SOUTH ALABAMA BANCORPORATION INC /DE/, 10-K, 1996-03-28

SOUTH ALABAMA BANCORPORATION INC /DE/
10-K, 1996-03-28
NATIONAL COMMERCIAL BANKS

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FORM 10-K

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, 1995
Commission File No. 0-15423
__________________

SOUTH ALABAMA BANCORPORATION, INC.
(Exact name of registrant as specified in its charter)

Delaware 63-0909434
(State of Incorporation) (IRS Employer Identification No.)

100 Saint Joseph Street
P. O. Box 3067
Mobile, Alabama 36652 334-431-7800
(Address of principal executive office) (Telephone Number)

Securities registered pursuant to Section 12(b) of the
Act:
NONE
Securities registered pursuant to Section 12(g) of the
Act:
COMMON STOCK $.01 PAR
(Title of Class)
____________________

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No

Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's knowledge,
in the definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
form 10-K. [X]

Aggregate market value of the Common Stock ($.01 Par) held by
nonaffiliates of the registrant as of March 15, 1996 (assuming
that all officers, directors and 5% shareholders are affiliates):
$26,372,559

Shares of Common Stock ($.01 Par) outstanding at March 15, 1996:
$3,001,562

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Annual Report to Shareholders for the year ended
December 31, 1995 are incorporated by reference into Parts I and
II and portions of the Proxy Statement for the 1996 annual
meeting are incorporated by reference into Part III.

Part I

Item 1. Business

General

South Alabama Bancorporation, Inc. ("South Alabama") is the
parent company and owner of 100% of the stock of the Bank of
Mobile (the "Mobile Bank") headquartered in Mobile, Alabama, and
of First National Bank, Brewton (the "Brewton Bank"),
headquartered in Brewton, Alabama. South Alabama is a registered
bank holding company incorporated under Delaware law in 1985
under the name Mobile National Corporation ("MNC"). On September
30, 1993, the former parent company of the Brewton Bank was
merged with and into MNC (the "Merger"), at which time MNC
assumed the name South Alabama.

In 1986, MNC acquired all of the stock of the Mobile Bank, a
national banking association which commenced operations in that
same year. In 1991, the Mobile Bank converted to a state
chartered bank under the laws of the State of Alabama. In 1986,
the former parent company of the Brewton Bank acquired all of the
stock of the Brewton Bank, a national banking association which
commenced operations in 1912 as Farmers and Merchants Bank and is
the successor of several state banks.

South Alabama's corporate headquarters are located at 100
Saint Joseph Street, Mobile, Alabama 36602. The following table
reflects certain basic information concerning South Alabama and
its subsidiary banks as of December 31, 1995.

<TABLE>
<CAPTION>
Brewton Bank Mobile Bank South Alabama
Consolidated

<S> <C> <C> <C>
Banking Offices 3 7 10
Employees 67 86 153
Percent of Ownership 100% 100% -
Loans (Net) $ 53,702,000 $ 88,101,000 $141,803,000
Investments $ 40,945,000 $ 21,248,000 $ 62,193,000
Total Assets $107,265,000 $136,995,000 $244,949,000
Deposits $ 91,849,000 $118,446,000 $210,092,000
Equity Capital $ 14,346,000 $ 13,472,000 $ 28,797,000

</TABLE>
South Alabama reviews policy for the banks and coordinates
certain of their common internal functions, such as loan review,
marketing and business development, accounting, auditing,
compliance and computer operations. South Alabama utilizes the
services and capabilities of the staffs of the banks in
conducting its business. South Alabama has under consideration
the acquisition of additional banks and or the organization of
additional subsidiaries to engage in bank related activities, and
to that end officers of South Alabama are engaged in general
discussions with the principals of other banking organizations
from time to time.

Information Incorporated by Reference

Additional information concerning the business of South
Alabama is set forth in the Annual Report to Shareholders for the
year ended December 31, 1995 at pages 8-22 and is incorporated
herein by reference.

Operations of Subsidiary Banks

Both the Brewton Bank's and the Mobile Bank's deposits are
insured to the maximum limits allowed by the Bank Insurance Fund
of the Federal Deposit Insurance Corporation ("FDIC"). The banks
offer similar banking services including business and personal
checking accounts, money market accounts, savings accounts,
certificates of deposit, overdraft protection, the extension of
business and personal loans, mortgages on commercial and
residential real estate, corporate and personal trust services,
access to automated teller machines through the Alert System of
Alabama Network, Inc., retail repurchase agreements, safe deposit
box facilities, credit card privileges, travelers' checks, money
orders, letters of credit, foreign transfers and remittances and
wire transfers. Mutual funds, annuities and certain insurance
products are offered through South Alabama Financial Services,
Inc., a subsidiary of the Mobile Bank. The banks also offer
general banking advice and consultation to the public as well as
other customer convenience and community oriented services.
Additionally, the banks have relationships with correspondent
banks to offer additional services which may be requested by
their customers. Neither bank currently offers international
banking services.

The Brewton Bank currently operates three offices located in
and around Brewton. The Mobile Bank has seven banking offices,
three of which are located inside supermarkets within the
corporate limits of the City of Mobile. The Mobile Bank has
purchased two parcels of land in Baldwin County for future branch
expansion.

Market Served

The Brewton Bank

The primary service area of the Brewton Bank is a 15 mile
radius of Brewton. Manufacturing employs the greatest number of
workers in the county. Government and the wholesale and retail
trade also employ a significant number of workers. The largest
employer in the trade area is Container Corporation of America,
employing approximately 600 workers. T.R. Miller Mill Co., a
lumber manufacturer is the second largest employer with
approximately 400 workers. The area has a 160 acre industrial
park which includes all necessary utilities. Brewton Municipal
Airport serves commuter air travel and commercial air service is
available in nearby Pensacola, Florida. CSX Transportation
provides railroad carrier services and the City of Brewton is
served by two bus lines. During 1995 announced capital
investment in new and expanded industry in Escambia County
totalled approximately $14,153, 000, resulting in an announced
262 new jobs according to the Escambia County Industrial
Development Authority.

The Mobile Bank

The Mobile Bank's principal office is located in downtown
Mobile, Alabama, which is situated on the western shore of Mobile
Bay, bordering the Gulf of Mexico. The Bank's primary geographic
market is comprised of Mobile County and Baldwin County. The
population of the Mobile County/Baldwin County market is
approximately 501,520 persons according to the Mobile and Baldwin
County Chambers of Commerce.

The economy of Mobile County is primarily industrial in
nature. The largest employers are engaged in manufacture of
paper products, providing health care services, production of
chemicals, production of nylon and rayon, processing retail
catalogue orders and manufacture of piston aircraft engines.
Southwest Alabama, including Mobile County, has been the major
oil and gas producing region in Alabama for many years.
The seafood industry and ship building and repair industry also
make significant contributions to the economy of the area. The
Port of Mobile, Alabama's only port, is one of the nation's
busiest in tons of cargo handled, and through itthe City is
served by more than 135 steamship lines. During 1995 announced
capital investment in new and expanded industry in Mobile County
totalled approximately $178,500,000, resulting in an announced
1,137 additional jobs, according to the Mobile Chamber of
Commerce.

The economy of Baldwin County (including the communities of
Spanish Fort, Daphne, Montrose, Fairhope and Point Clear) is
based mostly on growth as a residential area, although it is also
supported by light manufacturing and tourism.

