U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   FORM 10-KSB
(Mark  One)

[X]       Annual  report  pursuant  to  Section  13  or  15(d) of the Securities
          Exchange  Act  of  1934

For  fiscal  year  ended  DECEMBER  31,  2001
                          -------------------

[ ]       Transition report under Section 13 or 15(d) of the Securities Exchange
          Act  of  1934

          For  the  transition  period  from  ______________to  _______________

          Commission  file  number  333-30182

                            SUN  BANCSHARES,  INC.
--------------------------------------------------------------------------------
                 (Name of small business issuer in its charter)

       SOUTH  CAROLINA                                 58-2466380
------------------------------------        ------------------------------------
  (State  or other jurisdiction of                  (I.R.S. Employer
  incorporation  or  organization)                 Identification No.)

4367 RIVERWOOD DRIVE, MURRELLS INLET, S. CAROLINA            29576
-------------------------------------------------         -----------
   (Address  of  Principal  Executive  Offices)           (Zip  Code)

Securities registered pursuant to Section 12(b) of the Act:    NONE.

Securities registered pursuant to Section 12(g) of the Act:    NONE.

Check whether the issuer:  (1) 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 registrant was required to file such reports), and (2) has been
subject  to  such  filing  requirements  for past 90 days.  Yes  X      No
                                                                ---        ---

Check  if there is no disclosure of delinquent filers in response to Item 405 of
Regulation  S-B  is  not  contained  in  this  form,  and  no disclosure will be
contained,  to  the  best  of  registrant's  knowledge, in definitive proxy or a
information statements incorporated by reference in Part III of this Form 10-KSB
or  any  amendment  to  this  Form  10-KSB.  [X]

State issuer's revenues for its most recent fiscal year:     $1,148,677

State the aggregate market value of the voting and non-voting common equity held
by  non-affiliates  computed  by  reference  to the price at which the stock was
sold,  or  the  average  bid  and  asked  prices  of such common equity, as of a
specified date within the past 60 days:  AS OF MARCH 13, 2002, 261,150 SHARES OF
THE  COMPANY'S  COMMON  STOCK WERE HELD BY NON-AFFILIATES.  THE AGGREGATE MARKET
VALUE  OF  THESE  SHARES  WAS $1,906,395 AS OF MARCH 13, 2002, BASED ON THE LAST
PRICE  OF  $7.30  PER  SHARE  AS  REPORTED  ON  THE  OTC  BULLETIN  BOARD.

                    APPLICABLE ONLY TO CORPORATE REGISTRANTS

     State  the  number of shares outstanding of each of the issuer's classes of
common  equity, as of the latest practicable date. 715,000 AS OF MARCH 25, 2002.

                       DOCUMENTS INCORPORATED BY REFERENCE

     Portions  of  the  Annual  Report to Shareholders for the fiscal year ended
December  31,  2001  are  incorporated  by  reference  into  Part  II.

     Transitional Small Business Disclosure format (check one):  Yes      No  X
                                                                     ---     ---


<PAGE>
<TABLE>
<CAPTION>
                                TABLE OF CONTENTS

<S>                                                                            <C>
PART I. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   3

  ITEM 1.     DESCRIPTION OF BUSINESS . . . . . . . . . . . . . . . . . . . .   3
  ITEM 2.     DESCRIPTION OF PROPERTIES . . . . . . . . . . . . . . . . . . .  15
  ITEM 3.     LEGAL PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . . .  15
  ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS . . . . . .  16

PART II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  16

  ITEM 5.     MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
              MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . .  16
  ITEM 6.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
              RESULTS OF OPERATIONS . . . . . . . . . . . . . . . . . . . . .  16
  ITEM 7.     FINANCIAL STATEMENTS. . . . . . . . . . . . . . . . . . . . . .  16
  ITEM 8.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
              FINANCIAL DISCLOSURE. . . . . . . . . . . . . . . . . . . . . .  17

PART III. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  17

  ITEM 9.     DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
              COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT . . . . . . .  17
  ITEM 10.    EXECUTIVE COMPENSATION. . . . . . . . . . . . . . . . . . . . .  19
  ITEM 11.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.  21
  ITEM 12.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. . . . . . . . .  23
  ITEM 13.    EXHIBITS, LISTS AND REPORTS ON FORM 10-KSB. . . . . . . . . . .  24
</TABLE>


                                        2
<PAGE>
                                     PART I


ITEM  1.     DESCRIPTION  OF  BUSINESS

                              SUN BANCSHARES, INC.

     Sun Bancshares, Inc. (the "Company") was incorporated as a South Carolina
corporation on August 3, 1999, and became a bank holding company by acquiring
all of the issued and outstanding common stock of SunBank (the "Bank"), Murrells
Inlet, South Carolina. The Bank began operations in November 2000 and is the
only subsidiary of the Company.

     The Company was organized because we believe it provides flexibility that
would otherwise not be available. For example, the holding company structure
makes it easier to raise capital for the Bank because the Company is able to
issue securities without the need for prior banking regulatory approval, and the
proceeds of debt securities issued by the Company can be invested in the Bank as
primary capital.

                                     SUNBANK

GENERAL

     The Bank was chartered as a national bank under the laws of the United
States and began business on November 15, 2000 as a full-service commercial
bank. The Bank offers personal and business checking accounts, money market
accounts, savings accounts and various certificates of deposit and individual
retirement accounts. The Bank also offers commercial, real estate, installment
and other consumer loans. The Bank's real estate loans include commercial real
estate, construction and development and residential real estate loans. In
addition, the Bank provides such services as cashier's checks, safe-deposit
boxes, traveler's checks, bank by mail, direct deposit and U.S. Savings Bonds.
The Bank also offers Mastercard(R) and Visa(R) credit card services through a
correspondent bank as an agent.

PHILOSOPHY

     Our motto is "Your community Your bank." Through our localized management
and ownership we believe we are uniquely situated to provide responsive service
and quality financial products that are tailored to meet the needs of the
individuals and small- to medium-sized businesses located throughout our market
area. We believe that local ownership and control allows the Bank to serve its
customers more efficiently, helping us to grow both our deposit base and loan
portfolio. We have adopted this philosophy in order to attract customers and
acquire market share now controlled by other financial institutions operating in
our market area.

MARKET  AREA  AND  COMPETITION

     The Bank's primary service area includes southern Horry County and most of
Georgetown County. This area, commonly referred to as the "South Strand" or
"Waccamaw Neck," encompasses the coastal communities south of Myrtle Beach,
including Socastee, Surfside Beach, Garden City Beach, Murrells Inlet,
Litchfield Beach, Pawleys Island, DeBordieu and Georgetown.

     The Bank competes with other commercial banks, savings and loan
associations, credit unions, money market mutual funds and other financial
institutions conducting business in the Georgetown/Horry County market and
elsewhere. Many of the Bank's competitors have equal or greater financial or
banking related resources than the Company and the Bank. According to
information provided by the FDIC as of June 30, 2001, the Georgetown/Horry


                                        3
<PAGE>
County area was served by 22 banking and savings institutions with 120 offices
in Georgetown and Horry Counties. These competitors offer the same or similar
products and services as the Bank. Currently, the three largest institutions in
terms of market share in Georgetown and Horry Counties are Carolina First Bank,
Coastal Federal Savings Bank and Conway National Bank.

LENDING  SERVICES

     LENDING POLICY. The Bank offers a full range of lending products, including
commercial, real estate and consumer loans to individuals and small- and
medium-sized businesses and professional concerns. As of December 31, 2001, the
Bank's loan portfolio was comprised of:

     LOAN  CLASSIFICATION               PERCENTAGE
     --------------------               ----------

     Commercial  loans                         65%
     Real  estate  loans                       19%
     Consumer  loans                           16%

     LOAN APPROVAL AND REVIEW. The Bank's loan approval policies provide for
various levels of officer lending authority. When the amount of total loans to a
single borrower exceeds that individual officer's lending authority, an officer
with a higher lending limit or the Bank's Loan Committee determines whether to
approve the loan request. The Bank does not make any loans to any of its
directors or executive officers unless the terms of the loan are no more
favorable than would be available to any other applicant. Additionally, the
board of directors must approve any loan to a director or executive officer that
is in an amount greater than the lesser of $25,000 or 5% of the Bank's capital.

     LENDING LIMITS. The Bank's lending activities are subject to a variety of
lending limits imposed by federal law. Differing limits apply in certain
circumstances based on the type of loan or the nature of the borrower, including
the borrower's relationship to the bank. In general, however, the Bank is able
to loan any one borrower a maximum amount equal to either:

      -     15%  of  the  Bank's  capital  and  surplus;  or

      -     25%  of  its  capital  and surplus if the amount that exceeds 15% is
            fully  secured  by  readily  marketable  collateral.

