UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549


                                   FORM 10-QSB

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

                    FOR QUARTERLY PERIOD ENDED MARCH 31, 2000


                             Commission File Number
                                    000-28037

                            FIRST SOUTH BANCORP, INC.
                     (Exact Name of Small Business Issuer )

     SOUTH CAROLINA                                       57-1086258
(State of Incorporation)                    (IRS Employer Identification Number)




                               1450 Reidville Road
                        Spartanburg, South Carolina 29306
                     (Address of Principal Executive Office)

                                 (864) 595-0455
                           (Issuer's Telephone Number)




Check  whether  the issuer  (1) has filed all  reports  required  to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter period that the issuer was required to file such  reports),  and (2) has
been subject to such filing requirements for the past 90 days. YES [X] N0 [ ]


State the number of shares outstanding of each of the issuer's classes of common
equity,  as of the latest  practical date:  Common Stock, no par value,  917,180
shares outstanding on March 31, 2000.

Transitional Small Business Disclosure Format (Check one)  YES  [ ]  NO [X]







<PAGE>









                            FIRST SOUTH BANCORP, INC.

                                   FORM 10-QSB

                                      INDEX


PART I - FINANCIAL INFORMATION                                              Page

         Item 1.  Financial Statements

                  Balance Sheets ........................................      3

                  Statement of Operations ...............................      4

                  Statement of Comprehensive Income .....................      5

                  Statement of Cash Flows ...............................      6

                  Notes to Unaudited Statements .........................      7




         Item 2.  Management's Discussion and Analysis ..................   8-17


Part II -         OTHER INFORMATION


         Item 6.  Exhibits and Reports on Form 8-K ......................     18


SIGNATURES ..............................................................     19






                                       2
<PAGE>

                         PART I - FINANCIAL INFORMATION

                          Item 1 - Financial Statements

                    FIRST SOUTH BANCORP, INC. AND SUBSIDIARY

                           Consolidated Balance Sheets
                                 (In thousands)
<TABLE>
<CAPTION>

                                                                                                  (Unaudited)
                                                                                                    March 31            December 31
                                                                                                      2000                   1999
                                                                                                      ----                   ----
Assets
<S>                                                                                                <C>                     <C>
Cash & due from banks ..............................................................               $  1,547                $    978
Due from banks - interest bearing ..................................................                  4,814                      12
Federal funds sold .................................................................                      0                   2,850
Investment securities ..............................................................                 10,295                  10,347
Loans ..............................................................................                 64,135                  56,944
    Allowance for loan losses ......................................................                   (835)                   (800)
                                                                                                   --------                --------
Loans - net ........................................................................                 63,300                  56,144
Property & equipment, net ..........................................................                  3,078                   2,863
Other assets .......................................................................                  2,111                   1,867
                                                                                                   --------                --------

          Total assets .............................................................               $ 85,145                $ 75,061
                                                                                                   ========                ========

Liabilities
Deposits
Noninterest-bearing ................................................................               $  3,465                $  3,389
Interest-bearing ...................................................................                 68,233                  55,326
                                                                                                   --------                --------
          Total deposits ...........................................................                 71,698                  58,715
Other liabilities ..................................................................                  2,398                   5,437
                                                                                                   --------                --------
          Total liabilities ........................................................                 74,096                  64,152

Shareholders' equity
Common stock - no par value;
20,000,000 authorized - issued 917,180 .............................................                  4,586                   4,586
Additional paid-in capital .........................................................                  6,504                   6,504
Accumulated earnings ...............................................................                    186                      14
Accumulated other comprehensive income/(loss) ......................................                   (227)                   (195)
                                                                                                   --------                --------
           Total shareholders' equity ..............................................                 11,049                  10,909

           Total liabilities and shareholders' equity ..............................               $ 85,145                $ 75,061
                                                                                                   ========                ========
</TABLE>

                                       3
<PAGE>

                    FIRST SOUTH BANCORP, INC. AND SUBSIDIARY
                      Consolidated Statement of Operations

