U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

    (MARK  ONE)                   FORM  10-QSB

       X         QUARTERLY  REPORT  UNDER  SECTION  13  OR  15(d)
      ---               OF THE SECURITIES EXCHANGE ACT OF 1934

                  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2002

                                       OR

              TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
              THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

               FOR THE TRANSITION PERIOD FROM _________TO_________

                          Commission File No. 333-30182


                              SUN BANCSHARES, INC.
             (Exact name of registrant as specified in its charter)


                United States                        58-2466380
        (State or other jurisdiction              (I.R.S. Employer
              of incorporation)                  Identification No.)

                              4367 RIVERWOOD DRIVE
                          MURRELLS INLET, SC 29576-1359
          (Address of principal executive offices, including zip code)

                                 (843) 357-7007
              (Registrant's telephone number, including area code)
                ________________________________________________

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          NO  X
                                    ---         ---

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

       715,000 SHARES OF COMMON STOCK, NO STATED PAR VALUE ON MAY 10, 2002

  Transitional Small Business Disclosure Format (check one):  Yes [ ]  No [X]


                                  PAGE 1 OF 14
                             EXHIBIT INDEX ON PAGE 2


<PAGE>
<TABLE>
<CAPTION>
                                             SUN BANCSHARES, INC.

                             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                                  (UNAUDITED)


                                                     INDEX


PART I. FINANCIAL RESULTS                                                                             Page No.
-------------------------
<S>                                                                                                   <C>
Item 1. Financial Statements (Unaudited)

        Condensed Consolidated Balance Sheets - March 31, 2002 and December 31, 2001 . . . . . . . .         3

        Condensed Consolidated Statement of Income - Three months ended March 31, 2002 and 2001. . .         4

        Condensed Consolidated Statement of Shareholders' Equity and Comprehensive Income-
          Three months ended March 31, 2002 and 2001 . . . . . . . . . . . . . . . . . . . . . . . .         5

        Condensed Consolidated Statement of Cash Flows - Three months ended March 31, 2002 and 2001.         6

        Notes to Condensed Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . .         7

Item 2. Management's Discussion and Analysis or Plan of Operation. . . . . . . . . . . . . . . . . .      8-12

PART II. OTHER INFORMATION
--------------------------

Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        13

        (a) Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        13

        (b) Reports on Form 8-K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        13
</TABLE>


<PAGE>
<TABLE>
<CAPTION>
                                        SUN BANCSHARES, INC.
                                 CONDENSED CONSOLIDATED BALANCE SHEETS


                                                                            March 31,     December 31,
                                                                               2002           2001
                                                                           ------------  --------------
<S>                                                                        <C>           <C>
ASSETS:                                                                     (Unaudited)
  Cash and cash equivalents:
   Cash and due from banks                                                 $ 1,196,661   $   1,025,008
   Federal funds sold                                                        2,173,000       1,304,000
                                                                           ------------  --------------
    Total cash and cash equivalents                                          3,369,661       2,329,008
                                                                           ------------  --------------

Investment securities:
   Securities available-for-sale                                             4,412,747       4,384,229
   Nonmarketable equity securities                                             195,000         195,000
                                                                           ------------  --------------
    Total investment securities                                              4,607,747       4,579,229
                                                                           ------------  --------------

Loans receivable:                                                           19,044,224      16,238,315
   Less allowance for loan losses                                             (212,787)       (164,787)
                                                                           ------------  --------------
    Loans, net                                                              18,831,437      16,073,528

Premises, furniture and equipment, net                                       1,672,713       1,661,354
Accrued interest receivable                                                    126,488         122,234
Other assets                                                                   646,798         583,689
                                                                           ------------  --------------
    Total assets                                                           $29,254,844   $  25,349,042
                                                                           ============  ==============