     The Bank sells loan participations to other financial institutions in order
to meet the lending needs of loan customers requiring extensions of credit above
these limits.

     CREDIT RISKS. The principal economic risk associated with each category of
loans that the Bank makes is the creditworthiness of the borrower. Borrower
creditworthiness is affected by general economic conditions and the strength of
the relevant business market segment. General economic factors affecting a
borrower's ability to repay include interest, inflation and employment rates, as
well as other factors affecting a borrower's customers, suppliers and employees.

     COMMERCIAL LOANS. The Bank's commercial lending is directed principally
toward small- to medium-sized businesses whose demand for funds falls within the
legal lending limits of the Bank. This category of loans includes loans made to
individual, partnership or corporate borrowers for a variety of business
purposes, including equipment loans, loans to support working capital and loans
secured by accounts receivable or inventories. The terms of these loans vary by
purpose and by type of underlying collateral, if any. The quality of the
commercial borrower's management and its ability both to properly evaluate


                                        4
<PAGE>
changes  in  the  supply  and  demand  characteristics affecting its markets for
products  and  services  and  to  respond  effectively  to  these  changes  are
significant  factors  in  a  commercial  borrower's  creditworthiness.

     REAL ESTATE LOANS. The Bank makes and holds real estate-related loans
including commercial real estate, construction and development, and residential
real estate loans. These loans may include certain commercial loans where the
Bank takes a security interest in real estate out of an abundance of caution and
not as the principal collateral for the loan, but excludes home equity loans,
which are classified as consumer loans. Risks associated with real estate loans
include fluctuations in the value of real estate, new job creation trends,
tenant vacancy rates and the quality of the borrower's management. The Bank
generally sells any long term mortgage that it originates on the secondary
market. The Bank limits the interest rate risk and credit risk on these loans by
locking in the interest rate for each loan with the secondary market investor
and receiving the investor's underwriting approval before originating the loan.

     CONSUMER LOANS. The Bank makes a variety of loans to individuals for
personal, family and household purposes, including secured and unsecured
installment and term loans, home equity loans and lines of credit. Consumer loan
repayments depend upon the borrower's financial stability and are more likely to
be adversely affected by divorce, job loss, illness and personal hardships.

     INVESTMENTS. In addition to loans, the Bank makes other investments
primarily in obligations of the United States or obligations guaranteed as to
principal and interest by the United States and other taxable securities. No
investment held by the Bank exceeds any applicable limitation imposed by law or
regulation. Our asset and liability management committee reviews the investment
portfolio on an ongoing basis to ascertain investment profitablity and to verify
compliance with the Bank's investment policies.

     DEPOSITS. The Bank's core deposits include checking accounts, money market
accounts, savings accounts and a variety of certificates of deposit and
individual retirement accounts. To attract deposits, the Bank has employed an
aggressive marketing plan in in its overall market area, and offers a broad
product line and rates and services competitive with those offered in the
Georgetown/Horry County market. The Bank's primary sources of deposits are
residents of, and businesses and their employees located in, the Waccaman Neck
communities. The Bank has obtained its deposits primarily through personal
solicitation by its officers and directors, direct mail solicitations, and
advertisements published in the local media.

     ASSET AND LIABILITY MANAGEMENT. The Bank has established an asset and
liability management committee to manage its assets and liabilities. The goal of
this committee is to maintain an optimum and stable net interest margin, a
profitable after-tax return on assets and return on equity and adequate
liquidity. The committee conducts these management functions within the
framework of written loan and investment policies that the Bank has adopted. The
committee also attempts to maintain a balanced position between rate sensitive
assets and rate sensitive liabilities. The committee charts the Bank's assets
and liabilities on a matrix by maturity, effective duration and interest
adjustment period and attempts to manage any gaps in maturity ranges.

                                    EMPLOYEES

     At  December  31,  2001  the  Bank employed 18 full-time employees, and the
Company  had  no employees who were not also employees of the Bank.  The Company
considers  the  Bank's  relationship  with  its  employees  to  be  excellent.


                                        5
<PAGE>
                           SUPERVISION AND REGULATION

     Both the Company and the Bank are subject to extensive state and federal
banking regulations that impose restrictions on and provide for general
regulatory oversight of their operations. These laws are generally intended to
protect depositors and not shareholders. The following discussion describes the
material elements of the regulatory framework that applies to us.

SUN  BANCSHARES

     Since the Company owns all of the capital stock of the Bank, it is a bank
holding company under the federal Bank Holding Company Act of 1956 and the South
Carolina Banking and Branching Efficiency Act. As a result, the Company is
primarily subject to the supervision, examination, and reporting requirements of
the Bank Holding Company Act and the regulations of the Federal Reserve.

     ACQUISITIONS OF BANKS. The Bank Holding Company Act requires every bank
holding company to obtain the Federal Reserve's prior approval before:

      -     Acquiring  direct  or  indirect  ownership  or control of any voting
            shares  of  any  bank  if,  after  the acquisition, the bank holding
            company  will  directly or indirectly own or control more than 5% of
            the  bank's  voting  shares;

      -     Acquiring  all  or  substantially  all of the assets of any bank; or

      -     Merging  or  consolidating  with  any  other  bank  holding company.

     Additionally, the Bank Holding Company Act provides that the Federal
Reserve may not approve any of these transactions if it would result in or tend
to create a monopoly or, substantially lessen competition or otherwise function
as a restraint of trade, unless the anticompetitive effects of the proposed
transaction are clearly outweighed by the public interest in meeting the
convenience and needs of the community to be served. The Federal Reserve is also
required to consider the financial and managerial resources and future prospects
of the bank holding companies and banks concerned and the convenience and needs
of the community to be served. The Federal Reserve's consideration of financial
resources generally focuses on capital adequacy, which is discussed below.

     Under the Bank Holding Company Act, if adequately capitalized and
adequately managed, the Company or any other bank holding company located in
South Carolina may purchase a bank located outside of South Carolina.
Conversely, an adequately capitalized and adequately managed bank holding
company located outside of South Carolina may purchase a bank located inside
South Carolina. In each case, however, restrictions may be placed on the
acquisition of a bank that has only been in existence for a limited amount of
time or will result in specified concentrations of deposits. For example, South
Carolina law prohibits a bank holding company from acquiring control of a
financial institution until the target financial institution has been in
existence and has had continuous operations for five years. As a result, no bank
holding company may acquire control of the Company until after November 15,
2005.

     CHANGE IN BANK CONTROL. Subject to various exceptions, the Bank Holding
Company Act and the Change in Bank Control Act, together with related
regulations, require Federal Reserve approval prior to any person or company
acquiring "control" of a bank holding company. Control is conclusively presumed
to exist if an individual or company acquires 25% or more of any class of voting
securities of the bank holding company. Control is rebuttably presumed to exist
if a person or company acquires 10% or more, but less than 25%, of any class of
voting securities and either:


                                        6
<PAGE>
      -     The  bank holding company has registered securities under Section 12
            of  the  Securities  Act  of  1934;  or

      -     No  other  person  owns a greater percentage of that class of voting
            securities  immediately  after  the  transaction.

Our common stock is not registered under the Securities Exchange Act of 1934.
The regulations provide a procedure for challenge of the rebuttable control
presumption.

     PERMITTED ACTIVITIES. Bank holding companies are generally prohibited under
the Bank Holding Company Act, from engaging in or acquiring direct or indirect
control of more than 5% of the voting shares of any company engaged in any
activity other than:

      -     Banking  or  managing  or  controlling  banks;  and

      -     An  activity  that  the  Federal Reserve determines to be so closely
            related  to  banking  as  to be a proper incident to the business of
            banking.

     Activities that the Federal Reserve has found to be so closely related to
banking as to be a proper incident to the business of banking include:

      -     Factoring  accounts  receivable;

      -     Making,  acquiring,  brokering  or servicing loans and usual related
            activities;

      -     Leasing  personal  or  real  property;

      -     Operating  a  non-bank  depository  institution,  such  as a savings
            association;

      -     Trust  company  functions;

      -     Financial  and  investment  advisory  activities;

      -     Conducting  discount  securities  brokerage  activities;

      -     Underwriting  and dealing in government obligations and money market
            instruments;

      -     Providing specified management consulting and counseling activities;

      -     Performing  selected  data processing services and support services;

      -     Acting as agent or broker in selling credit life insurance and other
            types  of  insurance  in  connection  with  credit transactions; and

      -     Performing  selected  insurance  underwriting  activities.

     Despite prior approval, the Federal Reserve may order a bank holding
company or its subsidiaries to terminate any of these activities or to terminate
its ownership or control of any subsidiary when it has reasonable cause to
believe that the bank holding company's continued ownership, activity or control
constitutes a serious risk to the financial safety, soundness, or stability of
it or any of its bank subsidiaries.