<TABLE>
<CAPTION>
                                                                                                            (Unaudited)
                                                                                                       Period ended March 31
                                                                                                            Three Months
                                                                                                      2000                    1999
                                                                                                      ----                    ----
                                                                                            (Dollars in thousands, except per share)
Interest income
<S>                                                                                                   <C>                     <C>
         Loans, including fees .....................................................                  $1,504                  $  871
         Investment securities .....................................................                     150                     152
         Federal funds sold ........................................................                      37                      42
         Other investments .........................................................                       3                      19
                                                                                                      ------                  ------
         Total interest income .....................................................                   1,694                   1,084

Interest expense
         Deposits and borrowings ...................................................                     866                     519

Net interest income ................................................................                     828                     565
Provision for loan losses ..........................................................                      35                      30
Net interest income after provision ................................................                     793                     535

Other income
         Service charges on deposit accounts .......................................                      31                      31
         Other income ..............................................................                      93                      45
                                                                                                      ------                  ------
         Total other income ........................................................                     124                      76

Other expenses
         Salaries and benefits .....................................................                     410                     269
         Occupancy and equipment ...................................................                      98                      86
         Other expense .............................................................                     181                     123
                                                                                                      ------                  ------
         Total other expense .......................................................                     689                     478

Income before income taxes .........................................................                     228                     133
         Income taxes ..............................................................                      56                      50
                                                                                                      ------                  ------
Net income .........................................................................                  $  172                  $   83
                                                                                                      ======                  ======

Earnings per common share ..........................................................                  $  .19                  $  .09

Diluted earnings per common share ..................................................                  $  .18                  $  .09
</TABLE>



                                       4
<PAGE>



                    FIRST SOUTH BANCORP, INC. AND SUBSIDIARY

                 Consolidated Statement of Comprehensive Income
                                     (000's)

                                                             (Unaudited)
                                                    Three  Months Ended March 31
                                                         2000             1999
                                                         ----             ----


Net Income ......................................       $ 172           $  83

Other comprehensive income (loss):
Change in unrealized holdings gains &
    losses on available for sale securities .....         (52)            (55)

Income tax (expense) benefit on other
                comprehensive income (loss) .....          20              21
                                                        -----           -----
Total other comprehensive income (loss) .........         (32)            (34)

Comprehensive income (loss) .....................         140              49
                                                        =====           =====


















                                       5
<PAGE>



                    FIRST SOUTH BANCORP, INC. AND SUBSIDIARY

                      Consolidated Statement of Cash Flows
               For the three Months ended March 31, 2000 and 1999


<TABLE>
<CAPTION>
                                                                                                                 (Unaudited)
                                                                                                      Three Months      Three Months
                                                                                                           Ended            Ended
                                                                                                         March 31          March 31
                                                                                                           2000              1999
                                                                                                           ----              ----
                                                                                                            (Dollars in thousands)
Operating Activities
<S>                                                                                                      <C>                 <C>
Net income ...................................................................................           $   172             $   83
Adjustments to reconcile net income to net cash
         provided by operating activities
         Provision for loan losses ...........................................................                35                 30
         Depreciation ........................................................................                44                 43
         Director fees .......................................................................                 8                  7
         Increase in other assets ............................................................              (355)              (242)
         Increase (decrease) in accrued expenses and other liabilities .......................              (200)                95

Net cash provided by operating activities ....................................................              (296)                16


Investing Activities
         Purchase of restricted FHLB stock ...................................................                 0                (59)
         Origination of loans, net of principal collected ....................................            (7,133)            (4,551)
         Purchase of premises and equipment ..................................................              (200)               (20)

Net cash used in investing activities ........................................................            (7,333)            (4,630)

Financing Activities
         Net increase in deposits ............................................................            12,983              1,768
         Net increase in retail repurchase agreements ........................................              (332)               574
         Payment (decrease) of other borrowings ..............................................            (2,500)                 0

Net cash provided (used) by financing activities .............................................            10,151              2,342

Net increase (decrease) in cash and cash equivalents .........................................             2,522             (2,272)

Cash and cash equivalents, beginning .........................................................             3,840              5,220

Cash and cash equivalents, ending ............................................................             6,363              2,948
</TABLE>