Competition

The Brewton Bank

There are three headquartered banks located in the trade
area. A total of eight financial institutions are located in
Escambia County. The Brewton Bank is the largest bank in terms
of deposits in Escambia County with a market share of deposits of
approximately 23.11 percent. The second and third largest banks
in the county have market shares of approximately 20.05 percent
and 19.49 percent. Also providing competition are credit unions,
finance companies, mortgage companies and securities brokerage
firms.

The Mobile Bank

The Mobile Bank faces intense competition in its market
area. There are currently 16 commercial banks and two savings
banks doing business in the Mobile/Baldwin County market. The
primary competitors are the six commercial banks affiliated with
statewide bank holding companies, each of which has a substantial
market share and substantially greater total resources. These
competitors have numerous branch offices located throughout the
market area. The other commercial banks and savings banks
(together with credit unions, finance companies, insurance
companies, mortgage companies, securities brokerage firms, money
market mutual funds, loan production offices operated by
out-of-state banks, and other providers of financial services
in the area) also provide significant competition.

Supervision and Regulation

South Alabama is a bank holding company within the meaning
of the Bank Holding Company Act of 1956, as amended (the "Act"),
and is registered as such with the Board of Governors of the
Federal Reserve System (the "Board of Governors'). The Act
prohibits, subject to certain exceptions, a bank holding company
from engaging in or acquiring direct or indirect control of more
than 5% of the voting stock of any company engaged in non-banking
activities. Activities expressly found by the Board of
Governors, by order or regulation, to be so closely related to
banking or managing or controlling banks as to be a proper
incident thereto, such as acting as fiduciary or investment or
financial advisor, selling or underwriting insurance coverage
directly related to extensions of credit, and the leasing of real
and personal property, are excepted from this prohibition.

The Act requires every bank holding company to obtain the
prior approval of the Board of Governors before it may acquire
substantially all of the assets of any bank or control of any
voting shares of any bank, if, after such acquisition, it would
own or control, directly or indirectly, more than 5% of the
voting shares of such bank. In no case, however, may the Board
approve an acquisition by South Alabama of the voting shares of,
or substantially all the assets of, any bank located outside
Alabama unless such acquisition is specifically authorized by the
laws of the state in which the bank to be acquired is located.

As a registered bank holding company, South Alabama is
required to file with the Board of Governors an annual report and
such additional information as the Board of Governors may require
pursuant to the Act. The Board may also conduct examinations
of South Alabama and each of its subsidiaries.

Subsidiary banks of a bank holding company are subject to
certain restrictions on extensions of credit to the bank holding
company or any of its subsidiaries, on investments in the stock
or other securities thereof and on the acceptance of such stocks
or securities as collateral for loans to any borrower. Also, such
subsidiaries are generally prohibited from conditioning the
extension of credit or other services, or conditioning the
lease or sale of property, on the customer's agreement to obtain
or furnish some additional credit, property or service from or to
such subsidiary or an affiliate.

As subsidiary banks, both the Brewton Bank and the Mobile
Bank are subject to supervision and regulation by the Board of
Governors of the Federal Reserve System. As a national banking
institution, the Brewton Bank is subject to federal banking laws
and is subject to supervision and regular examination by the
Office of the Comptroller of the Currency. The Mobile Bank is a
state bank, subject to state banking laws and regulation,
supervision and regular examination by the Alabama State
Department of Banking and the FDIC.

Areas subject to regulation include dividend payments,
reserves, investments, loans, mergers, issuance of securities,
establishment of branches and other aspects ofoperation,
including compliance with truth-in-lending and usury laws.

Because South Alabama is subject to the provisions of the
Bank Holding Company Act of 1956, South Alabama and its
subsidiaries are affected by the credit policies of the Board of
Governors of the Federal Reserve System. A function of the
Federal Reserve System is to regulate the national supply of bank
credit in order to combat recessions and curb inflationary
pressures. Among the instruments of monetary policy used to
implement these objectives are open-market operations in United
States Government securities, changes in the discount rate on
member bank borrowings, changes in reserve requirements against
member bank deposits, and limitations on the payment of interest
for certain deposit accounts. The effect of such policies upon
the future business and earnings of South Alabama and its
subsidiaries cannot be predicted with certainty.

Item 2. Properties

South Alabama and the Mobile Bank occupy leased premises
located in downtown Mobile, Alabama consisting of a building
complex of approximately 30,000 square feet. The primary term of
the lease of the building complex expires December 31, 2005. The
Bank has an option to extend the term of this lease for three
additional terms of five years each.

In addition to the downtown office, the Mobile Bank operates
six full service branch offices at various locations in Mobile
County. The banking premises of one branch and the land adjacent
to the branch are owned in fee, while five branches, three of
which are located inside supermarkets, are leased for varying
periods through 1999.

The Brewton Bank's main office, containing approximately
6,832 square feet, is located in downtown Brewton, Alabama. This
main office is owned in fee. In addition, the Brewton Bank
operates two branches, one in the City of Brewton and one in the
City of East Brewton. Both of these branches are owned in fee.

Item 3. Legal Proceedings

As of the date of this report there were no material pending
legal proceedings to which South Alabama or either of the Banks
was a party.

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

No matters were submitted to a vote of security holders
during the fourth quarter of 1995.

Optional Item. Executive Officers of the Registrant

The following table reflects certain information concerning
the executive officers of South Alabama. Each such officer holds
his office(s) until the first meeting of the Board of Directors
following the annual meeting of stockholders each year, or until
a successor is chosen, subject to removal at any time by the
Board of Directors. Except as otherwise indicated, no family
relationships exist among the executive officers and directors of
South Alabama, and no such officer holds his office(s) by virtue
of any arrangement or understanding between him and any other
person except the Board of Directors.

<PAGE>
Name, Age and Office(s) with Other Positions with
South Alabama South Alabama

J. Stephen Nelson--age 58(1) Director (since 1993)
Chairman (since 1993)

W. Bibb Lamar, Jr.--age 52(2) Director (since 1989)
President and CEO (since 1989)

W. Gaillard Bixler--age 50(3) None
Executive Vice President & Chief Operating
Officer (since 1993)

F. Michael Johnson--age 50(4) None
Chief Financial Officer & Secretary (since 1993)

Dan Britton--age 49(5) None
Executive Vice President, Trust, First National
Bank, Brewton (since 1993)

Percy C. Fountain, Jr.--age 51(6) None
Executive Vice President, The Bank of Mobile
(since 1993)

H. Harrell Galloway--age 63(7) None
Executive Vice President & Trust Officer, The Bank
of Mobile (since 1986)

Bruce C. Finley, Jr.--age 47(8) None
Senior Vice President & Senior Lending Officer,
The Bank of Mobile (since 1993)

Ray H. Miller, III--age 52(9) None
Senior Vice President, The Bank of Mobile
(since 1994)

(1) Chairman, since 1993, Chief Executive Officer, since
1984, and Director, since 1979, the Brewton Bank. From 1986
until the Merger, Mr. Nelson was also President and a director of
the Brewton Bank's holding company.

(2) President and Chief Executive Officer, since 1989, the
Mobile Bank. Previously: Executive Vice President of the Mobile
Bank (January-December 1989), and Senior Vice President
(1984-1989) of the Commercial Loan Department of First Alabama
Bank of Mobile (formerly Merchants National Bank).

(3) President and Chief Operating Officer, since 1993, and
Director, since 1991, the Brewton Bank. Previously: Senior Vice
President and Senior Loan Officer (1989-Feb. 1993), the Brewton
Bank. From 1991 until the Merger, Mr. Bixler was also a director
of the Brewton Bank's holding company.

