescribed by accounting principles and has been determined as if the Company accounted for its employee stock option plan under the fair value method. No stock-based compensation expense is reflected in net income, because all stock options granted had an exercise price equal to the market value of the underlying common stock on the date of grant.
 
 If compensation cost for the Companys stock-based compensation plan had been determined on the fair value method at the grant dates for awards, there would have been no material impact on the Companys reported net income or earnings per share. Pro forma information regarding net income and earnings per share is required under accounting principles and has been determined as if the Company accounted for its employee stock option plan under the fair value method. The fair value of options was estimated using the Black-Scholes option pricing model. Because employee stock options have differing characteristics and changes in the subjective input assumptions can materially affect the fair value estimate, the Black-Scholes valuation model does not necessarily provide a reliable measure of the fair value employee stock options. The following table shows information related to stock-based compensation in both the reported and pro forma earnings per share amounts:
   Three Months Ended



Nine Months EndedSeptember 30,



September 30,2004



2003



2004



2003(In thousands, except per share data)Net earnings-as reported




$
1,818




$
861




$
4,494




$
2,618Less total stock-based employee compensation expense determined underthe fair value based method - net of related tax effects





43





15





73





45$
1,775




$
846




$
4,421




$
2,573Earnings per share:Basic:As reported




$
0.20




$
0.12




$
0.58




$
0.37Pro forma




$
0.19




$
0.12




$
0.57




$
0.37Diluted:As reported




$
0.19




$
0.12




$
0.57




$
0.37Pro forma




$
0.19




$
0.12




$
0.57




$
0.37
 
 ************Table of Contents************
 
 **SNB BANCSHARES, INC. AND SUBSIDIARIES**
 **Notes to Interim Consolidated Financial Statements**
 **September 30, 2004**
 **(Unaudited)**
 
  
 Recent Accounting Standards
 In January 2003, the Financial Accounting Standards Board ("FASB") issued FASB Interpretation No. 46, *Consolidation of Variable Entities* (FIN 46), to address perceived weaknesses in accounting for entities commonly known as special-purpose or off-balance-sheet. In addition to numerous FASB Staff Positions written to clarify and improve the application of FIN 46, the FASB recently announced a deferral for certain entities, and an amendment to FIN 46 entitled FASB Interpretation No. 46 (revised December 2003), *Consolidation of Variable Interest Entities* (FIN 46R).
 
 FIN 46 establishes consolidation criteria for entities for which "control" is not easily discernable under Accounting Research Bulletin 51, *Consolidated Financial Statements* , which is based on the premise that holders of the equity of an entity control the entity by virtue of voting rights. FIN 46 provides guidance for identifying the party with a controlling financial interest resulting from arrangements or financial interests rather than from voting interest. FIN 46 defines the term "variable interest entity" (VIE) and is based on the premise that if a business enterprise absorbs a majority of the VIEs expected losses and/or receives a majority of its expected residual returns (measures of risk and reward), that enterprise (the primary beneficiary) has a controlling financial interest in the VIE. The assets, liabilities, and results of the activities of the VIE should be included in the consolidated financial statements of the primary beneficiary.
 
 On January 1, 2004, the Company adopted FIN 46R, "Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51." Upon adoption, the trusts that previously issued the outstanding company-obligated mandatorily redeemable trust preferred securities were deconsolidated from the Companys Consolidated Financial Statements. Instead, the junior subordinated debentures issued by the Company to these subsidiary trusts are shown as liabilities in the consolidated balance sheet and interest expense associated with the junior subordinated debentures is shown in the consolidated statements of income. The Consolidated Financial Statements have been restated to reflect the adoption of FIN 46R. Adoption of FIN 46R did not affect previously reported amounts for net income and shareholders equity.
 
 In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity." This statement establishes standards for classifying and measuring certain financial instruments with characteristics of both liabilities and equity. Many instruments affected by this standard were previously classified as equity. The Company adopted SFAS 150 on January 1, 2004 and its adoption had no effect on the consolidated financial statements.
 