                                       6
<PAGE>


                    FIRST SOUTH BANCORP, INC. AND SUBSIDIARY

Notes to Unaudited Consolidated  Financial Statements

Note 1.  Basis of Presentation

              The accompanying unaudited financial statements have been prepared
in  accordance  with  generally  accepted  accounting   principles  for  interim
financial  information  and with  instructions to Form 10-QSB and Item 310(b) of
Regulation SB of the Securities and Exchange  Commission.  Accordingly,  they do
not contain all of the information and footnotes  required by generally accepted
accounting principles for complete financial statements. However, in the opinion
of management, all adjustments considered necessary for a fair presentation have
been included.  Operating  results for the three months ended March 31, 2000 are
not  necessarily  indicative  of the results  that may be expected  for the year
ended December 31, 2000. For further information,  please refer to the financial
statements  and footnotes  thereto for First South  Bancorp,  Inc.'s fiscal year
ended December 31, 1999, contained in First South Bancorp,  Inc.'s annual report
on Form 10-KSB for the year ended December 31, 1999.

Note 2.  Organization

         First  South  Bancorp,  Inc.,  (the  "Company")  is  a  South  Carolina
corporation  organized  in 1999 for the  purpose of being a holding  company for
First South Bank (the  "Bank").  On September  30,  1999,  pursuant to a Plan of
Exchange approved by the shareholders,  all of the outstanding shares of capital
stock of the Bank were exchanged for shares of common stock of the Company.  The
Company  presently engages in no business other than that of owning the Bank and
has no employees.


























                                       7
<PAGE>



                            FIRST SOUTH BANCORP, INC.

                                 Part I - Item 2

 Management's Discussion and Analysis or Plan of Operation

The  following  discussion  should  be read in  conjunction  with the  financial
statements  and  related  notes and more  detailed  information  provided in the
Company's Annual Report on Form 10-KSB.  Because all of the Company's operations
have thus far been conducted through a subsidiary bank, the following discussion
will refer to the results of operations and financial condition of the Bank.

Statements  included  in  Management's  Discussion  and  Analysis  which are not
historical  in nature are intended to be, and are hereby  identified as "forward
looking  statements"  for purposes of the safe harbor provided by Section 21E of
the Securities  Exchange Act of 1934, as amended.  The Company  cautions readers
that forward looking statements, including without limitation, those relating to
the Company's new office, future business prospects,  revenues, working capital,
liquidity,  capital needs,  interest costs,  and income,  are subject to certain
risks and  uncertainties  that could cause actual  results to differ  materially
from those indicated in the forward looking statements, due to several important
factors herein identified,  among others, and other risks and factors identified
from  time to time in the  Company's  reports  filed  with  the  Securities  and
Exchange Commission.

Results of Operations

During 1999,  management of the Company  implemented  specific  plans to achieve
strategic objectives of balance sheet growth and improved earnings  performance.
A primary component in these plans was the expansion into a new market which had
the greatest  potential for providing an environment which would enable the bank
to attain these objectives.  Accordingly,  branch operations were established in
Columbia, S.C. on March 20, 2000. Though operational for only twelve days in the
first quarter period,  early results from the Columbia  operations have provided
an optimistic outlook on the contribution to growth and earnings this new market
will provide.

Assets for the first three months of 2000  increased 13.4 %, compared to a 4.4 %
increase for the same period in 1999.  Deposits grew during in the first quarter
of 2000 by 22.1 %, well-above the 4.1 % growth during the first quarter of 1999.
Pretax  income for the first  quarter of 2000 was $ 171,947,  a 106.9 % increase
over the first quarter 1999 amount of $83,101.