                                        7
<PAGE>
     Generally, if the Company qualifies and elects to become a financial
holding company, it may engage in activities that are financial in nature or
incidental or complementary to financial activity. The Bank Holding Company Act
expressly lists the following activities as financial in nature:

     -    Lending,  trust  and  other  banking  activities;

     -    Insuring,  guaranteeing,  or  indemnifying  against  loss  or harm, or
          providing  and  issuing  annuities, and acting as principal, agent, or
          broker  for  these  purposes,  in  any  state;

     -    Providing  financial,  investment,  or  advisory  services;

     -    Issuing  or  selling  instruments  representing  interests in pools of
          assets  permissible  for  a  bank  to  hold  directly;

     -    Underwriting,  dealing  in  or  making  a  market  in  securities;

     -    Other  activities  that  the  Federal  Reserve  may determine to be so
          closely related to banking or managing or controlling banks as to be a
          proper  incident  to  managing  or  controlling  banks;

     -    Foreign  activities  permitted  outside  of  the  United States if the
          Federal  Reserve  has  determined  them to be usual in connection with
          banking  operations  abroad;

     -    Merchant  banking  through  securities  or  insurance  affiliates; and

     -    Insurance  company  portfolio  investments.

     To qualify to become a financial holding company, the Bank and any other
depository institution subsidiary of the Company must be well capitalized and
well managed and must have a Community Reinvestment Act rating of at least
satisfactory. Additionally, the Company must file an election with the Federal
Reserve to become a financial holding company and must provide the Federal
Reserve with 30 days written notice prior to engaging in a permitted financial
activity. Although we are eligible to elect to become a financial holding
company, we currently have no plans to make such an election.

     SUPPORT OF SUBSIDIARY INSTITUTIONS. Under Federal Reserve policy, the
Company is expected to act as a source of financial strength for the Bank and to
commit resources to support the Bank. This support may be required at times
when, without this Federal Reserve policy, the Company might not be inclined to
provide it. In addition, any capital loans made by the Company to the Bank will
be repaid only after its deposits and various other obligations are repaid in
full. In the unlikely event of the Company's bankruptcy, any commitment by it to
a federal bank regulatory agency to maintain the capital of the Bank will be
assumed by the bankruptcy trustee and entitled to a priority of payment.

     SOUTH CAROLINA STATE REGULATION. As a bank holding company registered under
the South Carolina Banking and Branching Efficiency Act, the Company is subject
to limitations on sale or merger and to regulation by the South Carolina Board
of Financial Institutions. Prior to acquiring the capital stock of a national
bank, we are not required to obtain the approval of the Board, but we must
notify them at least 15 days prior to doing so. Prior to engaging in the
acquisition of nonbanking institutions or state chartered banks, we must receive
the Board's approval, and we must file periodic reports with respect to our
financial condition and operations, management and intercompany relationships
between Sun Bancshares and its subsidiaries.


                                        8
<PAGE>
SUNBANK

     Since the Bank is chartered as a national bank, it is primarily subject to
the supervision, examination and reporting requirements of the National Bank Act
and the regulations of the Office of the Comptroller of the Currency. The Office
of the Comptroller of the Currency regularly examines the Bank's operations and
has the authority to approve or disapprove mergers, the establishment of
branches and similar corporate actions. The Office of the Comptroller of the
Currency also has the power to prevent the continuance or development of unsafe
or unsound banking practices or other violations of law. Additionally, the
Bank's deposits are insured by the FDIC to the maximum extent provided by law.
The Bank is also subject to numerous state and federal statutes and regulations
that affect its business, activities and operations.

     BRANCHING. National banks are required by the National Bank Act to adhere
to branching laws applicable to state banks in the states in which they are
located. Under current South Carolina law, the Bank may open branch offices
throughout South Carolina with the prior approval of the Office of the
Comptroller of the Currency. In addition, with prior regulatory approval, the
Bank may acquire branches of existing banks located in South Carolina. The Bank
and any other national or state-chartered bank generally may branch across state
lines by merging with banks in other states if allowed by the applicable states'
laws. South Carolina law, with limited exceptions, currently permits branching
across state lines through interstate mergers.

     Under the Federal Deposit Insurance Act, states may "opt-in" and allow
out-of-state banks to branch into their state by establishing a new start-up
branch in the state. Currently, South Carolina has not opted-in to this
provision. Therefore, interstate merger is the only method through which a bank
located outside of South Carolina may branch into South Carolina. This provides
a limited barrier of entry into the South Carolina banking market, which
protects us from an important segment of potential competition. However, because
South Carolina has elected not to opt-in, our ability to establish a new
start-up branch in another state may be limited. Many states that have elected
to opt-in have done so on a reciprocal basis, meaning that an out-of-state bank
may establish a new start-up branch only if their home state has also elected to
opt-in.

     PROMPT CORRECTIVE ACTION. The Federal Deposit Insurance Corporation
Improvement Act of 1991 establishes a system of prompt corrective action to
resolve the problems of undercapitalized financial institutions. Under this
system, the federal banking regulators have established five capital categories
(well capitalized, adequately capitalized, undercapitalized, significantly
undercapitalized and critically undercapitalized) in which all institutions are
placed. Federal banking regulators are required to take various mandatory
supervisory actions and are authorized to take other discretionary actions with
respect to institutions in the three undercapitalized categories. The severity
of the action depends upon the capital category in which the institution is
placed. Generally, subject to a narrow exception, the banking regulator must
appoint a receiver or conservator for an institution that is critically
undercapitalized. The federal banking agencies have specified by regulation the
relevant capital level for each category.

     An institution that is categorized as undercapitalized, significantly
undercapitalized, or critically undercapitalized is required to submit an
acceptable capital restoration plan to its appropriate federal banking agency. A
bank holding company must guarantee that a subsidiary depository institution
meets its capital restoration plan, subject to various limitations. The
controlling holding company's obligation to fund a capital restoration plan is
limited to the lesser of 5% of an undercapitalized subsidiary's assets at the
time it became undercapitalized or the amount required to meet regulatory
capital requirements. An undercapitalized institution is also generally
prohibited from increasing its average total assets, making acquisitions,


                                        9
<PAGE>
establishing any branches or engaging in any new line of business, except under
an accepted capital restoration plan or with FDIC approval. The regulations also
establish procedures for downgrading an institution to a lower capital category
based on supervisory factors other than capital.

     FDIC INSURANCE ASSESSMENTS. The FDIC has adopted a risk-based assessment
system for insured depository institutions that takes into account the risks
attributable to difference categories and concentrations of assets and
liabilities. The system assigns an institution to one of three capital
categories: (1) well capitalized; (2) adequately capitalized; and (3)
undercapitalized. These three categories are substantially similar to the prompt
corrective action categories described above, with the "undercapitalized"
category including institutions that are undercapitalized, significantly
undercapitalized, and critically undercapitalized for prompt corrective action
purposes. The FDIC also assigns an institution to one of three supervisory
subgroups based on a supervisory evaluation that the institution's primary
federal regulator provides to the FDIC and information that the FDIC determines
to be relevant to the institution's financial condition and the risk posed to
the deposit insurance funds. Assessments range from 0 to 27 cents per $100 of
deposits, depending on the institution's capital group and supervisory subgroup.
In addition, the FDIC imposes assessments to help pay off the $780 million in
annual interest payments on the $8 billion Financing Corporation bonds issued in
the late 1980s as part of the government rescue of the thrift industry. This
assessment rate is adjusted quarterly and is set at 1.82 cents per $100 of
deposits for the first quarter of 2002.

     The FDIC may terminate its insurance of deposits if it finds that the
institution has engaged in unsafe and unsound practices, is in an unsafe or
unsound condition to continue operations, or has violated any applicable law,
regulation, rule, order, or condition imposed by the FDIC.

     COMMUNITY REINVESTMENT ACT. The Community Reinvestment Act requires that,
in connection with examinations of financial institutions within their
respective jurisdictions, the Federal Reserve, the FDIC, or the Office of the
Comptroller of the Currency, shall evaluate the record of each financial
institution in meeting the credit needs of its local community, including low
and moderate-income neighborhoods. These facts are also considered in evaluating
mergers, acquisitions, and applications to open a branch or facility. Failure to
adequately meet these criteria could impose additional requirements and
limitations on the Bank. Since our aggregate assets are not more than $250
million, under the Gramm-Leach-Bliley Act, we are subject to a Community
Reinvestment Act examination only once every 60 months if we receive an
outstanding rating, once every 48 months if we receive a satisfactory rating and
as needed if our rating is less than satisfactory. Additionally, we must
publicly disclose the terms of various Community Reinvestment Act-related
agreements.