 In March 2004, the Emerging Issues Task Force ("EITF") reached consensus on Issue 03-01 (EITF 03-01), "The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments." EITF 03-01 includes new guidance for evaluating and recording impairment losses on debt and equity investments, as well as new disclosure requirements for investments that are deemed to be temporarily impaired. This Issue specifically addresses whether an investor has the ability and intent to hold an investment until recovery. On September 30, 2004, the Financial Accounting Standards Board deferred the effective date of the Issue's guidance on how to evaluate and recognize an impairment loss that is other-than-temporary. This Issue's guidance is pending the issuance of a final FASB Staff Position ("FSP") relating to the draft FSP EITF Issue 03-01-a, Implementation Guidance for the Application of Paragraph 16 of EITF Issue No. 03-01, "The Meaning of Other-Than-Temporary Impairment and Its application to Certain Investments," which the Board may issue as early as November. This deferral did not change the disclosure guidance which remains effective for fiscal years ending after December 15, 2003. Matters being considered by the FASB which may impact the Company's financial reporting include the accounting as a component in determining net income for declines in market value of debt securities which are due solely to changes in market interest rates and the effect of sales of available-for-sale securities which have market values below cost at the time of sale and whether such sale indicates an absence of intent and ability of the investor to hold to a forecasted recovery of the investment's value to its original cost.
 
 
 **************Table of Contents**************
 
 **SNB BANCSHARES, INC. AND SUBSIDIARIES**
 **Notes to Interim Consolidated Financial Statements**
 **September 30, 2004**
 **(Unaudited)**
  
 Earnings per Share
 Earnings per share are presented under two formats: basic earnings per share and diluted earnings per share. Basic earnings per share is computed by dividing net earnings available to holders of common stock and Class B stock by the weighted average number of common and Class B shares outstanding for the reporting period. Diluted earnings per share is computed by dividing net earnings by the weighted average number of shares outstanding adjusted for the incremental shares issuable upon exercise of outstanding stock options. The incremental shares for the assumed exercise of the outstanding options were determined by application of the treasury stock method. Outstanding stock options issued by the Company represent the only dilutive effect reflected in diluted weighted average shares. Basic and diluted earnings per share were computed as follows (dollars in thousands, except per share data):
 Three Months Ended



Nine Months EndedSeptember 30,



September 30,2004



2003



2004



2003Net earnings




$
1,818




$
861




$
4,494




$
2,618Basic:Weighted average shares outstanding





9,137





6,994





7,713





6,994Basic earnings per share




$
0.20




$
0.12




$
0.58




$
0.37Diluted:Weighted average shares outstanding





9,137





6,994





7,713





6,994Potentially dilutive common shares from options





210





253





215





169Weighted average shares and potentially dilutive common shares outstanding


9,347





7,247





7,928





7,163Diluted earnings per share




$
0.19




$
0.12




$
0.57




$
0.37
   
 
 ****************Table of Contents****************
 **SNB BANCSHARES, INC. AND SUBSIDIARIES**
 **Notes to Interim Consolidated Financial Statements**
 **September 30, 2004**
 **(Unaudited)**
 
 **(2) Securities**
 
 The amortized cost and fair value of investment securities at September 30, 2004 and December 31, 2003 were as follows (in thousands):
  **As of September 30, 2004****Gross**

**Gross****Amortized**

**Unrealized**

**Unrealized**

**Fair****Cost**

**Gains**

**Losses**

**Value****Available-for-Sale:**U.S. Government securities

$
286,969

$
47

$
(2,762
)
$
284,254Mortgage-backed securities


106,600


291


(1,384
)

105,507Collateralized mortgage obligations


83,028


16


(1,137
)

81,907Obligations of state and political subdivisions


2,158


41


(10
)

2,189Other securities


18,462


83


(32
)

18,513Total

$
497,217

$
478

$
(5,325
)
$
492,370**Held-to-maturity:**Collateralized mortgage obligations

$
5,424

$
-

$
(13
)
$
5,411Obligations of state and political subdivisions


5,790


118


-


5,908Total

$
11,214

$
118

$
(13
)
$
11,319 **As of December 31, 2003****Gross**

**Gross****Amortized**

**Unrealized**

**Unrealized**

**Fair****Cost**

**Gains**

**Losses**

**Value****Available-for-Sale:**U.S. Government securities

$
245,977

$
374

$
(2,376
)
$
243,975Mortgage-backed securities


71,419


639


(277
)

71,781Collateralized mortgage obligations


83,308


151


(970
)

82,489Obligations of state and political subdivisions


2,525


60


(269
)

2,316Other securities


12,040


19


-


12,059Total

$
415,269

$
1,243

$
(3,892
)
$
412,620
 
 Included in Other securities above is the Companys investment in Federal Reserve Bank and Federal Home Loan Bank stock of $12.7 million and $7.8 million at September 30, 2004 and December 30, 2003, respectively. The carrying value of Federal Reserve Bank and Federal Home Loan Bank stock approximates fair value based on the respective redemption provisions of the Federal Reserve Bank and the Federal Home Loan Bank.
 