                                       8
<PAGE>

The  Bank's  primary  source  of  income is net  interest  income,  which is the
difference between interest earned and interest paid. The net interest margin is
net interest  income as a percentage  of average  earning  assets.  Net interest
margin for the three months period ended March,  2000, was 4.55 % , up from 4.39
% for the same period in 1999.  Net interest  expense,  which is  primarily  the
amount of interest paid to  depositors,  increased by 53 basis points from 5.01%
in 1999 to 5.54 % in 2000.  Interest income,  primarily  interest  received from
loans and to a lesser  degree  the  interest  earned on the  Bank's  investments
portfolio,  increased 89 basis points from 8.42 % in 1999 to 9.31 % in 2000. The
most notable factor contributing to the increase in the earning assets yield and
the net  interest  margin was the  increase  in loans as a  percentage  of total
earning assets.  With loans having the highest interest yield of any category of
earning assets, the increase in the percentage of loans to total earning assets,
81.9 % in 2000 compared to 70.0 % in 1999, had a significant  positive effect on
net interest income.  Conversely, the increase in the average cost of funds rate
on   interest-bearing   liabilities  of  53  basis  points  served  to  restrain
improvement  in net  interest  earnings.  The rates earned on assets and paid on
interest-bearing  liabilities  are  expected  to continue  to be  influenced  by
competition for quality loan customers as well as government fiscal and monetary
policies.

The Bank's  allowance for loan losses is analyzed  monthly in accordance  with a
board  approved  plan . This  judgmental  analysis  is based  upon a model  that
assigns  a risk  rating  on  individual  loans  and  considers  the  loss  risks
associated  with the various risk  categories in relationship to the current and
forecasted economic environment. The Bank also monitors the overall portfolio as
well as the level of reserves  maintained by peer banks.  The monthly  provision
for loan losses may fluctuate based on the results of this analysis.

For the period ending March 31, 2000,  noninterest income was $124,000, a 63.2 %
increase over the $76,000  amount  received  during the same period in 1999. The
$48,000 increase  resulted  primarily from the commissions and fees generated by
the  full-service  brokerage  operations of the Bank's  subsidiary,  First South
Financial  Services,  Inc.  Service charge income remained the same in the first
quarter of 2000  compared to the same period in 1999.  This  situation  resulted
from the rise in the  interest  rate of 3 month  t-bills,  the rate  upon  which
corporate  deposits  are provided an earnings  allowance on account  balances to
reduce or offset monthly activity service charges.

Through March 31, 2000,  operating  expenses as a percentage  of average  assets
increased in 2000 from that of 1999 by 12 basis  points,  to 3.52 % from 3.40 %.
Total  operating  expenses for the period ending March 31 increased in 2000 over
1999 by $211,000,  or 44.1 %. While a portion of this increase can be attributed
to the growth the Bank  experienced  since the end of the first quarter of 1999,
the additional cost of establishing a branch office in the first quarter of 2000
added  significantly  to the  total  noninterest  expense  increase.  Management
continues to be challenged  to hold  operating  expenses at a level  adequate to
support growth while achieving favorable operating efficiency ratios.



                                       9
<PAGE>

Financial  institutions  are  subject to  interest  rate risk to the degree that
their interest bearing liabilities (consisting principally of customer deposits)
mature or reprice more or less frequently,  or on a different basis,  than their
interest  earning  assets ( generally  consisting of  intermediate  or long-term
loans and investment securities).  The match between the scheduled repricing and
maturities of the Bank's earning assets and interest bearing  liabilities within
defined time periods is referred to as "gap"analysis. The Bank's Asset/Liability
Management  Committee is  responsible  for managing  the risks  associated  with
changing interest rates and their impact on earnings.  The regular evaluation of
the  sensitivity  of net  interest  income to  changes in  interest  rates is an
integral  part of  interest  rate  risk  management.  At  March  31,  2000,  the
cumulative  one-year  gap for the Bank was a  negative  or  liability  sensitive
$3,237,000,  or 3.8 % of  total  assets.  At  March  31,  2000,  the  cumulative
five-year gap for the Bank was a positive $7,027,000,  or 8.3 % of total assets.
A positive  gap means that  assets  would  reprice  faster than  liabilities  if
interest rates changed and with a negative gap  liabilities  reprice faster than
assets.  The Bank's gap is within its policy  limits which were  established  to
reduce the adverse  impact on earnings  which  movements  in interest  rates can
cause.  Intense  competition in the Bank's market  continues to pressure quality
loan rates downward while conversely pressuring deposit rates upward.