     OTHER REGULATIONS. Interest and other charges collected or contracted for
by the Bank are subject to state usury laws and federal laws concerning interest
rates. For example, under the Soldiers' and Sailors' Civil Relief Act of 1940, a
lender is generally prohibited from charging an annual interest rate in excess
of 6% on any obligation for which the borrower is a person on active duty with
the United States military. The Bank's loan operations are also subject to
federal laws applicable to credit transactions, such as:

     -    The federal Truth-In-Lending Act, governing disclosures of credit
          terms to consumer borrowers;

     -    The Home Mortgage Disclosure Act of 1975, requiring financial
          institutions to provide information to enable the public and public
          officials to determine whether a financial institution is fulfilling
          its obligation to help meet the housing needs of the community it
          serves;


                                       10
<PAGE>
     -    The Equal Credit Opportunity Act, prohibiting discrimination on the
          basis of race, creed or other prohibited factors in extending credit;

     -    The Fair Credit Reporting Act of 1978, governing the use and provision
          of information to credit reporting agencies;

     -    The Fair Debt Collection Act, governing the manner in which consumer
          debts may be collected by collection agencies;

     -    Soldiers' and Sailors' Civil Relief Act of 1940, governing the
          repayment terms of, and property rights underlying, secured
          obligations of persons in military service; and

     -    The rules and regulations of the various federal agencies charged with
          the responsibility of implementing these federal laws.

The  deposit  operations  of  the  Bank  are  subject  to:

     -    The Right to Financial Privacy Act, which imposes a duty to maintain
          confidentiality of consumer financial records and prescribes
          procedures for complying with administrative subpoenas of financial
          records; and

     -    The Electronic Funds Transfer Act and Regulation E issued by the
          Federal Reserve to implement that act, which govern automatic deposits
          to and withdrawals from deposit accounts and customers' rights and
          liabilities arising from the use of automated teller machines and
          other electronic banking services.

CAPITAL  ADEQUACY

     The Company and the Bank are required to comply with the capital adequacy
standards established by the Federal Reserve, in the case of the Company, and
the Office of the Comptroller of the Currency, in the case of the Bank. The
Federal Reserve has established a risk-based and a leverage measure of capital
adequacy for bank holding companies. Since the Company's consolidated total
assets are less than $150 million, under the Federal Reserve's capital
guidelines, its capital adequacy is measured on a bank-only basis, as opposed to
a consolidated basis. The Bank is also subject to risk-based and leverage
capital requirements adopted by the Office of the Comptroller of the Currency,
which are substantially similar to those adopted by the Federal Reserve for bank
holding companies.

     The risk-based capital standards are designed to make regulatory capital
requirements more sensitive to differences in risk profiles among banks and bank
holding companies, to account for off-balance-sheet exposure, and to minimize
disincentives for holding liquid assets. Assets and off-balance-sheet items,
such as letters of credit and unfunded loan commitments, are assigned to broad
risk categories, each with appropriate risk weights. The resulting capital
ratios represent capital as a percentage of total risk-weighted assets and
off-balance-sheet items.

     The minimum guideline for the ratio of total capital to risk-weighted
assets is 8%. Total capital consists of two components, Tier 1 Capital and Tier
2 Capital. Tier 1 Capital generally consists of common stock, minority interests
in the equity accounts of consolidated subsidiaries, noncumulative perpetual
preferred stock, and a limited amount of qualifying cumulative perpetual
preferred stock, less goodwill and other specified intangible assets. Tier 1
Capital must equal at least 4% of risk-weighted assets. Tier 2 Capital generally
consists of subordinated debt, other preferred stock, and a limited


                                       11
<PAGE>
amount of loan loss reserves. The total amount of Tier 2 Capital is limited to
100% of Tier 1 Capital. At December 31, 2001 our ratio of total capital to
risk-weighted assets was 31.58% and our ratio of Tier 1 Capital to risk-weighted
assets was 30.65%.

     In addition, the Federal Reserve has established minimum leverage ratio
guidelines for bank holding companies. These guidelines provide for a minimum
ratio of Tier 1 Capital to average assets, less goodwill and other specified
intangible assets, of 3% for bank holding companies that meet specified
criteria, including having the highest regulatory rating and implementing the
Federal Reserve's risk-based capital measure for market risk. All other bank
holding companies generally are required to maintain a leverage ratio of at
least 4%. At December 31, 2001, our leverage ratio was 22.29%. The guidelines
also provide that bank holding companies experiencing internal growth or making
acquisitions will be expected to maintain strong capital positions substantially
above the minimum supervisory levels without reliance on intangible assets. The
Federal Reserve considers the leverage ratio and other indicators of capital
strength in evaluating proposals for expansion or new activities.

     Failure to meet capital guidelines could subject a bank or bank holding
company to a variety of enforcement remedies, including issuance of a capital
directive, the termination of deposit insurance by the FDIC, a prohibition on
accepting brokered deposits, and certain other restrictions on its business. As
described above, significant additional restrictions can be imposed on
FDIC-insured depository institutions that fail to meet applicable capital
requirements. See "-Prompt Corrective Action."

PAYMENT  OF  DIVIDENDS

     The Company is a legal entity separate and distinct from the Bank. The
principal sources of the Company's cash flow, including cash flow to pay
dividends to its shareholders, are dividends that the Bank pays to its sole
shareholder, the Company. Statutory and regulatory limitations apply to the
Bank's payment of dividends to the Company as well as to the Company's payment
of dividends to its shareholders.

     The Bank is required by federal law to obtain prior approval of the Office
of the Comptroller of the Currency for payments of dividends if the total of all
dividends declared by our board of directors in any year will exceed (1) the
total of the Bank's net profits for that year, plus (2) the Bank's retained net
profits of the preceding two years, less any required transfers to surplus.

     The payment of dividends by the Company and the Bank may also be affected
by other factors, such as the requirement to maintain adequate capital above
regulatory guidelines. If, in the opinion of the Office of the Comptroller of
the Currency, the Bank were engaged in or about to engage in an unsafe or
unsound practice, the Office of the Comptroller of the Currency could require,
after notice and a hearing, that the Bank stop or refrain engaging in the
practice. The federal banking agencies have indicated that paying dividends that
deplete a depository institution's capital base to an inadequate level would be
an unsafe and unsound banking practice. Under the Federal Deposit Insurance
Corporation Improvement Act of 1991, a depository institution may not pay any
dividend if payment would cause it to become undercapitalized or if it already
is undercapitalized. Moreover, the federal agencies have issued policy
statements that provide that bank holding companies and insured banks should
generally only pay dividends out of current operating earnings. See "-Prompt
Corrective Action."

RESTRICTIONS  ON  TRANSACTIONS  WITH  AFFILIATES

     The Company and the Bank are subject to the provisions of Section 23A of
the Federal Reserve Act. Section 23A places limits on the amount of:


                                       12
<PAGE>
     -    A  bank's  loans  or  extensions  of  credit  to  affiliates;

     -    A  bank's  investment  in  affiliates;

     -    Assets  a  bank  may  purchase  from  affiliates,  except for real and
          personal  property  exempted  by  the  Federal  Reserve;

     -    Loans  or  extensions of credit to third parties collateralized by the
          securities  or  obligations  of  affiliates;  and

     -    A bank's guarantee, acceptance or letter of credit issued on behalf of
          an  affiliate.

     The total amount of the above transactions is limited in amount, as to any
one affiliate, to 10% of a bank's capital and surplus and, as to all affiliates
combined, to 20% of a bank's capital and surplus. In addition to the limitation
on the amount of these transactions, each of the above transactions must also
meet specified collateral requirements. The Bank must also comply with other
provisions designed to avoid the taking of low-quality assets.

     The Company and the Bank are also subject to the provisions of Section 23B
of the Federal Reserve Act which, among other things, prohibit an institution
from engaging in the above transactions with affiliates unless the transactions
are on terms substantially the same, or at least as favorable to the institution
or its subsidiaries, as those prevailing at the time for comparable transactions
with nonaffiliated companies.

     The Bank is also subject to restrictions on extensions of credit to its
executive officers, directors, principal shareholders and their related
interests. These extensions of credit (1) must be made on substantially the same
terms, including interest rates and collateral, as those prevailing at the time
for comparable transactions with third parties, and (2) must not involve more
than the normal risk of repayment or present other unfavorable features.

PRIVACY

     Financial institutions are required to disclose their policies for
collecting and protecting confidential information. Customers generally may
prevent financial institutions from sharing nonpublic personal financial
information with nonaffiliated third parties except under narrow circumstances,
such as the processing of transactions requested by the consumer or when the
financial institution is jointly sponsoring a product or service with a
nonaffiliated third party. Additionally, financial institutions generally may
not disclose consumer account numbers to any nonaffiliated third party for use
in telemarketing, direct mail marketing or other marketing to consumers.