LIABILITIES:
  Deposits:
  Noninterest-bearing transaction accounts                                 $ 4,212,734   $   4,210,483
  Interest-bearing transaction accounts                                        944,537         878,031
  Savings                                                                    5,372,208       4,038,849
  Time deposits $100,000 and over                                            5,753,298       4,911,008
  Other time deposits                                                        7,413,570       5,161,743
                                                                           ------------  --------------
    Total deposits                                                          23,696,347      19,200,114
                                                                           ------------  --------------

Securities sold under agreement to repurchase                                        -         500,000
Accrued interest payable                                                       241,696         188,144
Other liabilities                                                               33,714          18,501
                                                                           ------------  --------------
    Total liabilities                                                       23,971,757      19,906,759
                                                                           ------------  --------------

SHAREHOLDERS' EQUITY:
Preferred stock, par value not stated; 2,000,000 shares
  authorized and unissued                                                            -               -
Common stock, par value not stated; 10,000,000 shares authorized;
  715,000 issued and outstanding at March 31, 2002 and December 31, 2001     6,779,216       6,779,216
Retained earnings (deficit)                                                 (1,491,811)     (1,350,396)
Accumulated other comprehensive income                                          (4,318)         13,463
                                                                           ------------  --------------
    Total shareholders' equity                                               5,283,087       5,442,283
                                                                           ------------  --------------

    Total liabilities and shareholders' equity                             $29,254,844   $  25,349,042
                                                                           ============  ==============
</TABLE>


            See notes to condensed consolidated financial statements.


                                        3
<PAGE>
<TABLE>
<CAPTION>
                               SUN BANCSHARES, INC.
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                   (UNAUDITED)

                                                       Three Months Ended
                                                            March 31,
                                                     ----------------------
                                                        2002        2001
                                                     ----------  ----------
<S>                                                  <C>         <C>
INTEREST INCOME:
  Loans, including fees                              $ 338,800   $  63,600
  Investment securities:
    Taxable                                             46,768      15,893
    Nonmarketable equity securities                      5,850           -
  Federal funds sold                                     4,565      80,921
                                                     ----------  ----------
    Total                                              395,983     160,414
                                                     ----------  ----------

INTEREST EXPENSE:
  Time deposits $100,000 and over                       64,498       9,393
  Other deposits                                        89,773      28,078
  Other interest expense                                 2,445           -
                                                     ----------  ----------
    Total                                              156,716      37,471
                                                     ----------  ----------

NET INTEREST INCOME                                    239,267     122,943

Provision for loan losses                               48,000      35,000
                                                     ----------  ----------

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES    191,267      87,943
                                                     ----------  ----------

OTHER OPERATING INCOME:
  Service charges on deposit accounts                   25,711       2,031
  Residential mortgage origination fees                  9,633       7,588
  Gain on sale of available-for-sale securities          1,406           -
  Other income                                          11,014       1,521
                                                     ----------  ----------
    Total                                               47,764      11,140
                                                     ----------  ----------

OTHER OPERATING EXPENSES:
  Salaries and employee benefits                       227,564     164,106
  Occupancy expense                                     69,048      71,091
  Furniture and equipment expense                       25,778      15,960
  Other operating expenses                             134,099     114,241
                                                     ----------  ----------
    Total                                              456,489     365,398
                                                     ----------  ----------

LOSS BEFORE INCOME TAXES                              (217,458)   (266,315)

Income tax benefit                                     (76,043)    (99,647)
                                                     ----------  ----------

NET LOSS                                             $(141,415)  $(166,668)
                                                     ==========  ==========

EARNINGS (LOSSES) PER SHARE
  Average shares outstanding                           715,000     715,000
  Basic earnings (losses) per share                  $   (0.20)  $   (0.23)
  Diluted earnings (losses) per share                $   (0.20)  $   (0.23)
</TABLE>


            See notes to condensed consolidated financial statements.