 
 ******************Table of Contents******************
 **SNB BANCSHARES, INC. AND SUBSIDIARIES**
 **Notes to Interim Consolidated Financial Statements**
 **September 30, 2004**
 **(Unaudited)**
  
 Declines in the fair value of individual securities below their cost that are other than temporary would result in write-downs, as a realized loss, of the individual securities to their fair value. Management believes that based upon the credit quality of the securities, none of the unrealized loss on securities is considered other-than-temporary at September 30, 2004. An analysis of gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at September 30, 2004 is as follows (in thousands):
 Less than 12 months

12 months or longer

TotalGross



Gross



GrossFair

Unrealized

Fair

Unrealized

Fair

UnrealizedValue

Losses

Value

Losses

Value

Losses**Available-for-Sale:**U.S. Government securities

$
181,403

$
(1,571
)
$
62,809

$
(1,191
)
$
244,212

$
(2,762
)Mortgage-backed securities


81,835


(1,218
)

10,646


(166
)

92,481


(1,384
)Collateralized mortgage obligations


51,801


(557
)

19,794


(580
)

71,595


(1,137
)Obligations of state and political subdivisions


1,384


(10
)

-


-


1,384


(10
)Other securities


1,537


(7
)

1,560


(25
)

3,097


(32
)Total

$
317,960

$
(3,363
)
$
94,809

$
(1,962
)
$
412,769

$
(5,325
)**Held-to-maturity:**Collateralized mortgage obligations

$
5,411

$
(13
)
$
-

$
-

$
5,411

$
(13
)Obligations of state and political subdivisions


-


-


-


-


-


-Total

$
5,411

$
(13
)
$
-

$
-

$
5,411

$
(13
)
 Investment securities with amortized costs of $287.6 million and $114.5 million and fair values of $284.0 million and $113.4 million at September 30, 2004 and December 31, 2003, respectively, were pledged to collateralize public deposits and Federal Home Loan Bank advances and for other purposes required or permitted by law.
 
 **(3) Shareholders Equity**
 
 Common Stock - In the third quarter of 2004 the Company completed an initial public offering of its common stock (par value $0.01 per share), in which it sold 5,436,364 shares at $10.50 per share. Net proceeds, after deducting underwriting commissions of $4.0 million and offering expenses of $842 thousand, in the amount of $52.2 million were credited to shareholders equity.
 
 Stock Options - In March 2002, the shareholders of the Company approved a Stock Option Plan which provides for the grant of stock options as incentives and rewards for employees and directors of the Company. The shareholders of the Company approved an amendment to the Stock Option Plan on June 7, 2004 to increase the maximum number of shares issuable under the Stock Option Plan from 500,000 to 1,300,000 shares. The exercise price of the outstanding options is the fair market value of the shares of common stock at the date of grant and the outstanding options vest ratably over a 5-year period. The Stock Option Plan expires November 21, 2012. At September 30, 2004 and December 31, 2003, options to purchase 1,284,000 and 340,500 shares of the Companys common stock, respectively, were outstanding.
 ********************Table of Contents******************** ****
 **SNB BANCSHARES, INC. AND SUBSIDIARIES**
 **Notes to Interim Consolidated Financial Statements**
 **September 30, 2004**
 **(Unaudited)**
 
 A summary of changes in outstanding options is as follows:
 **Nine months ended September 30, 2004**

**Year Ended December 31, 2003**Number of Options

Weighted Average Exercise Price

Number of Options

Weighted Average Exercise PriceOutstanding at beginning of period


340,500

$
5.00


363,000

$
5.00Granted- employees


910,500


10.82


-


-Granted - directors


35,000


10.82


-


-Exercised


-


-


-


-Forfeited


(2,000
)

5.00


(22,500
)

5.00Outstanding at end of period


1,284,000


9.29


340,500


5.00Exercisable at end of period


67,700


5.00


68,100


5.00Weighted average fair value of options granted during period




$
4.57





-Remaining authorized shares under approved plan at end of period


16,000





159,500
 The fair value of options at date of grant was estimated using the Black-Scholes options-pricing model with the following weighted-average assumptions:
 2004