(4) Executive Vice President and Cashier, since 1986, the
Mobile Bank. Previously: Executive Vice President (1984-1993) and
Director (1987-1990), MNC and the Mobile Bank.

(5) Director, since 1983, the Brewton Bank. Previously:
Senior Vice President and Senior Trust Officer (1988-1992), the
Brewton Bank. From 1986 until the Merger, Mr. Britton was also a
director of the Brewton Bank's holding company.

(6) Previously: Senior Vice President (1989-1993), the
Mobile Bank and Vice President, Commercial Lending (1987-1989),
AmSouth Bank N.A.

(7) Previously: Senior Vice President and Trust Officer
(1983-1986), AmSouth Bank N.A.

(8) Previously: Vice President and Senior Lending Officer
(1989-1993), the Mobile Bank, and Vice President, Commercial
Lending (1986-1989), First Alabama Bank of Mobile (formerly
Merchants National Bank).

(9) Previously: Director (1991-1994), MNC and the Mobile
Bank, Executive Director, Infiniti of Mobile (1993-1994) and
Senior Vice President of Sales and Marketing (1989-1992), Lerio
Corporation.

Part II

Item 5. Market for the Registrant's Common Equity and
Related Stockholder Matters

The information called for by Item 5 is set forth in South
Alabama's Annual Report to Shareholders for the year ended
December 31, 1995 at page 25 under the heading "Market Prices and
Cash Dividends Per Share" and is incorporated herein by
reference.

Item 6. Selected Financial Data

The information called for by Item 6 is set forth in South
Alabama's Annual Report to Shareholders for the year ended
December 31, 1995 at page 24 under the heading "Selected
Financial Data" and is incorporated herein by reference.

Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operation

The information called for by Item 7 is set forth in South
Alabama's Annual Report to Shareholders for the year ended
December 31, 1995 at pages 8-22 under the heading "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" and is incorporated herein by reference.

Item 8. Financial Statements and Supplementary Data

The information called for by Item 8, is set forth in South
Alabama's Annual Report to Shareholders for the year ended
December 31, 1995 at page 23 and at pages 26-43 and is
incorporated herein by reference.

Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure

The disclosure required by this Item has been previously
reported in a current report on Form 8-K, dated September 27,
1995, and in the Company's Proxy Statement for the 1996 annual
meeting.

Part III

Item 10. Directors and Executive Officers of the Registrant

A portion of the information called for by Item 10 is set
forth above in an Optional Item in Part I. The balance of the
information called for by Item 10 is set forth in South Alabama's
Proxy Statement for the 1996 annual meeting under the captions
"ELECTION OF DIRECTORS" and "VOTING SECURITIES--Director and
Officer Securities Reports" and is incorporated herein by
reference.

Item 11. Executive Compensation

The information called for by Item 11 is set forth in South
Alabama's Proxy Statement for the 1996 annual meeting under the
caption "EXECUTIVE COMPENSATION" and is incorporated herein by
reference.

Item 12. Security Ownership of Certain Beneficial Owners
and Management

The information called for by Item 12 is set forth in South
Alabama's Proxy Statement for the 1996 annual meeting under the
caption "VOTING SECURITIES--Security Ownership of Directors,
Nominees, 5% Shareholders and Officers" and is incorporated
herein by reference.

Item 13. Certain Relationships and Related Transactions

The information called for by Item 13 is set forth in South
Alabama's Proxy Statement for the 1996 annual meeting under the
caption "CERTAIN TRANSACTIONS AND MATTERS" and is incorporated
herein by reference.

Part IV

Item 14. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K

(a) 1. Financial Statements:

The following consolidated financial statements of the
registrant and its subsidiaries, and Report of Independent
Auditors, included in the registrant's Annual Report to
Shareholders for the year ended December 31, 1995, a copy of
which is included as an exhibit to this report, are incorporated
herein by reference:

Report of Independent Auditors' Report.

Consolidated Statements of Condition as of December 31,
1995 and 1994.

Consolidated Statements of Income for the years ended
December 31, 1995, 1994 and 1993.

Consolidated Statements of Changes in Shareholders'
Equity for the years ended December 31, 1995, 1994 and 1993.

Consolidated Statements of Cash Flows for the years
ended December 31, 1995, 1994 and 1993.

Notes to Consolidated Financial Statements.

Independent Auditors' Report

(a) 2. Financial Statement Schedules

None.

(a) 3. Exhibits:

(2) Plan of acquisition, reorganization, arrangement,
liquidation or succession.

.1 Agreement and Plan of Merger, dated as of March
16, 1993, as amended and restated as of July 19, 1993, filed as
Exhibit (2).1 to the registrant's Registration Statement on Form
S-4 on July 2, 1993 (No. 33-65588), is incorporated herein by
reference.

(3) Articles of Incorporation and By-Laws.

.1 Restated Certificate of Incorporation of Mobile
National Corporation, as amended by the Certificate of Amendment
to Restated Certificate of Incorporation dated May 15, 1987,
filed as Exhibit (3).1 to the registrant's annual report on Form
10-K for the year 1988 (No. 0-15423), is incorporated herein by
reference.

.2 Certificate of Amendment to Restated Certificate
of Incorporation, as amended, dated April 30, 1992, filed as
Exhibit (3) .2 to registrant's annual report on Form 10-K for the
year 1992 (No. 0-15423), is incorporated herein by reference.

.3 Certificate of Merger dated September 30, 1993,
amending registrant's Restated Certificate of Incorporation, as
amended, filed as Exhibit (3).3 to registrant's annual report on
Form 10-K for the year 1993 (No. 0-15423), is incorporated herein
by reference.

.4 Bylaws of Mobile National Corporation, amended as
of February 9, 1988, filed as Exhibit (3).2 to the registrant's
annual report on Form 10-K for the year 1987 (No. 0-15423), is
incorporated herein by reference.

(4) Instruments defining the rights of security holders,
including indentures.

.1 Specimen of Common Stock Certificate of South
Alabama Bancorporation, Inc., filed as Exhibit (4).2 to
the registrant's annual report on Form 10-K for the year 1993
(No.0-15423), is incorporated by reference.

.2 Restated Certificate of Incorporation, as amended
by the Certificate of Amendment to Restated Certificate of
Incorporation dated May 15, 1987, filed as Exhibit (3).1 to the
registrant's annual report on Form 10-K for the year 1988
(No.0-15423), is incorporated herein by reference.

.3 Certificate of Amendment to Restated Certificate
of Incorporation, as amended, dated April 30, 1992, filed as
Exhibit (3).2 to registrant's Form 10-K for the year 1992 (No.
0-15423), is incorporated herein by reference.

.4 Certificate of Merger dated September 30, 1993,
amending registrant's Restated Certificate of
Incorporation, as amended, filed as Exhibit (3).3 to registrant's
annual report on Form 10-K for the year 1993 (No. 0-15423), is
incorporated by reference.

(10) Material Contracts.

.1 Lease, entered into March 11, 1986 between Dauphin
65 Partners, Ltd. and The Bank of Mobile, N.A, filed as Exhibit
(10).3 to the registrant's annual report on Form 10-K for the
year 1986 (No. 0-15423), is incorporated herein by reference.

.2 Lease Renewal and Extension Agreement, dated March
18, 1992, between Dauphin 65 Partners, Ltd. and The Bank of
Mobile, filed as Exhibit (10).2 to the registrant's annual report
on Form 10-K for the year 1991 (No. 0-15423), is incorporated
herein by reference.