For the period  ending March 31,  2000,  as compared to the same period in 1999,
the Bank's average assets  increased by 39.0 %. Asset growth is directly related
to deposit growth and the funds available to the Bank for investment. The growth
in average  deposits  reflected at quarter end for the first  quarter of 2000 of
$19.7 million, or 45.3% over average deposits for the same period in 1999, would
not have been  allowed to occur,  however,  had there not been a strong  quality
loan demand during the same period.  Average loan outstandings through March 31,
2000,  increased $23.4 million or 64.1% over the same period's  average in 1999.
The  availability  of  local  deposits  in 2000  has  allowed  the  Bank to take
advantage  of the  lending  opportunities  created by the  strength of the local
economy without funding loan growth with other borrowed funds.

From March 31, 1999, until March 31, 2000, the Bank's nonpersonal loan portfolio
grew by $18.9 million, or 61.2 %, as the Bank has developed growth opportunities
in commercial and commercial real estate related  business loans.  While average
balances of loans secured by real estate have increased significantly,  the Bank
believes prudent real estate lending has provided excellent collateral for loans
with a variety of purposes. Management believes the Bank is not dependent on any
single group of customers  concentrated in any particular industry whose decline
in performance would have a material adverse effect on operations.



                                       10
<PAGE>

The  following  tables are  provided to assist the reader in  understanding  the
results of operations and financial condition.


Table One
                Net interest Income and Average Balance Analysis
                       for the Three Months Ended March 31
                                  2000 and 1999
                                    (000's)

<TABLE>
<CAPTION>
                                                        Interest                      Average
Interest-Earning Assets (000's)                      Average Balance               Income/Expense                  Yield / Cost
                                                    2000           1999           2000           1999           2000           1999
                                                    ----           ----           ----           ----           ----           ----
<S>                                              <C>            <C>             <C>            <C>             <C>            <C>
Federal Funds Sold .......................       $  2,564       $  3,613        $    37        $    42          5.79%         4.75%
Investments ..............................         10,661         12,059            153            171          5.76%         5.68%
Loans ....................................         59,946         36,519          1,504            871         10.09%         9.67%
                                                 --------       --------        -------        -------
Total Interest Earning Assets ............       $ 73,171       $ 52,191        $ 1,694        $ 1,084          9.31%         8.42%

Noninterest-Earning Assets
Cash & Due From Banks ....................       $  1,400          1,228
Investments: Fair Value ..................           (369)           (30)
Loan Loss Reserve ........................           (812)          (576)
Premises & Equipment .....................          2,884          2,860
Interest Receivable & Other ..............          1,941            578
                                                 --------       --------
Total Noninterest-Earning Assets .........       $  5,044          4,060

TOTAL ASSETS .............................       $ 78,215         56,251
                                                 ========       ========
Interest-Bearing Liabilities
NOW, Savings, Money Market ...................    $18,319         14,213        $   214            150           4.71%        4.29%
Time Deposits & IRA's ........................     41,474         26,225            611            354           5.93%        5.48%
Fed Funds Purchased & Repos ..................      1,727          1,426             22             14           5.05%        3.98%
Demand Notes Issued to Treasury ..............        180             99              2              1           3.58%        4.10%
Other Borrowed Funds .........................      1,199              0             17              0           5.84%           0%
Total Interest-Bearing Liabilities ...........    $62,899         41,963        $   866        $   519           5.54%        5.01%

Noninterest-Bearing Liabilities
Demand Deposits ..............................    $ 3,449         3,122
Interest Payable .............................        546           335
Other Liabilities ............................        300           190
                                                  -------       -------
Total Noninterest-Bearing Liabilities ........    $ 4,295         3,647

Stockholders' Equity .........................    $11,021        10,641

Total Liabilities & Equity ...................    $78,215        56,251
                                                  =======       =======
Net Interest Income                                                             $   828        $  565
Net Yield on Earning Assets                                                                                      4.55%        4.39%
Interest Rate Spread                                                                                             3.77%        3.41%
</TABLE>

Numerous  factors  contributed to an improved net interest margin from the first
quarter of 1999 to the first quarter of 2000. Most significant of these were:

(1)  The  category of earning  assets with the highest  interest  yield,  loans,
     increased as a percentage of total earning assets from 70.0 % to 81.9 %;
(2)  The bank was asset  sensitive  in a rising rate  environment  resulting  in
     earning assets repricing more frequently than interest-bearing liabilities.