ANTI-TERRORISM  LEGISLATION

     In the wake of the tragic events of September 11th, on October 26, 2001,
the President signed the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT) Act
of 2001. Under the USA PATRIOT Act, financial institutions are subject to
prohibitions against specified financial transactions and account relationships
as well as enhanced due diligence and "know your customer" standards in their
dealings with foreign financial institutions and foreign customers. For example,
the enhanced due diligence policies, procedures, and controls generally require
financial institutions to take reasonable steps-


                                       13
<PAGE>
     -    to conduct enhanced scrutiny of account relationships to guard against
          money laundering and report any suspicious transaction;

     -    to ascertain the identity of the nominal and beneficial owners of, and
          the source of funds deposited into, each account as needed to guard
          against money laundering and report any suspicious transactions;

     -    to ascertain for any foreign bank, the shares of which are not
          publicly traded, the identity of the owners of the foreign bank, and
          the nature and extent of the ownership interest of each such owner;
          and

     -    to ascertain whether any foreign bank provides correspondent accounts
          to other foreign banks and, if so, the identity of those foreign banks
          and related due diligence information.

     Under the USA PATRIOT Act, financial institutions have 180 days from
enactment (or until April 25, 2002) to establish anti-money laundering programs.
The USA PATRIOT Act sets forth minimum standards for these programs, including:

     -    the development of internal policies, procedures, and controls;

     -    the designation of a compliance officer;

     -    an ongoing employee training program; and

     -    an independent audit function to test the programs.

Before the 180-day grace period expires, the Secretary of the Treasury will
prescribe regulations that consider the extent to which these new requirements
are commensurate with the size, location, and activities of financial
institutions subject to the Act.

     In addition, the USA PATRIOT Act authorizes the Secretary of the Treasury
to adopt rules increasing the cooperation and information sharing between
financial institutions, regulators, and law enforcement authorities regarding
individuals, entities and organizations engaged in, or reasonably suspected
based on credible evidence of engaging in, terrorist acts or money laundering
activities. Any financial institution complying with these rules will not be
deemed to have violated the privacy provisions of the Gramm-Leach-Bliley Act, as
discussed above.

PROPOSED  LEGISLATION  AND  REGULATORY  ACTION

     New regulations and statutes are regularly proposed that contain
wide-ranging proposals for altering the structures, regulations and competitive
relationships of the nation's financial institutions. We cannot predict whether
or in what form any proposed regulation or statute will be adopted or the extent
to which our business may be affected by any new regulation or statute.

EFFECT  OF  GOVERNMENTAL  MONETARY  POLICES

     Our earnings are affected by domestic economic conditions and the monetary
and fiscal policies of the United States government and its agencies. The
Federal Reserve Bank's monetary policies have had, and are likely to continue to
have, an important impact on the operating results of commercial banks through
its power to implement national monetary policy in order, among other things, to
curb inflation or combat a recession. The monetary policies of the Federal
Reserve affect the levels of bank loans, investments and deposits through its


                                       14
<PAGE>
control over the issuance of United States government securities, its regulation
of the discount rate applicable to member banks and its influence over reserve
requirements to which member banks are subject. We cannot predict the nature or
impact of future changes in monetary and fiscal policies.

                        SELECTED STATISTICAL INFORMATION

     The response to this Item is included in the Company's Annual Report to
Shareholders under the heading, "Management's Discussion and Analysis of
Financial Condition and Results of Operations," at pages 4 through 16, and is
incorporated herein by reference.


ITEM  2.     DESCRIPTION  OF  PROPERTIES

     MAIN OFFICE. The Bank's main office will be located at 4210 Highway 17
Bypass in Murrells Inlet, South Carolina in Georgetown County. The Company is
leasing approximately 1.9 acres of land at this site at a monthly lease rate of
$7,755. The land lease began on May 1, 2000 is for an initial term of 25 years
with renewal options for a total of 15 additional years. All necessary permits
are in place for us to began construction of our permanent main office facility
at this site in April 2002. Completion of the main office facility is
anticipated in the fourth quarter of 2002. Our permanent main office will be a
two-story, traditional style building, consisting of approximately 10,000 square
feet, four drive-up lanes and one ATM. We anticipate that this space will be
sufficient to support our initial operations and some expansion of our
operations.

     We began our banking business in November 2000 in a temporary main office
facility. We purchased a temporary modular facility to be used as our main
office until our permanent main office is completed. The purchase price of the
modular facility was approximately $90,000, and it is located one-tenth of a
mile from the site for the permanent main office.

     BRANCH OFFICE. In July 2001, we opened a branch office located at 1134
North Fraser Street in Georgetown, South Carolina. We are leasing approximately
1.1 acres of land at this site at a current yearly rental rate of $55,000. The
yearly rental rate is subject to adjustment beginning in 2003 and every three
years thereafter based on changes in the consumer price index. The land lease
began on May 1, 2000 and is for an initial term of 30 years with renewal options
for a total of 20 additional years. The branch office is a one story,
traditional style building, consisting of approximately 4,400 square feet, three
drive-up windows and one ATM.

     Other than normal real estate lending activities of the Bank, the Company
does not invest in real estate, interests in real estate, real estate mortgages,
or securities of or interests in persons primarily engaged in real estate
activities.

ITEM  3.     LEGAL  PROCEEDINGS

     There are no material pending legal proceedings to which the Company is a
party or of which any of its properties are subject, nor are there material
proceedings known to the Company to be contemplated by any governmental
authority. Additionally, the Company is unaware of any material proceedings,
pending or contemplated, in which any director, officer or affiliate, or any
principal security holder of the Company or any associate of any of the
foregoing, is a party or has an interest adverse to the Company.


                                       15
<PAGE>
ITEM  4.     SUBMISSION  OF  MATTERS  TO  A  VOTE  OF  SECURITY  HOLDERS

     None.


                                     PART II

ITEM  5.     MARKET  FOR  REGISTRANT'S  COMMON  EQUITY  AND
             RELATED  STOCKHOLDER  MATTERS

     The Company's common stock is traded on the OTC Bulletin Board under the
symbol "SNBA." The common stock was first listed on the OTC Bulletin Board on
November 1, 2000. The following table sets forth the high and low bid prices for
the Company's common stock for each quarter within the last two fiscal years
during which the stock was traded. These quotations reflect inter-dealer prices,
without retail mark-up, mark-down, or commission, and may not represent actual
transactions.

<TABLE>
<CAPTION>
                        High             Low
                     Bid Prices       Bid Prices
                     ----------       ----------
<S>                  <C>              <C>
     2000
     ----

Fourth Quarter            11.00            10.00

     2001
     ----

First Quarter              9.00             9.00
Second Quarter             8.00             6.60
Third Quarter              8.00             7.00
Fourth Quarter             8.00             7.00
</TABLE>

     As  of  December  31,  2001, the Company had 460 shareholders of record who
owned  an  aggregate of 715,000 shares. The Company has not paid or declared any
cash  dividends  on  its  common  stock  during  the  last  two  fiscal  years.


ITEM  6.     MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF FINANCIAL CONDITION AND
             RESULTS  OF  OPERATIONS

     The response to this Item is included in the Company's Annual Report to
Shareholders under the heading, "Management's Discussion and Analysis of
Financial Condition and Results of Operations," at pages 4 through 16, and is
incorporated herein by reference.


ITEM  7.     FINANCIAL  STATEMENTS

     The following financial statements are included in the Company's Annual
Report to Shareholders at pages 17 through 36, and are incorporated herein by
reference.

     Report of Independent Certified Public Accountants

     Financial  Statements


                                       16
<PAGE>
     Consolidated Balance Sheets as of December 31, 2001 and 2000

     Consolidated Statements of Income for the years ended December 31, 2001 and
     2000

     Consolidated Statements of Changes in Stockholders' Equity for the years
     ended December 31, 2001 and 2000

     Consolidated Statements of Cash Flows for the years ended December 31, 2001
     and 2000

     Notes to Consolidated Financial Statements


ITEM  8.     CHANGES  IN  AND  DISAGREEMENTS  WITH ACCOUNTANTS ON ACCOUNTING AND
             FINANCIAL  DISCLOSURE

     None.


                                    PART III

ITEM  9.     DIRECTORS,  EXECUTIVE  OFFICERS,  PROMOTERS  AND  CONTROL  PERSONS;
             COMPLIANCE  WITH  SECTION  16(A)  OF  THE  EXCHANGE  ACT

     The  following  table sets forth for each director and executive officer of
the  Company (1) the person's name, (2) his or her age at December 31, 2001, (3)
the  year  he or she was first elected as a director of the Company, and (4) his
or  her positions with the Company other than as a director and his or her other
business  experience  for  the  past  five  years.