.3 Lease, entered into September 28, 1990 between Jay
P. Altmayer and AmSouth Bank, N.A. as co-trustees under the
will of Marvin C. Altmayer, deceased, and The Bank of Mobile,
N.A, filed as Exhibit (10).2 to the registrant's annual report on
Form 10-K for the year 1990 (No. 0-15423), is incorporated herein
by reference.

.4 Lease, entered into September 28, 1990 between Jay
P. Altmayer, individually, AmSouth Bank, N.A. as trustee under
the will of Claire A. Pollock, deceased, and Jay P. Altmayer and
AmSouth Bank, N.A., as co-trustees under the will of Marvin C.
Altmayer, deceased, filed as Exhibit (10).3 to the registrant's
annual report on Form 10-K for the year 1990 (No. 0-15423), is
incorporated herein by reference.

.5 Lease, entered into June 21, 1994 between
Staples-Pake Realty, Inc. and The Bank of Mobile, filed as
Exhibit (10).3 to the registrant's annual report on Form 10-K for
the year 1994 (No.0-15423), is incorporated herein by reference.

.6 Sublicense Agreement dated July 18, 1990, between
National Commerce Bancorporation and The Bank of Mobile,
N.A, filed as Exhibit (10).5 to the registrant's annual report
on Form 10-K for the year 1991 (No. 0-15423), is incorporated
herein by reference.

.7 Member Institution Agreement entered into July 25,
1986 between The Bank of Mobile, N.A and Alabama Network, Inc.,
filed as Exhibit (10).4 to the registrant's annual report
on Form 10-K for the year 1986 (No. 0-15423), is incorporated
herein by reference.

.8 *Stock Option Plan of Mobile National Corporation,
filed as Exhibit (10).3 to the registrant's annual report on Form
10-K for the year 1985 (No. 0-15423), is incorporated herein by
reference.

.9 *The Bank of Mobile Retirement Plan (Restated),
dated September 12, 1990, filed as Exhibit (10).8 to the
registrant's annual report on Form 10-K for the year 1991 (No.
0-15423), is incorporated herein by reference.

.10 *Contracts pursuant to Supplemental Retirement
Plan of The Bank of Mobile, N.A, effective January 1, 1988, filed
as Exhibit (10).7 to the registrant's annual report on Form 10-K
for the year 1990 (No. 0-15423), are incorporated herein by
reference.

.11 *Restated Contracts pursuant to Supplement
Retirement Plan of The Bank of Mobile, dated April 1, 1992, filed
as Exhibit (10).10 to registrant's Form 10-K for the year 1992
(No. 0-15423), is incorporated herein by reference.

.12 Agreement and Plan of Merger, dated as of March
16, 1993, between South Alabama Bancorporation, Inc. and Mobile
National Corporation, as amended and restated as of July
19, 1993, filed as Exhibit (10).12 to registrant's Registration
Statement on Form S-4 on July 2, 1993 (No. 33-65588), is
incorporated herein by reference.

.13 *First National Bank Employees' Profit Sharing
Plan, as amended and restated effective January 1, 1989, filed as
Exhibit (10).12 to registrant's annual report on Form 10-K for
the year 1993 (No. 0-15423), is incorporated by reference.

.14 *First National Bank Employees' Pension Plan, as
amended and restated effective January 1, 1989, filed as
Exhibit (10).13 to registrant's Form 10-K for the year 1993 (No.
0-15423), is incorporated herein by reference.

.15 Member Institution Agreement entered into February
16, 1988 between First National Bank and Alabama Network,
Inc., filed as Exhibit (10).14 to registrant's annual report on
Form 10-K for the year 1993 (No. 0-15423), is incorporated herein
by reference.

.16 *Split Dollar Insurance Agreements of First
National Bank, filed as Exhibit (10).15 to registrant's annual
report on Form 10-K for the year 1993 (No. 0-15423), is
incorporated herein by reference.

.17 *Deferred Compensation Agreements of First
National Bank, filed as Exhibit (10).16 to registrant's annual
report on Form 10-K for the year 1993 (No. 0-15423), is
incorporated herein by reference.

.18 *South Alabama Bancorporation 1993 Incentive
Compensation Plan dated October 19, 1993 as adopted by
shareholders May 3, 1994 is filed as Exhibit (10).18.

.19 Lease, entered into April 17, 1995 between
Augustine Meaher, Jr., Robert H. Meaher individually and Executor
of the Estate of R. Lloyd Hill, Joseph L. Meaher and Augustine
Meaher, III, and The Bank of Mobile, filed as Exhibit (10).1 to
registrant's Form 10-Q for the Quarter ended June 30, 1995 (No.
0-15423), is incorporated herein by reference.

.20 Lease, entered into April 17, 1995 between
Augustine Meaher, Jr. and Margaret L. Meaher, and The Bank of
Mobile, filed as Exhibit (10).2 to registrant's Form 10-Q for the
Quarter ended June 30, 1995 (No. 0-15423), is incorporated herein
by reference.

.21 Lease, entered into April 17, 1995 between
Hermione McMahon Sellers (f/k/a Hermione McMahon Dempsey) a
widow, William Michael Sellers, married, and Mary S. Burnett,
married, and The Bank of Mobile, filed as Exhibit (10).3 to
registrant's Form 10-Q for the Quarter ended June 30, 1995 (No.
0-15423), is incorporated herein by reference.

.22 Lease, entered into May 1, 1995 between Augustine
Meaher, Jr., Robert H. Meaher individually and Executor of the
Estate of R. Lloyd Hill, Joseph L. Meaher and Augustine Meaher,
III, and The Bank of Mobile, filed as Exhibit (10).4 to
registrant's Form 10-Q for the Quarter ended June 30, 1995 (No.
0-15423), is incorporated herein by reference.

.23 *Change in Control Compensation Agreement, dated
as of November 14, 1995, between The Bank of Mobile and W. Bibb
Lamar, Jr.

.24 *Change in control Compensation Agreement, dated
as of November 20, 1995, between First National Bank, Brewton and
J. Stephen Nelson.

.25 *Change in Control Compensation Agreements,
between The Bank of Mobile or First National Bank, Brewton and
certain officers.

(b) Reports on Form 8-K

No reports on Form 8-K were filed during the last quarter of
1995.

(13) Annual report to security holders.

.1 1995 Annual Report of South Alabama
Bancorporation, Inc. (Such annual report, except for those
portions expressly incorporated by reference, is furnished solely
for the information of the Commission and is not deemed to be
"filed" as part of this report.)

(21) Subsidiaries of the registrant.

.1 Subsidiaries of South Alabama Bancorporation,
Inc., filed as Exhibit (21).1 to registrant's annual report on
Form 10-K for the year 1993 (No. 0-15423) is incorporated
herein by reference.<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.

SOUTH ALABAMA BANCORPORATION, INC.

By: s/ F. Michael Johnson
F. Michael Johnson
Chief Financial Officer
and Secretary

Dated: March 25, 1996. 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.

Name Title Date

s/W. Bibb Lamar, Jr. Director, President and 03/22/96
W. Bibb Lamar, Jr. CEO (Principal
Executive Officer

s/F. Michael Johnson Chief Financial Officer 03/25/96
F. Michael Johnson and Secretary
Principal financial and
accounting officer

s/Stephen G. Crawford Director 03/19/96
Stephen G. Crawford

David C. De Laney Director

s/Lowell J. Friedman Director 03/22/96
Lowell J. Friedman

Broox G. Garrett, Jr. Director

s/James P. Hayes, Jr. Director 03/18/96
James P. Hayes, Jr.