                                        4
<PAGE>
<TABLE>
<CAPTION>
                                        SUN BANCSHARES, INC.
                      CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
                         FOR THE THREE MONTHS ENDED MARCH 31, 2002 AND 2001
                                             (UNAUDITED)

                                                                          Accumulated
                                     Common  Stock                           Other
                               -------------------------    Retained     Comprehensive
                                  Shares       Amount       Earnings        Income          Total
                               ------------  -----------  ------------  ---------------  -----------
<S>                            <C>           <C>          <C>           <C>              <C>
BALANCE, DECEMBER 31, 2000         715,000   $6,779,216   $  (719,617)  $            -   $6,059,599

Net loss for the period                                      (166,668)                     (166,668)

Other comprehensive income,
 net of tax $203                                                                   347          347
                                                                                         -----------

Comprehensive income                                                                       (166,321)
                               ------------  -----------  ------------  ---------------  -----------

BALANCE, MARCH 31, 2001            715,000   $6,779,216   $  (886,285)  $          347   $5,893,278
                               ============  ===========  ============  ===============  ===========

BALANCE, DECEMBER 31, 2001         715,000   $6,779,216   $(1,350,396)  $       13,463   $5,442,283

Net loss for the period                                      (141,415)                     (141,415)

Other comprehensive
 income, net of tax $(10,443)                                                  (17,781)     (17,781)
                                                                                         -----------

Comprehensive income                                                                       (159,196)
                               ------------  -----------  ------------  ---------------  -----------

BALANCE, MARCH 31, 2002            715,000   $6,779,216   $ 1,491,811   $       (4,318)  $5,253,087
                               ============  ===========  ============  ===============  ===========
</TABLE>

            See notes to condensed consolidated financial statements.


                                        5
<PAGE>
<TABLE>
<CAPTION>
                                      SUN BANCSHARES, INC.
                                    STATEMENT OF CASH FLOWS
                                         (UNAUDITED)

                                                                       Three Months Ended
                                                                            March 31,
                                                                   --------------------------
                                                                       2002          2001
                                                                   ------------  ------------
<S>                                                                <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                                         $  (141,415)  $  (166,668)
  Adjustments to reconcile net income to net cash (used) provided
   by operating activities:
    Depreciation and amortization                                       36,476        15,960
    Provision for loan losses                                           48,000        35,000
    Accretion and premium amortization                                   7,087          (295)
    Deferred income tax benefit                                        (76,043)      (99,647)
    Gain on sale of securities                                          (1,406)            -
    Increase in interest receivable                                     (4,254)      (26,300)
    Increase in interest payable                                        53,552        20,669
    Decrease in other assets                                            23,377        16,029
    Increase in other liabilities                                       15,213        12,875
                                                                   ------------  ------------
      Net cash used by operating activities                            (39,413)     (192,377)
                                                                   ------------  ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of securities available-for-sale                          (851,129)   (2,579,858)
  Proceeds from maturities of securities available-for-sale            287,300       774,448
  Proceeds from sales of securities available-for-sale                 501,406             -
  Net increase in loans made to customers                           (2,805,909)   (3,481,176)
  Purchases of premises and equipment                                  (47,835)     (316,214)
                                                                   ------------  ------------
    Net cash used by investing activities                           (2,916,167)   (5,602,800)
                                                                   ------------  ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Net increase in demand deposits, interest-bearing transaction
   accounts and savings accounts                                     1,402,116     2,550,266
  Net increase in certificates of deposit and other time deposits    3,094,117     1,290,114
  Decrease in securities sold under agreement to repurchase           (500,000)            -
                                                                   ------------  ------------
    Net cash provided by financing activities                        3,996,233     3,840,380
                                                                   ------------  ------------

NET INCREASE (DECREASE) IN CASH                                      1,040,653    (1,954,797)

CASH, BEGINNING OF PERIOD                                            2,329,008     6,173,515
                                                                   ------------  ------------

CASH, END OF PERIOD                                                $ 3,369,661   $ 4,218,718
                                                                   ============  ============

CASH PAID DURING THE PERIOD FOR:
  Interest                                                         $   103,164   $    16,802
  Taxes                                                                      -             -
</TABLE>


            See notes to condensed consolidated financial statements.