2003

2002Expected life (years)


7


-


7Risk free interest rate


4.23
%

-


4.19
%Volatility


31.00
%

-


31.00
%Dividend yield


0.00
%

-


0.00
%
 **(4) Regulatory Matters**
 
 The Company and Bank are subject to various regulatory capital requirements administered by the federal banking agencies. Any institution that fails to meet its minimum capital requirements is subject to actions by regulators that could have a direct material effect on its financial statements. Under the capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company must meet specific capital guidelines based on the assets, liabilities and certain off-balance-sheet items as calculated under the regulatory accounting practices. The Banks capital amounts and classification under the regulatory framework for prompt corrective action are also subject to qualitative judgments by the regulators about the components, risk weightings and other factors.
 
 To meet the capital adequacy requirements, the Company must maintain minimum capital amounts and ratios as defined in the regulations. As of September 30, 2004, the most recent notification from the OCC categorized the Bank as well-capitalized under the regulatory framework for prompt corrective action. To be categorized as well-capitalized, the Bank must maintain minimum total risk-based, Tier I risk-based and Tier I leverage ratios as set forth in the table. There have been no conditions or events since that notification which management believes have changed the Banks category.
 **********************Table of Contents**********************  **SNB BANCSHARES, INC. AND SUBSIDIARIES**
 **Notes to Interim Consolidated Financial Statements**
 **September 30, 2004**
 **(Unaudited)**
  
 The following is a summary of the Companys and the Banks capital ratios at September 30, 2004 and December 31, 2003 (dollars in thousands):
 
  
 To Be CategorizedAs Well CapitalizedUnder PromptFor Capital

Corrective ActionActual

Adequacy Purposes

ProvisionsAmount

Ratio

Amount

Ratio

Amount

Ratio**CONSOLIDATED*:**As of September 30, 2004 (Unaudited)Total Capital (to Risk-Weighted Assets)

$
133,801


20.56
%
$
52,063


8.00
%Tier I Capital (to Risk-Weighted Assets)


118,972


18.28


26,033


4.00Tier I Capital (to Total Assets)


118,972


10.83


43,942


4.00As of December 31, 2003Total Capital (to Risk-Weighted Assets)

$
74,244


15.35
%
$
39,214


8.00
%Tier I Capital (to Risk-Weighted Assets)


43,329


8.84


19,607


4.00Tier I Capital (to Total Assets)


43,329


5.09


34,027


4.00**BANK:**As of September 30, 2004 (Unaudited)Total Capital (to Risk-Weighted Assets)

$
116,370


17.92
%
$
51,951


8.00
%
$
64,939


10.00
%Tier I Capital (to Risk-Weighted Assets)


108,897


16.77


25,974


4.00


38,961


6.00Tier I Capital (to Total Assets)


108,897


9.92


43,910


4.00


54,888


5.00As of December 31, 2003Total Capital (to Risk-Weighted Assets)

$
75,227


15.39
%
$
39,095


8.00
%
$
48,868


10.00
%Tier I Capital (to Risk-Weighted Assets)


69,577


14.24


19,547


4.00


29,321


6.00Tier I Capital (to Total Assets)


69,577


8.19


33,966


4.00


47,457


5.00* At September 30, 2004 and December 31, 2003, Tier I Capital ( for Purposes of determining the Tier I Capital to Total Assets ratio and the Tier I Capital to Risk-WeightedAssets ratio) includes a portion of the Company's Trust Preferred Securities as allowed by regulatory capital guidelines.  Trust Preferred Securities amounts not includedin Tier I Capital are included in Tier II Capital for purposes of determining the Total Capital to Risk-Weighted Assets ratio.
  
 
 
 **Table of Contents**
 ****
 **PART II - OTHER INFORMATION**
 
 ****Item 6.****Exhibits****
 
 Exhibits.
 
 31.1 Certification of the Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934 and Section 302 of the Sarbanes-Oxley Act of 2002.
 31.2 Certification of the Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934 and Section 302 of the Sarbanes-Oxley Act of 2002.
 32.1 Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 32.2 Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 **************************************************Table of Contents**************************************************   **Signatures**
 
 
 Pursuant to the requirement 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 17, 2004
By:
/s/  Harvey ZinnPresident and Chief Executive Officer
   Date:   November 17, 2004
By:
/s/  R. Darrell BrewerChief Financial Officer