Clifton C. Inge Director

s/Thomas E. McMillan, Jr. Director 03/18/96
Thomas E. McMillan, Jr.

s/J. Richard Miller, III Director 03/18/96
J. Richard Miller, III

s/J. Stephen Nelson Director and Chairman 03/18/96
J. Stephen Nelson

s/Earl H. Weaver Director 03/18/96
Earl H. Weaver

Commission File No. 0-15423

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

_______________

Annual Report Pursuant to Section 13 or 15 of the
Securities Exchange Act of 1934
for Fiscal Year Ended December 31, 1995

_______________

SOUTH ALABAMA BANCORPORATION, INC.

Financial Statement Schedules and Exhibits<PAGE>
(a) 2. Financial Statement Schedules

None.

(a) 3. Exhibits:

(2) Plan of acquisition, reorganization, arrangement,
liquidation or succession.

(3) Articles of Incorporation and By-Laws.

(4) Instruments defining the rights of security holders,
including indentures.

(10) Material Contracts.

.8 *Stock Option Plan of Mobile National Corporation,
filed as Exhibit (10).3 to the registrant's annual report on Form
10-K for the year 1985 (No. 0-15423), is incorporated herein by
reference.

.17 *Deferred Compensation Agreements of First
National Bank, filed as Exhibit (10).16 to registrant's annual
report on Form 10-K for the year 1993 (No. 0-15423), is
incorporated herein by reference.

.18 *South Alabama Bancorporation 1993 Incentive
Compensation Plan dated October 19, 1993 as adopted by
shareholders May 3, 1994 is filed as Exhibit (10).18.

.23 *Change in Control Compensation Agreement, dated
as of November 14, 1995, between The Bank of Mobile and W. Bibb
Lamar, Jr.

.24 *Change in control Compensation Agreement, dated
as of November 20, 1995, between First National Bank, Brewton and
J. Stephen Nelson.

.25 *Change in Control Compensation Agreements,
between The Bank of Mobile or First National Bank, Brewton and
certain officers.

(b) Reports on Form 8-K

No reports on Form 8-K were filed during the last quarter of
1995.

(13) Annual report to security holders.

(21) Subsidiaries of the registrant.

.1 Subsidiaries of South Alabama Bancorporation,
Inc., filed as Exhibit (21).1 to registrant's annual report on
Form 10-K for the year 1993 (No. 0-15423) is incorporated
herein by reference.<PAGE>

<ARTICLE> 9
<LEGEND>
This schedule contains summary financial information extracted from SEC form
10-K and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000783739
<NAME> SOUTH ALABAMA BANCORPORATION, INC.
<MULTIPLIER> 1000

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 15604
<INT-BEARING-DEPOSITS> 652
<FED-FUNDS-SOLD> 16800
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 40752
<INVESTMENTS-CARRYING> 21441
<INVESTMENTS-MARKET> 21664
<LOANS> 144025
<ALLOWANCE> 2222
<TOTAL-ASSETS> 244949
<DEPOSITS> 210092
<SHORT-TERM> 4050
<LIABILITIES-OTHER> 2010
<LONG-TERM> 0
<COMMON> 28239
0
0
<OTHER-SE> 558
<TOTAL-LIABILITIES-AND-EQUITY> 244949
<INTEREST-LOAN> 13579
<INTEREST-INVEST> 3998
<INTEREST-OTHER> 517
<INTEREST-TOTAL> 18094
<INTEREST-DEPOSIT> 7183
<INTEREST-EXPENSE> 7397
<INTEREST-INCOME-NET> 10697
<LOAN-LOSSES> 78
<SECURITIES-GAINS> 56
<EXPENSE-OTHER> 8446
<INCOME-PRETAX> 4417
<INCOME-PRE-EXTRAORDINARY> 3007
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3007
<EPS-PRIMARY> 1.00
<EPS-DILUTED> 1.00
<YIELD-ACTUAL> 5.05
<LOANS-NON> 490
<LOANS-PAST> 62
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 1100
<ALLOWANCE-OPEN> 2212
<CHARGE-OFFS> 148
<RECOVERIES> 80
<ALLOWANCE-CLOSE> 2222
<ALLOWANCE-DOMESTIC> 2222
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 1236

</TABLE>

South Alabama Bancorporation, Inc.
Post Office Box 3067
Mobile, Alabama 36652
Telephone 334/431-7800

F. MICHAEL JOHNSON
CHIEF FINANCIAL OFFICER
AND SECRETARY

To the Stockholders of
South Alabama Bancorporation, Inc.

NOTICE IS HEREBY GIVEN that, pursuant to call of its
Directors, the Annual Meeting of the Stockholders of South
Alabama Bancorporation, Inc. will be held at 100 St. Joseph
Street, Mobile, Alabama, on May 9, 1996, at 12:00 noon, C.D.T.,
for the purpose of considering and voting upon the
following matters:

1. Election of Directors. Election as directors of the
eleven nominees named in the enclosed Proxy Statement.

2. Other Business. Transaction of such other business as may
be brought before the meeting or any adjournment thereof.
Management currently knows of no other business to be presented.

Only those stockholders of record at the close of business
on March 22, 1996, shall be entitled to notice of and to vote at
the meeting.

We hope very much that you will attend the meeting, but,
whether you plan to attend or not, we would appreciate your
signing and returning the enclosed Proxy. Should you attend the
meeting in person, the Proxy can be revoked at your request.

Management sincerely appreciates your support and
cooperation, and we earnestly solicit your continued help during
1996.

By Order of the Board of Directors,

/s/ F. Michael Johnson
F. Michael Johnson
Chief Financial Officer
and Secretary

NOTICE: YOUR PROXY FORM AND RETURN ENVELOPE ARE INSIDE THIS
ENVELOPE.

SOUTH ALABAMA BANCORPORATION, INC.
100 St. Joseph Street, Mobile, Alabama 36602
PROXY STATEMENT
Annual Meeting, May 9, 1996, 12:00 Noon, C.D.T.

This Proxy Statement and the enclosed Proxy are being mailed
on April 4, 1996, to stockholders of South Alabama
Bancorporation, Inc. ("South Alabama") in connection with the
solicitation of proxies by the Board of Directors of South
Alabama for use at the Meeting of Stockholders on May 9, 1996,
and any adjournment thereof.

South Alabama is the parent company and owner of 100% of the
stock of The Bank of Mobile ("BOM"), headquartered in Mobile,
Alabama, and of First National Bank, Brewton ("FNBB"), located in
Brewton, Alabama. Prior to a merger in 1993 (the "Merger"), FNBB
was owned by a separate bank holding company.

VOTING SECURITIES

South Alabama's only class of stock outstanding is its
Common Stock, $.01 par. All stockholders of record at the close
of business March 22, 1996, will be entitled to vote their shares
on any matter brought before the meeting. The number of shares
of South Alabama Common Stock outstanding on March 22, 1996, was
3,001,562. Each share is entitled to one vote. Cumulative voting
is not permitted in the election of directors.