                                        6
<PAGE>
                               SUN BANCSHARES, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE  1  -  BASIS  OF  PRESENTATION
-----------------------------------

The  accompanying financial statements have been prepared in accordance with the
requirements  for  interim  financial  statements  and,  accordingly,  they  are
condensed  and  omit  disclosures  which  would  substantially  duplicate  those
contained  in  the  most  recent  annual  report to shareholders.  The financial
statements  as of March 31, 2002 and for the interim period ended March 31, 2001
are  unaudited  and,  in  the  opinion  of  management,  include all adjustments
(consisting  of  normal  recurring  accruals)  considered  necessary  for a fair
presentation.  The  financial  information  as  of  December  31,  2001 has been
derived  from  the  audited  financial  statements as of that date.  For further
information,  refer  to  the  financial statements and the notes included in Sun
Bancshares,  Inc.'s  2001  Annual  Report.

NOTE  2  -  EARNINGS  PER  SHARE
--------------------------------

Net  income per share - basic is computed by dividing net income by the weighted
average  number of common shares outstanding.  Net income per share - diluted is
computed  by dividing net income by the weighted average number of common shares
outstanding  and  dilutive  common  share  equivalents  using the treasury stock
method.  Dilutive  common  share equivalents include common shares issuable upon
exercise  of  outstanding  stock  options.  There  were no dilutive common share
equivalents  outstanding  during  the  first  three  months  of  2002  and 2001;
therefore basic earnings per share and diluted earnings per share were the same.

NOTE  3  -  COMPREHENSIVE  INCOME
---------------------------------

Comprehensive  income  includes net income and other comprehensive income, which
is  defined  as  non-owner  related transactions in equity.  The following table
sets  forth  the  amounts of other comprehensive income included in equity along
with  the related tax effect for the three-month period ended March 31, 2002 and
2001:

<TABLE>
<CAPTION>
                                                                Pre-tax   (Expense)    Net-of-tax
                                                                Amount     Benefit       Amount
                                                               ---------  ----------  ------------
<S>                                                            <C>        <C>         <C>
 FOR THE THREE MONTHS ENDED MARCH 31, 2001:
Unrealized gains (losses) on securities:
 Unrealized holding gains (losses) arising during the period   $    550   $    (203)  $       347
 Plus: reclassification adjustment for gains (losses)
    realized in net income                                            -           -             -
                                                               ---------  ----------  ------------
Net unrealized gains (losses) on securities                         550        (203)          347
                                                               ---------  ----------  ------------

Other comprehensive income                                     $    550   $    (203)  $       347
                                                               =========  ==========  ============

 FOR THE THREE MONTHS ENDED MARCH 31, 2002:
Unrealized gains (losses) on securities:
 Unrealized holding gains (losses) arising during the period   $(29,630)  $  10,963   $   (18,667)
 Plus: reclassification adjustment for gains (losses)
    realized in net income                                        1,406        (520)          886
                                                               ---------  ----------  ------------
Net unrealized gains (losses) on securities                     (28,224)     10,443       (17,781)
                                                               ---------  ----------  ------------

Other comprehensive income                                     $(28,224)  $  10,443   $   (17,781)
                                                               =========  ==========  ============
</TABLE>

Accumulated other comprehensive income consists solely of the unrealized gain on
securities  available  for  sale,  net  of  the  deferred  tax  effects.


                                        7
<PAGE>
                               SUN BANCSHARES, INC.