                                       17
<PAGE>
<TABLE>
<CAPTION>
                                 DIRECTOR  POSITION WITH THE COMPANY
NAME (AGE)                        SINCE     AND BUSINESS EXPERIENCE
-------------------------------  --------  -------------------------------------------------------------
<S>                              <C>       <C>
CLASS II DIRECTORS:
(Term Expiring 2005*)

David E. Grabeman (48)               1999  Dentist and sole owner, David E. Grabeman, DDS

Richard Edwin Heath (54)             1999  Certified Public Accountant and Certified Valuation Analyst
                                           and sole owner, Richard E. Heath, CPA

Paul John Hletko (55)                1999  Pediatrician and sole owner, Georgetown Pediatric Center,
                                           PA

Judy B. Long (50)                    1999  Sole or part owner of several retail, restaurant and printing
                                           businesses, including Four Seasons Screen Printing, Sports
                                           Spectacular, Inc., Super Sports Spectacular, Carol, Inc, and
                                           Fins, Inc.

Thomas O. Morris, Jr. (52)           1999  Pharmacist, owner of Hemingway Pharmacy, Inc.; owner of
                                           Home Medical Care, which provides durable home medical
                                           equipment

CLASS I DIRECTORS:
(Term Expiring 2004)

Thomas Bouchette (43)                1999  President of the Company and President and Chief
                                           Executive Officer of the Bank

Edsel J. ("Coupe") DeVille (63)      1999  Director of Community Development, Commercial Landtec,
                                           Corp., a commercial real estate firm

John S. Divine, III (64)             1999  Co-owner, Divine Holdings, LLC, which invests in rental
                                           properties, secured mortgages and stocks and co-owner,
                                           Divine Restaurants, Inc., which owns and operates 15
                                           Restaurants

Dalton B. Floyd, Jr. (63)            1999  Attorney and sole owner, The Floyd Law Firm PC;
                                           Chairman of the Board and Chief Executive Officer of the
                                           Company

Jeanne Louise Fourrier-Eggart        1999  Periodontist and sole owner, Jeanne L. Fourrier, DDS,
(48)                                       MHS, PA


                                       18
<PAGE>
                                 DIRECTOR                    POSITION WITH THE COMPANY
NAME (AGE)                        SINCE                       AND BUSINESS EXPERIENCE
-------------------------------  --------  -------------------------------------------------------------
CLASS III DIRECTORS:
(Term Expiring 2003)

Georgie B. Martin (59)               2000  Sole owner, Garden City Pavilion; President and sole owner,
                                           Independent Coin, Inc.; President and co-owner, Martin
                                           Coin Machine, Inc.

Joel A. Pellicci (58)                1999  President and sole owner, Jo-Lin Enterprises, a McDonald's
                                           franchisee

Donald E. Perry (61)                 1999  President and co-owner, Lakewood Camping Resort, which
                                           provides campground facilities

Chandler C. Prosser (34)             1999  President and sole owner of various real estate development
                                           and management companies including Prosser Realty
                                           Company, Inc.; co-owner, Grove Development, LLC; and
                                           Managing Partner, Wachesaw Golf, LLC

Larry N. Prosser (55)                1999  President and sole owner, Glenn's Bay, Inc., a real estate
                                           development company; owner of various other real estate
                                           development and construction companies
<FN>
---------------------------
*  Each Class II director is standing for re-election at the 2002 annual meeting of shareholders and, if
elected,  will  serve  a  three-year  term  expiring  in  2005.
</TABLE>

     The Company is filing this Annual Report on Form 10-KSB pursuant to Section
15(d)  of the Securities and Exchange Act and is not subject to filings required
by  Section  16  of  the  Securities  and  Exchange  Act.


ITEM  10.     EXECUTIVE  COMPENSATION

COMPENSATION  OF  EXECUTIVE  OFFICERS

     SUMMARY  COMPENSATION  TABLE.  The  following  table  presents  the  total
compensation  of the Company paid during fiscal years 2001, 2000 and 1999 (since
the  Company's  inception  in  August  1999)  to its chief executive officer and
president.  No  executive  officer of the Company earned over $100,000 in salary
and  bonus  during  fiscal  years  2001,  2000  and  1999.


                                       19
<PAGE>
<TABLE>
<CAPTION>
                                  Annual  Compensation               Long-Term  Compensation
                         -------------------------------------  ---------------------------------
                                                     Other
                                                    Annual          Number of         All Other
                               Salary    Bonus   Compensation       Securities      Compensation
Name and Position        Year    ($)      ($)         ($)       Underlying Options       ($)
-------------------------------------------------------------------------------------------------
<S>                      <C>   <C>      <C>      <C>            <C>                 <C>
Dalton B. Floyd, Jr.,    2001        0        0              0                   0              0
Chief Executive Officer  2000        0        0              0                   0              0
                         1999        0        0              0                   0              0

Thomas Bouchette,        2001   96,000        0              0                   0            368
 President               2000   85,500   10,000              0              35,750            320
___________________      1999   49,000        0              0                   0            160

</TABLE>
(1)  We  have omitted information on "perks" and other personal benefits because
     the  aggregate  value  of  these  items  does  not  meet the minimum amount
     required  for  disclosure  under  the  Securities and Exchange Commission's
     regulations.
(2)  Includes  premiums  paid  on a life insurance policy for the benefit of Mr.
     Bouchette.

     EMPLOYMENT AGREEMENT. Effective January 1, 2000, we entered into an
employment agreement with Thomas Bouchette, regarding his service as president
of the Company and president and chief executive officer of the Bank. Under the
terms of the agreement, Mr. Bouchette received a base salary of $7,000 per month
from June 1999 until the opening of the Bank in November 2000, at which time his
salary was increased to $8,000 per month. Pursuant to the agreement, Mr.
Bouchette also received a cash bonus of $10,000 upon the opening of the Bank,
and upon the close of the Company's initial stock offering Mr. Bouchette receive
an incentive stock option to purchase 35,750 shares of the Company's common
stock at an exercise price of $10.00 per share. The option vests in one-fifth
annual increments and has a maximum term of ten years.

     Additionally, under the agreement, Mr. Bouchette is entitled to receive an
annual incentive bonus equal to 5% of the Company consolidated pre-tax earnings
up to the amount of Mr. Bouchette's base salary, provided the Bank meets
specified performance criteria. The agreement also generally requires the
Company to provide other customary benefits to Mr. Bouchette such as health and
life insurance, an automobile allowance and membership to business and social
organizations.

     The initial term of the employment agreement is three years. At the end of
the initial three-year term and at the end of any extension of the initial term,
the agreement will be automatically extended for a term of 12 months unless Mr.
Bouchette, the Company or the Bank notifies the other parties that he or it does
not intend to extend the agreement. Mr. Bouchette will be entitled to severance
compensation of an amount up to six months of his base salary if, during the
term of the agreement, his employment is terminated for any of the following
reasons:

     -    The  Company or the Bank terminates Mr. Bouchette's employment without
          cause;

     -    Mr.  Bouchette  becomes  disabled;  or

     -    Mr.  Bouchette  terminates  his  employment  with  cause.

     Additionally, upon a change of control of the Company, Mr. Bouchette will
be entitled to severance compensation in an amount equal to 12 months of his
base salary if he terminates his employment for cause or if the Company or its
successor terminates his employment without cause. Cause for terminating
employment is defined in the agreement.


                                       20
<PAGE>
     The agreement also generally provides that, for a period of 12 months
following the termination of Mr. Bouchette's employment, he will not compete
with the Bank in the banking business nor solicit the Bank's customers or
employees. The non-competition and non-solicitation provisions of the agreement
only apply if Mr. Bouchette terminates his employment without cause or in
connection with a change of control, or if we terminate his employment with
cause.

OPTION  GRANTS  IN  FISCAL  YEAR  2001

     The Company did not grant any stock options or stock appreciation rights to
any of the named executive officers during 2001.

OPTIONS  EXERCISED  IN  FISCAL  YEAR  2001

     No options were exercised by our named executive officers in fiscal year
2001 and no options held by our named executive officers were in the money as of
December 31, 2001.

COMPENSATION  OF  DIRECTORS

     The Company and the Bank do not separately compensate their directors for
their service as directors, nor will their directors receive directors
compensation until the Company and the Bank have recovered all of their losses.
Thereafter, the Company and the Bank may adopt director compensation policies
that conform to applicable law.


ITEM  11.     SECURITY  OWNERSHIP  OF  CERTAIN  BENEFICIAL OWNERS AND MANAGEMENT

     The following table sets forth the number of shares of the Company's common
stock beneficially owned as of March 11, 2002 by (a) each director of the
Company, (b) all executive officers and directors, as a group and (c) all
holders of more than 5% of the Company's outstanding common stock, known to the
Company. The information shown below is based upon information furnished to the
Company by the named persons. Unless otherwise indicated, each person is the
record owner and has sole voting and investment power with respect to his or her
shares. Other than the persons listed below, we are unaware of any other holders
of more than 5% of the Company's outstanding common stock. Additionally, the
address of each director is 4367 Riverwood Drive, P.O. Box 1359, Murrells Inlet,
South Carolina 29576.