Security Ownership of Directors,
Nominees, 5% Stockholders and Officers

The only persons known to beneficially own more than 5% of
South Alabama's outstanding Common Stock are Thomas E. McMillan,
Jr., Paul D. Owens, Jr. and W. Dwight Harrigan. The tabulation
below reflects the number of shares beneficially owned by (i)
Thomas E. McMillan, Jr.; (ii) Paul D. Owens, Jr.; (iii) W. Dwight
Harrigan; (iv) each director and nominee of South Alabama; (v)
the executive officers named in the Summary Compensation Table;
and (vi) the directors and officers of South Alabama, as a group.
<TABLE>
<CAPTION>
Number of Shares and Nature of Beneficial
Ownership as of March 15, 1996(1)
Voting/Investment Power

Percentage
Name of Beneficial Owner or Group of Total
(and Address of 5% Stockholders) Sole Shared Aggregate Outstanding(2)

<S> <C> <C> <C> <C> <C> <C>
Thomas E. McMillan, Jr. (3) ..... 72,870(4) 206,306(5) 279,176 9.30%
(P.O. Box 809, Brewton, AL 36427)
Paul D. Owens, Jr. (3) .......... 47,395 160,587(6) 207,982 6.92
(P.O. Box 1229, Brewton, AL 36427)
W. Dwight Harrigan .......... 125,500 30,000(7) 155,500 5.18
(P.O. Box 38, Fulton, AL 36446)
Stephen G. Crawford .......... 49,744 19,200(8) 68,944 2.29
David C. De Laney .......... 10,000 18,200(9) 28,200 .93
Lowell J. Friedman .......... 73,533 2,000(10) 75,533 2.51
Broox G. Garrett, Jr. (11) ....... 4,361 54,020(12) 58,381 1.94
James P. Hayes, Jr. .......... 3,410 25,079(13) 28,489 .94
Clifton C. Inge .......... 25,300 25,300 .84
W. Bibb Lamar, Jr. .......... 21,250(14) 2,355(15) 23,605 .76
J. Richard Miller, III (16) ......111,942(17) 2,500(18) 114,442 3.81
J. Stephen Nelson .......... 9,281(19) 395(20) 9,676 .31
Earl H. Weaver (11) (16) ......... 39,614 42,565(21) 82,179 2.73
All directors and officers of
of South Alabama as a group
(18 persons).......... 479,191 373,120 852,311(22) 27.76%

</TABLE>
(1) The number of shares reflected are shares that, under
applicable regulations, are deemed to be beneficially owned. Shares deemed to be
beneficially owned, under those regulations, include shares as to which,
through any contract, relationship, arrangement,understanding, or otherwise,
either voting power or investment power is held or shared directly or
indirectly. Shares deemed to be beneficially owned also include shares which
may be acquired within sixty days. The total number of shares beneficially
owned is broken down, when applicable, into the following two categories: (i)
shares as to which voting power/investment power is held solely; and (ii)
shares as to which voting power/investment power is shared. The percentage
calculation is based on the aggregate number of shares beneficially owned.

(2) The percentage calculations for Mr. Lamar and Mr. Nelson
assume that all 28,692 shares subject to their exercisable outstanding
options at March 15, 1996, were outstanding. The percentage calculation for all
directors and officers of South Alabama, as a group, assumes that all 67,692
shares subject to exercisable outstanding options at March 15, 1996, were
outstanding.

(3) Mr. McMillan and Mr. Owens are brothers-in-law.

(4) Includes 29,600 shares owned by Thomas, Ltd., a limited
partnership. Mr. McMillan is managing general partner of the partnership.

(5) Includes 114,956 shares owned by McMillan, Ltd., a
limited partnership of which Mr. McMillan is a managing partner, and 72,036
shares and 19,314 shares owned by Mr. McMillan as co-trustee under the wills of
his mother and father, respectively.

(6) Includes 114,956 shares owned by McMillan, Ltd., a limited
partnership of which Mr. Owens is a managing partner, 17,700 shares owned as
trustee of his daughter's revocable management trust, 17,700 shares owned
jointly with his wife as trustees of a trust for another daughter's benefit,
4,176 shares owned jointly with his wife as joint tenants and 6,055 shares owned
by his wife.

(7) All such shares are owned by Mr. Harrigan's wife as trustee of
three separate trusts of which Mr. Harrigan's children are the beneficiaries.
Mr. Harrigan may be deemed to share voting and investment power with respect
to those shares.

(8) Includes 15,500 shares owned by the trustee of Mr. Crawford's
self-directed subaccount of his law firm's retirement plan. The figure also
includes the following shares as to which Mr. Crawford disclaims any actual
beneficial ownership: 3,000 shares owned by Mr. Crawford as trustee for his
two children; 500 shares owned by his wife; and 200 shares owned by his wife
as custodian for two children under the Uniform Transfers to Minors Act.

(9) All such shares are owned by Management Consultants, Ltd., an
Alabama limited partnership. The trustee of Mr. De Laney's employer's
retirement plan is sole limited partner of the partnership. Mr. De Laney
may be deemed to share voting and investment power with respect to those shares.

(10) Includes 2,000 shares owned by Mr. Friedman's wife, as to which
shares he may be deemed to sharevoting and investment power.

(11) Mr. Garrett and Mr. Weaver are first cousins.

(12) Includes 2,714 shares owned by Mr. Garrett as custodian
for two children under the Uniform Transfers to Minors Act, 44,822 shares as
trustee of the Broox G.Garrett Family Trust and 6,484 shares owned jointly
with his wife as joint tenants.

(13) All such shares are owned by Mr. Hayes as co-trustee for the
Elizabeth Brannon Hayes Marital Trust.

(14) Includes 21,000 shares subject to purchase within 60
days pursuant to options granted to Mr. Lamar, as to which he would have
sole voting and investment power.

(15) Includes 1,460 shares owned by the trustee of Mr. Lamar's
self-directed IRA account. The figure also includes 650 shares owned by
Mr. Lamar as custodian under the Uniform Transfers to Minors Act and 145
shares owned by his wife through her self-directed IRA account.

(16) Mr. Miller is Mr. Weaver's wife's first cousin.

(17) Includes 111,452 shares owned by Miller Investments, a
general partnership. Mr. Miller is Managing Partner of the partnership.

(18) All such shares are owned by Mr. Miller as trustee of
two separate trusts of which Mr. Miller's children are the beneficiaries.

(19) Includes 7,692 shares subject to purchase within 60 days pursuant
to options granted to Mr. Nelson,as to which he would have sole voting and
investment power.

(20) All such shares are owned by Mr. Nelson's wife.

(21) Includes 27,698 shares owned by Mr. Weaver's wife as to
which Mr. Weaver disclaims any actual beneficial ownership and 14,867
shares owned jointly with his wife as tenants in common.

(22) Includes 67,692 shares subject to purchase within 60 days pursuant
to options granted to officers of South Alabama, as to which they would have
sole voting and investment power.

Director and Officer Securities Reports

Section 16(a) of the Securities Exchange Act of 1934
requires that South Alabama's directors and executive officers, and persons
who own more than ten percent of South Alabama's common stock, file with the
Securities and Exchange Commission reports relating to their ownership and
changes in ownership of common stock and other equity securities of South
Alabama. Management believes, based solely upon information furnished to
South Alabama and written representations that no other reports were
required, thatall persons subject to the reporting requirements of Section
16(a) during 1995 filed the reports on a timely basis.

ELECTION OF DIRECTORS

Number and Term

The By-Laws of South Alabama provide that the number of
directors to be elected at the Annual Meeting will be fixed by resolution of
the Board of Directors. The Board has adopted a resolution fixing at eleven the
number of directors to be elected at the 1996 Annual Meeting. The directors
so elected will serve a term of one year.