ITEM  2.  MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OR  PLAN  OF  OPERATION
          ----------------------------------------------------------------

The  following  is  a discussion of our financial condition as of March 31, 2002
compared  to  December  31,  2001,  and  the results of operations for the three
months  ended  March 31, 2002 compared to the three months ended March 31, 2001.
These  comments  should  be  read  in  conjunction  with our condensed financial
statements  and  accompanying  footnotes  appearing in this report.  This report
contains  "forward-looking  statements"  relating to, without limitation, future
economic  performance, plans and objectives of management for future operations,
and  projections  of  revenues  and  other financial items that are based on the
beliefs  of  our  management,  as  well  as  assumptions made by and information
currently  available  to  our  management.  The  words  "expect,"  "estimate,"
"anticipate,"  and  "believe,"  as  well as similar expressions, are intended to
identify  forward-looking  statements.  Our actual results may differ materially
from  the results discussed in the forward-looking statements, and our operating
performance  each quarter is subject to various risks and uncertainties that are
discussed  in  detail  our  filings with the Securities and Exchange Commission.

RESULTS  OF  OPERATIONS
-----------------------

NET  INTEREST  INCOME
---------------------

For  the  three  months  ended  March  31,  2002,  net interest income increased
$116,324  or  94.62%, over the same period in 2001.  Interest income from loans,
including  fees,  for  the  three  months  ended March 31, 2002 was $338,800, an
increase  of  $275,200,  or  432.70%,  from the comparable period in 2001, as we
continued to establish a presence in our market areas.  Interest expense for the
three  months ended March 31, 2002 was $156,716 compared to $37,471 for the same
period  in  2001.  The  net interest margin realized on earning assets was 4.23%
for  the  three  months  ended March 31, 2002, as compared to 5.36% for the same
period  in  2001.  The  net  interest  spread increased from 2.31% for the three
months  ended  March  31,  2001  to  3.19%  for the three months March 31, 2002.

PROVISION  AND  ALLOWANCE  FOR  LOAN  LOSSES
--------------------------------------------

The  provision  for  loan  losses  is  the  charge to operating earnings that we
believe  is  necessary  to maintain the allowance for possible loan losses at an
adequate  level.  For  the  three  months  ended  March  31, 2002, the provision
charged  to  expense was $48,000 as compared to the provision of $35,000 charged
to  expense  during  the three months ended March 31, 2001.  This is a result of
our  efforts  to adjust the allowance for loan losses to match the growth in the
loan  portfolio.  There  are risks inherent in making all loans, including risks
with  respect  to  the  period  of  time  over  which loans may be repaid, risks
resulting  from  changes  in economic and industry conditions, risks inherent in
dealing  with  individual  borrowers, and, in the case of a collateralized loan,
risks resulting from uncertainties about the future value of the collateral.  We
maintain  an  allowance for loan losses based on, among other things, historical
experience,  an  evaluation  of  economic  conditions,  and  regular  reviews of
delinquencies  and  loan  portfolio quality.  Our judgment about the adequacy of
the  allowance  is based upon a number of assumptions about future events, which
we  believe  to  be  reasonable,  but which may not prove to be accurate.  Thus,
there  is  a  risk that charge-offs in future periods could exceed the allowance
for  loan  losses  or that substantial additional increases in the allowance for
loan losses could be required.  Additions to the allowance for loan losses would
result  in  a  decrease  of  our  net  income  and,  possibly,  our  capital.

NONINTEREST  INCOME
-------------------

Noninterest  income during the three months ended March 31, 2002 was $47,764, an
increase  of  $36,624,  or  328.76%,  from  the  comparable period in 2001.  The
increase  is  primarily  a  result  of an increase in service charges on deposit
accounts.  Service  charges  on  deposit  accounts increased from $2,031 for the
three  months  ended  March 31, 2001 to $25,711 for the three months ended March
31,  2002.  This  change is a result of an increase in deposit accounts over the
two  periods.  Deposits  at  March  31,  2001  were  $5,779,723,  compared  to
$23,696,347  at  March  31,  2002.


                                        8
<PAGE>
                               SUN BANCSHARES, INC.