                                       11
<PAGE>

Not all of the balance sheet changes in the first quarter of 2000 had a positive
effect on the net interest margin,  however.  With loan growth outpacing deposit
growth,  the  necessity to  partially  fund loan growth from  off-balance  sheet
sources,  specifically  FHLB  advances,  resulted  in the  reliance on a funding
source  with a higher  cost of funds rate than rates paid on most of the deposit
categories.

Table Two
                      Summary of Total Noninterest Income
                       for the Three Months Ended March 31
                                  2000 and 1999
                                     (000's)

                                                             2000           1999
                                                             ----           ----
Service Charges ................................            $ 31            $ 31
Commissions & Fees * ...........................              69              25
Other Noninterest Income .......................              24              20
                                                            ----            ----
Total ..........................................            $124            $ 76

* This $44,000 increase was almost totally  attributed to commissions  generated
by the full-service brokerage subsidiary, First South Financial Services, Inc.

Table Three
                      Summary of Total Noninterest Expense
                       For the Three Months Ended March 31
                                  2000 and 1999
                                     (000's)
                                                             2000           1999
                                                             ----           ----
Salaries & Employee Benefits * ...................           $410           $269
Occupancy & Equipment ............................             98             86
Other ............................................            181            123
                                                             ----           ----
Total ............................................           $689           $478

* $74,000 of the total  $141,000  (52.5 %)  increase in  salaries  and  employee
benefits expense resulted from staffing the new office in Columbia, S.C.



                                       12
<PAGE>


Table Four
                               Analysis of Loans
                            March 31 Balances (000's)

                                                     2000               1999
                                                     ----               ----
Real Estate:
Construction & Land Development ..........   $ 9,550    14.9%   $ 3,070     7.6%
1-4 Family Residential Properties ........    13,726    21.4%     8,804    21.8%
Multifamily Residential Properties .......       727     1.1%       630     1.6%
Nonfarm Nonresidential Properties ........    20,589    32.1%    15,856    39.2%
Other Real Estate Loans ..................       549      .9%       423     1.0%
Commercial & Industrial ..................    17,980    28.0%    10,900    27.0%
Consumer .................................       462      .7%       634     1.6%
Other ....................................       552      .9%        93      .2%
                                             =======            =======
TOTAL ....................................   $64,135   100.0%   $40,410   100.0%

Table Five
               Analysis of Loan Maturities and Repricing Frequency
                          as of March 31, 2000 (000's)

<TABLE>
<CAPTION>
                                             Within         > 3 Months       > 1 Year      > 3 Years          Over
                                            3 Months        12  Months       3  Years        5 Years         5 Years          Total
                                            --------        ----------       --------        -------         -------          -----
<S>                                          <C>             <C>             <C>             <C>             <C>             <C>
Variable Rate Loans ................         $56,460         $               $               $               $               $56,460

Fixed Rate Loans ...................           1,672           1,573           2,131           1,046             225           6,647
                                             -------         -------         -------         -------         -------         -------
Total Loans** ......................         $58,132         $ 1,573         $ 2,131         $ 1,046         $   225         $63,107
</TABLE>

** Total excludes loans on nonaccrual of $1,028

Table Six
                    Analysis of the Allowance for Loan Losses
                       for the Three Months Ended March 31

                                                        2000              1999
                                                        ----              ----
Balance at Beginning of Year ................        $ 800,000        $ 575,000
Provision Charged to Operations .............           35,000           30,340
Loans Charged-off ...........................                0             (400)
Loan Recoveries .............................                0               60
                                                     ---------        ---------
Balance at End of Year ......................        $ 835,000        $ 605,000

Total  loans  past due 30 days or more on 3/31/00  were two loans on  nonaccrual
status totaling  $1,028,000 and one loan secured by real estate in the amount of
$150,000.