     Information relating to beneficial ownership of the Company is based upon
"beneficial ownership" concepts set forth in the rules promulgated under the
Securities Exchange Act. Under these rules a person is deemed to be a
"beneficial owner" of a security if that person has or shares "voting power,"
which includes the power to vote or to direct the voting of a security, or
"investment power," which includes the power to dispose or to direct the
disposition of a security. Under the rules, more than one person may be deemed
to be a beneficial owner of the same securities. A person is also deemed to be a
beneficial owner of any security as to which that person has the right to
acquire beneficial ownership within sixty (60) days from the record date.


                                       21
<PAGE>
<TABLE>
<CAPTION>
                                      NUMBER OF
                                        SHARES       TOTAL
                             NUMBER   SUBJECT TO     SHARES
NAME OF BENEFICIAL             OF     OPTIONS OR  BENEFICIALLY  PERCENT          NATURE OF BENEFICIAL
OWNER                        SHARES   WARRANTS(1)    OWNED      OF CLASS              OWNERSHIP
-----------------------------------------------------------------------------------------------------------
<S>                          <C>      <C>         <C>           <C>       <C>
DIRECTORS:

Thomas Bouchette*             14,325      17,883        32,208       4.4

Edsel J. ("Coupe") DeVille    18,325       5,167        23,492       3.3

John S. Divine, III           30,325       7,500        37,825       5.2

Dalton F. Floyd, Jr.*         33,025       8,333        41,358       5.7  Includes (a) 1,500 shares held by
                                                                          Dalton Floyd Ltd., (b) 11,000
                                                                          shares held jointly with Mr.
                                                                          Floyd's spouse, (c) 100 shares
                                                                          held by Bradley Floyd, and (d)
                                                                          100 shares held by Blake Floyd,
                                                                          as to which beneficial ownership
                                                                          is shared.

Jeanne Louise Fourrier-       32,030       5,833        37,863       5.3  Includes (a) 7,500 shared held
Eggart                                                                    by Ms. Fourrier-Eggart's spouse
                                                                          and (b) 1,710 shares held as
                                                                          custodian for Ms. Fourrier-
                                                                          Eggart's children as to which
                                                                          beneficial ownership is shared.

David E. Grabeman             25,325       5,833        31,158       4.3  Includes 2,500 shares held in the
                                                                          David Grabeman Pension as to
                                                                          which beneficial ownership is
                                                                          shared.

Richard Edwin Heath           12,832       3,333        16,165       2.3

Paul John Hletko              30,325       7,500        37,825       5.2  Includes (a) 20,000 shares held
                                                                          by the Hletko Family Trust and
                                                                          (b) 7,500 shares held in the
                                                                          Hletko Profit Sharing Plan as to
                                                                          which beneficial ownership is
                                                                          shared.

Judy B. Long                  18,025       5,033        23,058       3.2  Includes 15,200 shares held
                                                                          jointly with Ms. Long's spouse
                                                                          as to which beneficial ownership
                                                                          is shared.

Georgie B. Martin             31,903       4,167        36,070       5.0  Includes 200 shares held as
                                                                          custodian for Noah P. Carter as
                                                                          to which beneficial ownership is
                                                                          shared.

Thomas O. Morris, Jr.         27,825       8,333        36,158       5.0


                                       22
<PAGE>
                                      NUMBER OF
                                        SHARES       TOTAL
                             NUMBER   SUBJECT TO     SHARES
NAME OF BENEFICIAL             OF     OPTIONS OR  BENEFICIALLY  PERCENT          NATURE OF BENEFICIAL
OWNER                        SHARES   WARRANTS1      OWNED      OF CLASS              OWNERSHIP
------------------------------------------------------------------------------------------------------------

Joel A. Pellicci              22,825       5,000        27,825       3.9

Donald E. Perry               22,825       5,833        28,658       4.0

Chandler C. Prosser           32,825      10,000        42,825       5.9

Larry N. Prosser              32,825      10,000        42,825       5.9

                             -------  ----------  ------------  --------

ALL DIRECTORS AND
EXECUTIVE OFFICERS AS A
GROUP (15 PERSONS)           385,565      95,450       495,315      60.1

5% BENEFICIAL OWNERS:

Dr. Edward C. Floyd           68,285           0        68,285       9.6

--------------------
<FN>
1     Represents  shares  subject  to  options  or  warrants  exercisable within 60 days of the record date.
*     Mr.  Bouchette  is  the  president  of the Company and Mr. Floyd is the chief executive officer of the
      Company.
</TABLE>

ITEM  12.     CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS

     The Company and the Bank have banking and other business transactions in
the ordinary course of business with directors and officers of the Company and
the Bank, including members of their families or corporations, partnerships or
other organizations in which such directors and officers have a controlling
interest. These transactions are on substantially the same terms (including
price, or interest rate and collateral) as those prevailing at the time for
comparable transactions with unrelated parties, and any banking transactions do
not involve more than the normal risk of collectibility or present other
unfavorable features to the Company and the Bank, and are on terms no less
favorable than could be obtained from an unaffiliated third party and are
approved by a majority of the directors, including a majority of the
disinterested directors.

     In addition to transactions in the ordinary course of our business, we have
entered into the following business transactions with the directors indicated:

     LEASE OF MAIN OFFICE SITE. In May 2000, we entered into a lease agreement
with Riverwood Enterprises, LLC, a South Carolina limited liability company, for
the lease of the site for our permanent main office building. Mr. Dalton B.
Floyd, Jr., the chairman of our board of directors and chief executive officer
of Sun Bancshares, owns a 50% interest in Riverwood Enterprises. The amount of
the annual rent for the first year of the lease was $90,000, with annual
adjustments based on the consumer price index thereafter. The initial term of
the lease will be 25 years with renewal options for a total of 15 additional
years. The lease calls for us to pay taxes, insurance and repairs on the leased
property. Based on our review of two independent appraisals, we believe the
terms of the lease are no less favorable than those that could be obtained from
an unrelated third party.


                                       23
<PAGE>
     LEASE OF SITE FOR TEMPORARY MAIN OFFICE. Currently and through the
construction of our main office, we will operate out of a temporary modular
facility, which is located on a temporary site approximately one-tenth of a mile
from our permanent main office site. We are leasing this temporary site from
Wachesaw Development, LLC. Mr. Larry N. Prosser, one of our directors, is the
sole owner of Wachesaw Development, LLC. The lease began in May 2000 on a
month-to-month basis. On July 9, 2001, we entered into a lease agreement with
Wachesaw Development, LLC for the temporary site. The initial term of the Lease
Agreement will end on December 31, 2002. The Lease Agreement provides that we
may terminate the agreement prior to December 31, 2002 by giving 30 days'
written notice and that we may extend the lease for two six-month periods. The
monthly rental rate is currently $2,000. In the event we extend the lease, the
montly rental rate may increase to $5,000 per month for the first six-month
period and to $10,000 per month for the second six-month period if the leased
property has been sold to a third party, subject to an assignment of the lease.
In the third quarter of 2001, Wachesaw Development, LLC sold the property to an
unrelated third party and assigned the lease to the purchaser.

     Based on our review of the independent appraisals for our permanent main
office site and the recent purchase price of a similar property located across
the street, we believe the terms of this lease are no less favorable than those
that could be obtained from an unrelated third party. Due to the short term of
the lease and limited amount of the lease payments, the board determined that an
independent appraisal was neither cost effective nor necessary for it to
establish that the lease arrangement is on no less favorable terms than could be
obtained from an unrelated third party.