Nominees

The persons named below are the Board's nominees for
election as directors, and each has agreed to serve
if elected. All nominees are members of the present South Alabama
Board of Directors.

Stephen G. Crawford

A South Alabama director since 1985

Mr. Crawford, age 56, a member of the law firm Hand
Arendall, L.L.C., Mobile, Alabama, has practiced law since
1964. Mr. Crawford has been a director of BOM since 1986.

David C. De Laney

A South Alabama director since 1985

Mr. De Laney, age 48, is President of First Small Business
Investment Company of Alabama, Mobile, Alabama, a
position he has held since 1978. Mr. De Laney has been a
director of BOM since 1986.

Lowell J. Friedman

A South Alabama director since 1986

Mr. Friedman, age 66, has been President of Creola
Investment Corporation, Mobile, Alabama, a land and
timber holding company, since 1975. Mr. Friedman also
directs personal investments in real estate and oil and gas
properties. Mr. Friedman has been a director of BOM since
1986.

Broox G. Garrett, Jr.

A South Alabama director since 1993

Mr. Garrett, age 47, is an attorney and partner in the law
firm of Thompson, Garrett and Hines, Brewton, Alabama
where he has been employed since 1973. Mr. Garrett has
been a director of FNBB since 1983, and was a director of
FNBB's holding company from 1986 until the Merger.

James P. Hayes, Jr.

A South Alabama director since 1993

Mr. Hayes, age 48, is a financial consultant and has served
as President of J. P. Hayes & Company, Inc. since 1985. Mr.
Hayes has served since 1985 as a director of FNBB and was
a director of FNBB's holding company from 1986 until the
Merger.

Clifton C. Inge

A South Alabama director since 1985

Mr. Inge, age 58, has been Chairman of the Board since
1991 of Willis Corroon Corporation of Mobile, Mobile,
Alabama (formerly W.K.P. Wilson & Son, Inc.), a
subsidiary of Willis Corroon Group PLC, insurance
brokers. Mr. Inge was previously President (1975-1991) of
W.K.P. Wilson & Son, Inc. Mr. Inge has been a director of
BOM since 1986.

W. Bibb Lamar, Jr.

A South Alabama director since 1989

Mr. Lamar, age 52, has been President, CEO and director of
South Alabama, and BOM since December 1989. Mr.
Lamar served as Executive Vice President and Senior Loan
Officer of BOM from January 1989 to December 1989.
Prior to 1989 Mr. Lamar was Senior Vice President
(1984-1989) of the Commercial Loan Department of First
Alabama Bank/Mobile (formerly Merchants National
Bank).

Thomas E. McMillan, Jr.

A South Alabama director since 1985

Mr. McMillan, age 47, has been President of the general
partner of Smackco, Ltd., Brewton, Alabama, a limited
partnership engaged in oil and gas development, since 1974.
Mr. McMillan has been a director of FNBB since 1977, a
director of BOM since 1986 and was a director of FNBB's
holding company from 1986 until the Merger.

J. Richard Miller, III

A South Alabama director since 1991

Mr. Miller, age 49, has been managing partner since January
1992 of Miller Investments, and from 1989 through 1991 was
managing partner of its predecessor entities, Miller, Ltd. and
Jern, Ltd., all of which are Brewton, Alabama partnerships
engaged in private investments.
Mr. Miller was previously Vice President (1980-1989) of T.R. Miller
Mill Company, a Brewton, Alabama forest products company. Mr. Miller has
been a director of FNBB since 1990, a director of BOM since
1991, and was a director of FNBB's holding company from
1990 until the Merger.

J. Stephen Nelson

A South Alabama director since 1993

Mr. Nelson, age 58, has been Chairman since 1993 of South
Alabama and Chairman, since 1993, Chief Executive Officer,
since 1984, and director, since 1979, of FNBB. From 1986
until the Merger, Mr. Nelson was also President and a director
of FNBB's holding company.

Earl H. Weaver

A South Alabama director since 1993

Mr. Weaver, age 57, has been the sole proprietor of Earl H.
Weaver Management Services, a timber, oil, gas and general
management concern, since 1979. Mr. Weaver has served since
1981 as a director of FNBB and was a director of FNBB's
holding company from 1986 until the Merger.

Although the Board of Directors does not contemplate that
any nominee named on pages 4 or 5 will be
unavailable for election, if vacancies occur unexpectedly, the
shares covered by the Proxy will be voted for the
Board's substitute nominees, if any, or in such other manner as
the Board of Directors deems advisable.

The By-Laws of South Alabama permit the Board of Directors,
between annual meetings of stockholders, to increase the membership of the
Board and to fill any position so created and any vacancy
otherwise occurring. Any new director so elected holds office
until the next annual stockholders' meeting.

DIRECTOR COMMITTEES AND ATTENDANCE

The South Alabama Board of Directors held four meetings
during 1995. The Board has the following standing committees: Executive,
Audit and Personnel/Compensation.
The Executive Committee (whose members presently are Messrs. Crawford,
Friedman, Lamar, McMillan, Miller, Nelson and Weaver) between meetings of
the Board may exercise all powers of the Board except as limited by the
By-Laws. Actions taken by the Executive Committee are subject to ratification
by the Board atits next regular meeting. The committee had no meetings in 1995.
The Audit Committee (whose members presently are Messrs. De Laney,
Friedman and Garrett) reviews the scope and plan of internal and external
audits, audit results, the adequacy of internal accounting controls and makes
recommendations to the Board on the appointment of outside accountants.
The committee held three meetings in 1995.
The Personnel/Compensation Committee (whose members presently are
Messrs. Crawford, Hayes, Inge and McMillan) sets compensation for each of the
Chairman and the Chief Executive Officer of South Alabama and reviews
guidelines within which the subsidiary bank boards of directors fix
compensation. The committee held three meetings in 1995.
During 1995, no director attended fewer than 75% of the
total number of meetings of the Board of Directors of South Alabama and
meetings of committees of which they were members.
Both BOM and FNBB have standing committees of Executive,
Finance, Audit, Trust, Personnel and Directors on Directors, composed of
directors from their respective Boards.

EXECUTIVE COMPENSATION

Five Year Total Stockholder Return Comparison

The following indexed graph compares South Alabama's
five-year cummulative total stockholder return with the NASDAQ Market Index
and with a published peer group industry index, prepared by Media General
Financial Services, comprised of bank holding companies in the east south
central section of the United States. The comparison assumes the investment
of $100 on January 1, 1991, with dividends reinvested quarterly through
December 31, 1995. Returns of each component issuer have been weighted
according to that issuer's market capitalization.

[Graph]
<TABLE>
1990 1991 1992 1993 1994 1995
<S> <C> <C> <C> <C> <C> <C>
SOUTH ALABAMA BANCORPORATION $100 $115.79 $189.47 $261.49 $277.54 $312.08
MGFS EAST SOUTH CENTRAL BANKS $100 $163.59 $169.68 $179.35 $180.09 $241.99
NASDAQ MARKET INDEX $100 $128.38 $129.64 $155.50 $163.26 $211.77

</TABLE>
Report of Personnel/Compensation Committee of the Board Of Directors

General Policies

The Personnel/Compensation Committee of the Board of Directors of South
Alabama (the "Committee") has responsibility for recommending to the Board the
compensation of the Chairman and the Chief Executive Officer of South
Alabama. Additionally, the Committee has oversight responsibility with
respect to the compensation of all other officers of the South Alabama
subsidiaries whose salaries exceed $50,000 annually or who are executive
officers of the subsidiaries. Other than the Chairman and the Chief Executive
Officer, all other salaries are set at the subsidiary level.