                                       13
<PAGE>

Table Seven

                        Analysis of Investment Securities
                              as of March 31, 2000
                                     (000's)

<TABLE>
<CAPTION>
                                                                     Available for Sale                       Held for Investment
                                                                     ------------------                       -------------------
                                                                 Amortized           Fair              Amortized             Fair
                                                                   Cost              Value                Cost               Value
                                                                   ----              -----                ----               -----

<S>                                                              <C>                 <C>                 <C>                 <C>
Due in one year or less ............................             $     0             $     0             $     0             $     0
Due from one to five years .........................               9,000               8,687                   0                   0
Due from five to ten years .........................               1,000                 957                   0                   0
Due After ten years ................................                 123                 112                 375                 355
FHLB Stock .........................................                                                         164                 164
                                                                 =======             =======             =======             =======
                                                                 $10,123             $ 9,756             $   539             $   519
</TABLE>

At March 31, 2000, securities with a carrying value of approximately  $2,880,000
were pledged to secure retail repurchase  agreements and Treasury,  tax and loan
deposits.  The securities  portfolio at 3/31/00 had a weighted  average yield of
5.76%.




                                       14
<PAGE>


Table Eight

    Distribution of Interest-Earning Assets and Interest-Bearing Liabilities
                     Repricing Schedule as of March 31, 2000
                                     (000's)

<TABLE>
<CAPTION>
                                                                   One Year         Over One Year           Over
                                                                   or Less          to Five Years        Five Years            Total
                                                                   -------          -------------        ----------            -----
Interest Earning Assets
<S>                                                               <C>                 <C>                <C>                <C>
Due From Banks: Int.-bearing ..........................           $  4,814            $      0           $      0           $  4,814
Investment Securities (Book Value) ....................                  0               9,000              1,498             10,498
FHLB Stock ............................................                164                   0                  0                164
Loans (Excludes nonaccruals) ..........................             59,705               3,177                225             63,107
                                                                  ========            ========           ========           ========
Total .................................................           $ 64,683            $ 12,177           $  1,723           $ 78,583

Interest-Bearing Liabilities
NOW Accounts ..........................................           $ 17,966            $      0           $      0           $ 17,966
Savings & MMIA ........................................              2,428                   0                  0              2,428
Time Deposits:$100m & > ...............................             15,240                 200                  0             15,440
Time Deposits: < $100m ................................             30,686               1,713                  0             32,399
Repurchase Agreements .................................              1,391                   0                  0              1,391
TT&L Demand Note Funds ................................                209                   0                  0                209
                                                                  ========            ========           ========           ========
Total .................................................           $ 67,920            $  1,913           $      0           $ 69,833

Period  Gap ...........................................           ($ 3,237)           $ 10,264           $  1,723           $  8,750

Cumulative Gap ........................................           ($ 3,237)           $  7,027           $  8,750

Period Gap Ratios:
 Interest Sensitive Assets to
 Interest Sensitive Liabilities .......................             (95.2%)             639.9%

Cumulative Gap Ratios:
  Interest Sensitive Assets to
  Interest Sensitive Liabilities ......................             (95.2%)             110.0%
</TABLE>


                                       15
<PAGE>

<TABLE>
<CAPTION>
                                                             3 Months           Over 3 Months            Over One
                                                              & Less             to 12 Months              Year              Total
                                                              ------             ------------              ----              -----
<S>                                                           <C>                  <C>                  <C>                  <C>
Time Deposits
$100,000 and Greater ...........................              $ 5,146              $10,094              $   200              $15,440
</TABLE>



Table Nine

                                 Selected Ratios
                         for the Periods Ending March 31

                                                          2000           1999
                                                          ----           ----
Return on Average Assets .......................          .88%           .60%

Return on Average Equity .......................         6.26%          3.16%

Dividend Payout Ratio ..........................          N/A             N/A

Average Stockholders Equity
as a Percentage of Average Assets ..............        14.09%         18.92%