ITEM  2.  MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OR  PLAN  OF  OPERATION
          ----------------------------------------------------------------

NONINTEREST  EXPENSE
--------------------

Total  noninterest  expense  for  the  three  months  ended  March  31, 2002 was
$456,489, 24.93% higher than the three months ended March 31, 2001.  The primary
reason  for  the $91,091 increase in noninterest expense over the same period in
2001  was  attributable  to  salaries  and  employee  benefits,  which increased
$63,458,  or 38.67% over the same period in 2001.  This increase was largely the
result  of  an  increase  in  personnel  in support functions for the Georgetown
office.

INCOME  TAXES
-------------

The  income  tax  benefit  for  three months ended March 31, 2002 was $76,043 as
compared  to  $99,647  for  the same period in 2001.  The effective tax rate was
34.97%  for  the quarter ending March 31, 2002 and 37.42% for the quarter ending
March  31,  2001.

NET  INCOME  (LOSS)
-------------------

The combination of the above factors resulted in a net loss for the three months
ended  March  31, 2002 and for the three months ended March 31, 2001 of $141,415
and  $166,668,  respectively.  Net  loss  before  taxes  for the two periods was
$217,458  and  $266,315,  respectively.  The  net  loss  before income taxes was
offset  by  income  tax  benefits  of  $76,043  and  $99,647,  respectively.

FINANCIAL  CONDITION
--------------------

ASSETS  AND  LIABILITIES
------------------------

During  the  first  three  months of 2002, total assets increased $3,905,802, or
15.41%,  when  compared  to  December 31, 2001.  The primary source of growth in
assets  during  the  first three months of 2002 was gross loans, which increased
$2,805,909,  or  17.28%  and  federal  funds  sold, which increased $869,000, or
66.66%.  Total  deposits  increased $4,496,233, or 23.42%, from the December 31,
2001  amount  of  $19,200,114.  Within  the  deposit  area,  noninterest-bearing
deposits  increased  $2,251  or  .05%  to  $4,212,734  at  March 31, 2002.  Time
deposits  $100,000  and over increased $842,290 or 17.15% during the first three
months  of  2002.  Other  time  deposits  also  increased $2,251,827, or 43.63%,
during  the  first  three  months  of  2002.

INVESTMENT  SECURITIES
----------------------

Investment  securities  classified  as  available for sale totaled $4,607,747 at
March 31, 2002.  This represents an increase of $28,518, or .07%, since December
31,  2001.  All  of  our  marketable  investment  securities  were designated as
available-for-sale  at  March  31,  2002.

NONMARKETABLE  EQUITY  SECURITIES
---------------------------------

Nonmarketable  equity securities include the cost of our investment in the stock
of  the Federal Reserve Bank.  The stock has no quoted market value and no ready
market  exists.  Investment  in Federal Reserve Bank stock is required by law of
every national bank.  At March 31, 2002 and December 31, 2001, our investment in
this  stock  totaled  $195,000.

PREMISES  AND  EQUIPMENT
------------------------

Premises  and  equipment,  net  of  depreciation totaled $1,672,713 at March 31,
2002.  Since  December 31, 2001, we made new additions of $47,835, which consist
primarily  of  costs associated with the new Murrells Inlet main office building
and  related  furniture  and  equipment.  The  new  additions  were  offset  by
depreciation  expense  of  $36,476.  As  of  March 31, 2002, we had committed to
spend  approximately $1,370,000 to complete the construction of the main office,
which  should  be  completed  in  the  fourth  quarter  of  2002.


                                        9
<PAGE>
                               SUN BANCSHARES, INC.