ITEM  13.     EXHIBITS,  LISTS  AND  REPORTS  ON  FORM  10-KSB

(a)     Exhibits

Exhibit
Number    Exhibit
------    -------

3.1(a)    Articles  of  Incorporation(1)

3.1(b)    Articles  of  Incorporation(1)

3.2       Bylaws(1)

3.3       First  Amendment  to  the  Bylaws

4.1       Specimen  Stock  Certificate(2)

4.2       See  Exhibits 3.1(a), 3.1(b) and 3.2 for provisions of the Articles of
          Incorporation  and  Bylaws  defining  rights  of holders of the common
          stock

10.1      Letter of Intent for Lease dated October 20, 1999 (Murrells Inlet main
          office  site)(1)

10.2      Option  Agreement  (For  Lease)  dated  November  12, 1999 (Georgetown
          branch  office  site)(1)


                                       24
<PAGE>
10.3 *    Employment Agreement dated March 30, 2000 (effective January 1, 2000),
          among  SunBank  N.A.  (Proposed),  Sun  Bancshares,  Inc.  and  Thomas
          Bouchette(2)

10.4      Form  of Sun Bancshares, Inc. Organizers' Warrant Agreement Banking(1)

10.5 *    Amended  and  Restated  Sun  Bancshares,  Inc.  2000  Stock  Incentive
          Plan(3)

10.6 *    Form  of  Sun  Bancshares,  Inc.  Incentive  Stock  Option  Award(3)

10.7      Promissory Note  dated  July 19, 2000 between Sun Bancshares, Inc. and
          The Bankers Bank (replacing Promissory Note dated January 26, 2000)(1)

10.8      Form  of  Commercial  Guaranty(1)

10.9      Lease  Agreement  by  and  between  Riverwood Enterprises, LLC and Sun
          Bancshares,  Inc.  (Murrells  Inlet  main  office  site)(3)

10.10     Lease  Agreement  by and between Richmond Realty Company, LLC and C.C.
          Grimes,  Jr.  as  Trustee and  Sun Bancshares, Inc. (Georgetown branch
          office  site)  (3)

13.1      Sun  Bancshares, Inc. 2001 Annual Report to Shareholders.  Except with
          respect  to those portions specifically incorporated by reference into
          this  Report, the  Company's 2001 Annual Report to Shareholders is not
          deemed  to  be  filed  as  part  of  this  Report.

22.1      Subsidiaries  of  Sun  Bancshares,  Inc.

24.1      Power  of  Attorney  (appears  on  the  signature pages to this Annual
          Report on  10-KSB)

99.1      2002 Proxy  Statement sent to security holders of Sun Bancshares, Inc.
_________________________
*     Compensatory  plan  or  arrangement.

(1)  Incorporated herein by reference to exhibit of same number to the Company's
     Registration  Statement  on  Form  SB-2,  Registration No. 333-30182, filed
     February  11,  2000.

(2)  Incorporated herein by reference to exhibit of same number to Amendment No.
     1  to  the  Company's Registration Statement on Form SB-2, Registration No.
     333-30182,  filed  March  31,  2000.

(3)  Incorporated herein by reference to exhibit of same number to Amendment No.
     2  to  the  Company's Registration Statement on Form SB-2, Registration No.
     333-30182,  filed  September  19,  2000.

(b)  Reports  on  Form  8-K  filed  in  the  fourth  quarter  of 2002:  None.


                                       25
<PAGE>
SUPPLEMENTAL  INFORMATION  TO  BE  FURNISHED  WITH  REPORTS  FILED
PURSUANT  TO  SECTION  15(D)  OF  THE  EXCHANGE  ACT  BY  NON-REPORTING ISSUERS.

     The  Company's  2001  Annual Report to security holders is included in this
Annual  Report on Form 10-KSB at exhibit 13.1, and the Company's Proxy Statement
for its annual meeting of shareholders is included in this Annual Report on Form
10-KSB  at  exhibit  99.1.


                                       26
<PAGE>
                                   SIGNATURES

     Pursuant  to  the  requirements  of  Section  13 or 15(d) 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.



                                          SUN  BANCSHARES,  INC.




                                          By:     /s/  Thomas  Bouchette
                                                  ----------------------
                                                  Thomas  Bouchette
                                                  President

                                          Date:   March  18,  2002


                                       27
<PAGE>
                                POWER OF ATTORNEY

     KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears on
the signature page to this Report constitutes and appoints Thomas Bouchette and
Dalton B. Floyd, Jr., his or her true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution, for him or her and in his or
her name, place, and stead, in any and all capacities, to sign any and all
amendments to this Report, and to file the same, with all exhibits hereto, and
other documents in connection herewith with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as
they might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or their substitute or substitutes, may lawfully do
or cause to be done by virtue hereof.

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.


         SIGNATURE                             TITLE                   DATE
----------------------------------  ----------------------------  --------------


 /s/ Thomas Bouchette               President and Director*       March 18, 2002
----------------------------------
Thomas Bouchette


 /s/ Randy L. Carmon                Chief Financial Officer**     March 18, 2002
----------------------------------
Randy L. Carmon


 /s/ Edsel J. Deville               Director                      March 11, 2002
----------------------------------
Edsel J. Deville


                                    Director                      March __, 2002
----------------------------------
John S. Divine, III


                                    Chairman and Chief Executive  March __, 2002
----------------------------------
Dalton B. Floyd, Jr.                Officer


 /s/ Jeanne Louise Fourrier-Eggart  Director                      March 11, 2002
----------------------------------
Jeanne Louise Fourrier-Eggart


                                    Director                      March __, 2002
----------------------------------
David E. Grabeman


 /s/ Richard Edwin Heath            Director                      March 11, 2002
----------------------------------
Richard Edwin Heath


 /s/ John Paul Hletko               Director                      March 11, 2002
----------------------------------
Paul John Hletko


                                       28
<PAGE>
 /s/ Judy Long                      Director                      March 11, 2002
----------------------------------
Judy Long


 /s/ Georgie B. Martin              Director                      March 11, 2002
----------------------------------
Georgie B. Martin


                                    Director                      March __, 2002
----------------------------------
Thomas Morris


 /s/ Joel A. Pellici                Director                      March 11, 2002
----------------------------------
Joel A. Pellicci


 /s/ Donald Perry                   Director                      March 11, 2002
----------------------------------
Donald Perry


                                    Director                      March __, 2002
----------------------------------
Chandler C. Prosser


                                    Director                      March __, 2002
----------------------------------
Larry N. Prosser

_____________________________

*   Principal  executive.
**  Principal  executive,  financial  and  accounting  officer.



                                       29
<PAGE>
                                  EXHIBIT INDEX
                                  -------------

Exhibit
Number    Exhibit
------    -------

3.1(a)    Articles  of  Incorporation(1)

3.1(b)    Articles  of  Incorporation(1)

3.2       Bylaws(1)

3.3       First  Amendment  to  the  Bylaws

4.1       Specimen  Stock  Certificate(2)

4.2       See  Exhibits 3.1(a), 3.1(b) and 3.2 for provisions of the Articles of
          Incorporation  and  Bylaws  defining  rights  of holders of the common
          stock

10.1      Letter of Intent for Lease dated October 20, 1999 (Murrells Inlet main
          office  site)(1)

10.2      Option  Agreement  (For  Lease)  dated  November  12, 1999 (Georgetown
          branch  office  site)(1)

10.3 *    Employment Agreement dated March 30, 2000 (effective January 1, 2000),
          among  SunBank  N.A.  (Proposed),  Sun  Bancshares,  Inc.  and  Thomas
          Bouchette(2)

10.4      Form  of Sun Bancshares, Inc. Organizers' Warrant Agreement Banking(1)

10.5  *   Amended  and  Restated  Sun  Bancshares,  Inc.  2000  Stock  Incentive
          Plan(3)

10.6  *   Form  of  Sun  Bancshares,  Inc.  Incentive  Stock  Option  Award(3)

10.7     Promissory  Note  dated  July 19, 2000 between Sun Bancshares, Inc. and
         The Bankers Bank (replacing Promissory Note dated January 26, 2000)(1)

10.8     Form  of  Commercial  Guaranty(1)

10.9     Lease  Agreement  by  and  between  Riverwood  Enterprises, LLC and Sun
         Bancshares,  Inc.  (Murrells  Inlet  main  office  site)(3)

10.10    Lease  Agreement  by  and between Richmond Realty Company, LLC and C.C.
         Grimes,  Jr.  as  Trustee  and  Sun Bancshares, Inc. (Georgetown branch
         office  site)  (3)

13.1     Sun  Bancshares,  Inc. 2001 Annual Report to Shareholders.  Except with
         respect  to  those portions specifically incorporated by reference into
         this  Report,  the  Company's 2001 Annual Report to Shareholders is not
         deemed  to  be  filed  as  part  of  this  Report.

22.2     Subsidiaries  of  Sun  Bancshares,  Inc.

24.1     Power of Attorney (appears on the signature pages to this Annual Report
         on  10-KSB)


                                       30
<PAGE>
99.1     2002  Proxy  Statement sent to security holders of Sun Bancshares, Inc.

-----------------------
*    Compensatory  plan  or  arrangement.

(1)  Incorporated herein by reference to exhibit of same number to the Company's
     Registration  Statement  on  Form  SB-2,  Registration No. 333-30182, filed
     February  11,  2000.

(2)  Incorporated herein by reference to exhibit of same number to Amendment No.
     1  to  the  Company's Registration Statement on Form SB-2, Registration No.
     333-30182,  filed  March  31,  2000.

(3)  Incorporated herein by reference to exhibit of same number to Amendment No.
     2  to  the  Company's Registration Statement on Form SB-2, Registration No.
     333-30182,  filed  September  19,  2000.

(b)  Reports on Form 8-K filed in the fourth quarter of 2002:  None.


                                       31
<PAGE>