                                       16
<PAGE>

Liquidity

Liquidity  is the  ability  to  meet  current  and  future  obligations  through
liquidation or the maturity of existing  assets or the acquisition of additional
liabilities.  Adequate  liquidity  is  necessary  to meet  the  requirements  of
customers for loans and deposit  withdrawals  in the most timely and  economical
manner. Some liquidity is ensured by maintaining assets which may be immediately
converted  into cash at minimal cost  (amounts due from banks and federal  funds
sold).  However,  the most  manageable  sources of  liquidity  are  composed  of
liabilities, with the primary focus on liquidity management being the ability to
obtain  deposits  within the Bank's service area.  Core deposits (total deposits
less wholesale time deposits) provide a relatively stable funding base, and were
equal to 66.2 % of total assets at March 31, 2000.  Asset  liquidity is provided
from several sources,  including  amounts due from banks and federal funds sold,
and funds from maturing loans.  The Bank is a member of the FHLB of Atlanta and,
as such,  has the  ability  to borrow  against  the  security  of its 1-4 family
residential  mortgage loans.  The bank also has $5.1 million  available  through
lines of credit with other banks as an additional  source of liquidity  funding.
Management  believes that the Bank's overall  liquidity  sources are adequate to
meet its operating needs.

Capital Resources

Between the first quarter ending periods of 2000 and 1999, equity capital of the
Bank  increased  $617,465.  With  $23,607 of this  increase  resulting  from the
additional sale of stock, $593,858 was due to the increase in retained earnings.

The Bank is  subject to  regulatory  capital  adequacy  standards.  Under  these
standards,  financial  institutions  are  required to maintain  certain  minimum
capital  ratios of capital to  risk-weighted  assets and average  total  assets.
Under the provisions of the Federal Deposit  Insurance  Corporation  Improvement
Act of 1991, federal financial institutions  regulatory authorities are required
to implement prescribed "prompt corrective action" upon the deterioration of the
capital position of a bank. If the capital  position of an affected  institution
were to fall below certain levels,  increasingly stringent regulatory corrective
actions are mandated.

The Bank's March 31, 2000 capital  ratios are presented in the following  table,
compared  with  the  "well  capitalized"  and  minimum  ratios  under  the  FDIC
regulatory definitions and guidelines:

<TABLE>
<CAPTION>
                                                                                                             To be well capitalized
                                                                                      For capital            under prompt corrective
As of March 31, 2000                                          Actual               adequacy purposes            action provisions
(000's)                                                       ------               -----------------            -----------------
                                                                                          Minimum                     Minimum
                                                                                          -------                     -------
                                                     Amount           Ratio        Amount          Ratio         Amount       Ratio
                                                     ------           -----        ------          -----         ------       -----
<S>                                                 <C>               <C>         <C>               <C>        <C>             <C>
Total Capital (to risk ....................         $12,111           17.7%       $ 5,479           8.0%       $ 6,848         10.0%
weighted assets)

Tier 1 Capital (to risk ...................         $11,276           16.5%       $ 2,739           4.0%       $ 4,109          6.0%
weighted assets)

Tier 1 Capital (to ........................         $11,276           14.3%       $ 3,143           4.0%       $ 3,929          5.0%
average assets) (leverage)
</TABLE>




                                       17
<PAGE>


                           PART II - OTHER INFORMATION



Item 6 - Exhibits and Reports on Form 8-K

         (a)      Exhibits

                  Exhibit No.
                  from Item 601 of
                  Regulation S-B            Description
                  --------------            -----------
                        27                  Financial Data Schedule


         (b)      Reports on Form 8-K :    None




























                                       18
<PAGE>



SIGNATURE

In accordance with the  requirements of the Exchange Act, the registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.


                                   First South Bancorp, Inc.

                                   s/Barry L. Slider
May 10, 2000                       ---------------------------------------------
                                   Barry L. Slider, President and Chief
                                   Executive Officer


                                   s/V. Lewis Shuler
                                   ---------------------------------------------
                                   V. Lewis Shuler, Executive Vice President
                                   (Principal Accounting Officer)






                                       19

<PAGE>


                                 EXHIBIT INDEX


Exhibit No.                   Description                        Page

   27                         Financial Data Schedule










                                       20