ITEM  2.  MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OR  PLAN  OF  OPERATION
          ----------------------------------------------------------------

LOANS
-----

We  experienced  steady growth during the first three months of 2002, especially
in the loan area.  Net loans increased $2,757,909, or 17.16%, during the period.
As  shown  below,  the  main  component  of  growth  in  the  loan portfolio was
commercial  and  industrial which increased $2,480,340, or 28.63%, from December
31, 2001.  Balances within the major loans receivable categories as of March 31,
2002  and  December  31,  2001  are  as  follows:

<TABLE>
<CAPTION>
                             March 31,   December 31,
                               2002          2001
                            -----------  -------------
<S>                         <C>          <C>
Real estate:
   Construction             $   717,608  $     996,432
   Mortgage - residential     5,113,468      4,700,606
Commercial and industrial    11,143,717      8,663,377
Consumer and other            2,069,431      1,877,900
                            -----------  -------------
                            $19,044,224  $  16,238,315
                            ===========  =============
</TABLE>

RISK  ELEMENTS  IN  THE  LOAN  PORTFOLIO
----------------------------------------

There  were  no  risk  elements identified in our loan portfolio as of March 31,
2002.

Activity  in  the  Allowance  for  Loan  Losses  is  as  follows:

<TABLE>
<CAPTION>
                                                           March 31,
                                                   -------------------------
                                                       2002         2001
                                                   ------------  -----------
<S>                                                <C>           <C>
Balance, January 1,                                $   164,787   $   15,000
Provision for loan losses for the period                48,000       35,000
Net loans (charged-off) recovered for the period             -            -
                                                   ------------  -----------

Balance, end of period                             $   212,787   $   50,000
                                                   ============  ===========

Gross loans outstanding, end of period             $19,044,224   $4,386,323
                                                   ============  ===========

Allowance for loan losses to loans outstanding            1.12%        1.14%
</TABLE>

DEPOSITS
--------

At  March  31,  2002,  total  deposits  increased by $4,496,233, or 23.42%, from
December  31,  2001.  The  largest  increase  was  in  other time deposits which
increased  $2,251,827,  or  43.63%,  from  December  31, 2001 to March 31, 2002.
Expressed  as a percentage, total interest bearing deposits increased 29.98% and
noninterest-bearing  deposits  increased  .05%.

Balances  within  the major deposit categories as of March 31, 2002 and December
31,  2001  were  as  follows:

<TABLE>
<CAPTION>
                                       March 31,   December 31,
                                         2002          2001
                                      -----------  -------------
<S>                                   <C>          <C>
Noninterest-bearing demand deposits   $ 4,212,734  $   4,210,483
Interest-bearing demand deposits          944,537        878,031
Savings deposits                        5,372,208      4,038,849
Time deposits $100,000 and over         5,753,298      4,911,008
Other time deposits                     7,413,570      5,161,743
                                      -----------  -------------

                                      $23,696,347  $  19,200,114
                                      ===========  =============
</TABLE>


                                       10
<PAGE>
                               SUN BANCSHARES, INC.

ITEM  2.  MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OR  PLAN  OF  OPERATION
          ----------------------------------------------------------------

LIQUIDITY
---------

We  meet  our  liquidity  needs  through  scheduled  maturities  of  loans  and
investments on the asset side and through pricing policies on the liability side
for  interest-bearing  deposit  accounts.  The level of liquidity is measured by
the loan-to-total borrowed funds ratio which was at 80.37% at March 31, 2002 and
84.57%  at  December  31,  2001.

Securities available-for-sale, which totaled $4,412,747 at March 31, 2002, serve
as  a  ready  source  of liquidity.  We also have lines of credit available with
correspondent  banks  to  purchase  federal  funds for periods from one to seven
days.  At  March  31,  2002,  unused  lines  of  credit  totaled  $1,500,000.


CAPITAL  RESOURCES
------------------

Total  shareholders'  equity  decreased  from $5,442,283 at December 31, 2001 to
$5,283,087 at March 31, 2002.  The decrease is primarily due to the net loss for
the  period  of  $141,415.

The  Federal  Reserve  Board  and  bank regulatory agencies require bank holding
companies  and  financial  institutions  to  maintain capital at adequate levels
based  on  a  percentage of assets and off-balance sheet exposures, adjusted for
risk-weights ranging from 0% to 100%.  Under the risk-based standard, capital is
classified  into  two  tiers.  Tier  1  capital consists of common shareholders'
equity,  excluding  the unrealized gain (loss) on available-for-sale securities,
minus certain intangible assets.  Tier 2 capital consists of the general reserve
for  loan  losses  subject  to certain limitations.  An institutions' qualifying
capital base for purposes of its risk-based capital ratio consists of the sum of
its  Tier  1 and Tier 2 capital.  The regulatory minimum requirements are 4% for
Tier  1  and  8%  for  total  risk-based  capital.

Banks  and  bank  holding companies are also required to maintain a capital at a
minimum  level based on total assets, which is known as the leverage ratio.  The
minimum  requirement for the leverage ratio is 3%, but all but the highest rated
institutions  are  required  to maintain ratios 100 to 200 basis point above the
minimum.  Both  the  Company  and  the  Bank  exceeded  their minimum regulatory
capital  ratios  as  of  March  31,  2002.

The following table summarizes our risk-based capital at March 31, 2002:

<TABLE>
<CAPTION>
<S>                                          <C>
Shareholders' equity                         $ 5,287,405
 Less: intangibles                                     -
                                             ------------
 Tier 1 capital                                5,287,405

Plus: allowance for loan losses (1)              212,787
                                             ------------
   Total capital                             $ 5,500,192
                                             ============

Risk-weighted assets                         $20,634,105
                                             ============

Risk-based capital ratios
  Tier 1 capital (to risk-weighted assets)         25.62%
  Total capital (to risk-weighted assets)          26.66%
  Tier 1 (to total average assets)                 20.23%
<FN>
(1)  limited  to  1.25%  of  risk-weighted  assets
</TABLE>


                                       11
<PAGE>
                               SUN BANCSHARES, INC.

ITEM  2.  MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OR  PLAN  OF  OPERATION
          ----------------------------------------------------------------

REGULATORY  MATTERS
-------------------

From  time  to  time, various bills are introduced in the United States Congress
with  respect  to  the  regulation  of financial institutions.  Certain of these
proposals,  if  adopted,  could significantly change the regulation of banks and
the  financial  services  industry.  We  cannot  predict  whether  any  of these
proposals  will  be adopted or, if adopted, how these proposals would affect us.



                                       12
<PAGE>
                              SUN BANCSHARES, INC.

PART  II  -  OTHER  INFORMATION

ITEM  1.  LEGAL  PROCEEDINGS
----------------------------

Not  applicable.

ITEM  2.  CHANGES  IN  SECURITIES  AND  USE  OF  PROCEEDS
---------------------------------------------------------

Not  applicable.

ITEM  3.  DEFAULTS  UPON  SENIOR  SECURITIES
--------------------------------------------

Not  applicable.

ITEM  4.  SUBMISSION  OF  MATTERS  TO  A  VOTE  OF  SECURITY  HOLDERS
---------------------------------------------------------------------

Not  applicable.

NOTE  5.  OTHER  INFORMATION
----------------------------

Not  applicable.

ITEM  6.  EXHIBITS  AND  REPORTS  ON  FORM  8-K
-----------------------------------------------

(a)  Exhibits

     The following documents are filed as part of this report:

     10.11     Agreement  between  Sun  Bancshares, Inc and Chancel Construction
               Group,  Inc.  dated  March  21,  2002 for the construction of the
               SunBank's  main  office  building.

Reports  on  Form  8-K
----------------------

     (b)     Reports  on  Form  8-K  -  None


                                       13
<PAGE>
                              SUN BANCSHARES, INC.

                                    SIGNATURE

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.




                                   By:     /s/  THOMAS  BOUCHETTE
                                           -------------------------------------
                                           Thomas  Bouchette
                                           President & Chief Executive Officer




Date:  May 13, 2002                By:     /s/  RANDY  L.  CARMON
                                           -------------------------------------
                                           Randy  L.  Carmon
                                           Chief  Financial  Officer



                                       14
<PAGE>