The overall objectives of South Alabama's compensation
program are to attract and retain the best possible banking talent, to
motivate its officers to achieve the goals established in the business
strategy, to recognize both individual contributions and overall business
results and to link shareholder and executive interests through long term
equity-based plans.
Base Salary. Executive officer salaries are reviewed annually.
Individual salaries are set only after consideration by the subsidiary
personnel committees of the officer's level of responsibility, experience and
individual performance, and review of external competitive practices. In
order to determine external competitive practices, the personnel committees
review, and expect to continue to review, salary surveys conducted by
independent compensation consulting firms. In establishing the base salaries
for South Alabama's executive officers, the personnel committees consider
the results of such surveys, but may establish the base salary for executives
above or below the averages indicated in those surveys. The amounts paid to the
Chairman and the Chief Executive Officer of South Alabama in 1995 are shown
in the Summary Compensation Table under the heading "Annual
Compensation-Salary."

BOM Incentive Plan. The BOM Incentive Plan for 1995 was designed to
reward officers for achieving and exceeding current year net income goals of
BOM and individual goals established for certain officers. Upon completion of
the business plan for 1995, the BOM Chief Executive Officer presented to
BOM's personnel committee the net income goal of BOM for its approval. The
incentive opportunity for each individual officer was dependent upon that
officer's level of responsibility and the judgment of the BOM personnel
committee of that officer's potential contribution to BOM's ability to achieve
its net income goal. The net income goal of BOM was exceeded, and awards were
made by the personnel committee after consideration of individual
performance within the parameters of the Incentive Plan. The amount awarded
to the Chief Executive Officer of South Alabama under the BOM Incentive Plan
for 1995 is set forth in the "Annual Compensation-Salary" column of the
Summary Compensation Table.

FNBB Incentive Compensation Plan. Each year FNBB establishes a pool of
funds equal to 15% of total officers' salaries. Based upon the performance of
FNBB, the department and the individual, an officer can earn up to 15% of his
or her base salary, payable in a lump sum after the close of the year. For
each officer other than the top three executives of FNBB, the formula is
based 40% on FNBB's achieving required levels of return on assets, 40% on
achievement of individual and departmental goals as established at the
beginning of the year, and 20% on the results of the officers' annual review
as conducted by his or her supervisor. Each of the three most highly ranked
officers automatically receives the same percentage of his total available
amount as the average for all other officers. In 1995 approximately 95% of
the pool was distributed. The amount awarded to the Chairman of
South Alabama under the FNBB Incentive Compensation Plan for 1995 is set
forth in the "Annual Compensation-Salary" column of the Summary
Compensation Table.

Stock Options. Stock options are South Alabama's and its subsidiaries'
principal long-term incentive vehicle. The committee believes that stock
options not only motivate and reward executives for exceptional performance,
but also join their goals more closely with those of the South Alabama
stockholders, by affording the recipients the possibility of significant
equity interests in South Alabama. The stock option plan is designed
to encourage a long-term perspective by providing a ten-year term, which
includes a nine-year exercise period and a one-year period after the date of
grant during which the option cannot be exercised.

The number of options awarded to each officer generally is tied to the
officer's level of responsibility, with the result that senior executive
officers typically receive greater awards than other officers. The Committee
takes into consideration previous grants to an individual officer as well as
all other factors.

The shares of the Common Stock covered by options awarded during 1995
to the Chairman and the Chief Executive Officer of South Alabama are shown in
the table entitled "Option Grants in Last Fiscal Year," and the options
previously granted and outstanding at year-end are shown in the table
entitled "Aggregate Option Exercises in Last Fiscal Year and Fiscal Year-End
Option Values."

Other Compensation. Additionally, BOM and FNBB both maintain
broad-based employee benefit plans, including a pension plan and, in the case
of FNBB, a profit sharing plan, as described below. Officers of South Alabama
participate in such plans on the same basis as other employees.

Chief Executive Compensation

The Committee meets in executive sessions to review the Chief Executive
Officer's salary and also consults with salary administration firms and/or
uses compensation surveys with respect to competitors' practices.
Compensation of the Chief Executive Officer is determined in accordance with
the same basic factors as described above for other executive officers.

The 1995 base salary increase for the Chief Executive Officer was
established after a review of market data from independent compensation
surveys, including the salary analysis provided by its consultant. The
Committee is empowered to recommend to the Board the Chief Executive
Officer's base salary in its discretion and without regard to particular
factors. The Committee considered, however, that 1994 corporate earnings
objectives had been exceeded. The Committee also considered the achievement
of certain other strategic objectives, both financial and otherwise, under
his leadership, including improved asset quality, capital ratios, liquidity
ratios, interest rate margins and other financial goals under the business
plan for 1994.

The 1995 annual incentive target for the Chief Executive Officer for
achieving the net income goal of BOM was $25,000, an amount equal to
approximately 22% of his 1995 salary. In view of the continued improvement in
the financial performance of South Alabama during the year and of the
successful completion of non-financial goals, the Chief Executive Officer was
awarded a total incentive of $27,500, an increase of $2,500 above his
original incentive target.

The Committee also granted to the Chief Executive Officer options to
purchase 5,000 shares of South Alabama Common Stock, as described in the
table entitled "Option Grants in Last Fiscal Year."

Policy Regarding $1 Million Deduction Limit

The Personnel Committee expects South Alabama to comply with
the $1 million federal income tax limit on executive pay.

The members of the Personnel/Compensation Committee are as
follows: Stephen G. Crawford, James P. Hayes, Jr., Clifton C. Inge
and Thomas E. McMillan, Jr.

Compensation

The table below reflects annual compensation for J. Stephen
Nelson and W. Bibb Lamar, Jr. for services rendered in 1995, 1994 and 1993
to South Alabama, BOM and FNBB.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long Term Compensation
Awards
Shares Underlying All Other
Annual Compensation((1)) Options/SARs(#) Compensation($)(4)
Name and Principal Position Year Salary($)((2)) Bonus($)((3)) Options/SARs(#) Compensation($)(4)
<S> <C> <C> <C> <C> <C>
J. Stephen Nelson 1995 $99,126 $13,799 5,000 $7,032
Chairman and Director, 1994 $92,283 $12,519 7,692 $6,806
South Alabama and Chairman, 1993 $88,525 $11,464 7,690 $5,625
CEO and Director, FNBB

W. Bibb Lamar, Jr. 1995 $115,000 $27,500 5,000
President, CEO and Director, 1994 $105,000 $25,000 6,000
South Alabama and BOM 1993 $195,000 $15,000 7,500
</TABLE>
((1))Although Mr. Nelson and Mr. Lamar received perquisites and
other personal benefits in the years shown, the value of these
benefits did not exceed in the aggregate the lesser of $50,000 or
10% of their salary and bonus in any year.
((2))Includes for Mr. Nelson both salary and $3,600 in director's
fees paid at FNBB for each year shown.
((3))Represents amounts paid under the FNBB Incentive
Compensation Plan for Mr. Nelson and the BOM Incentive Plan for
Mr.
Lamar.
((4))Represents employer contributions to the FNBB Profit Sharing
Plan.

Stock Options

The following table sets forth the grant of stock options
during 1995 to Mr. Nelson and Mr. Lamar:
<TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
<CAPTION>
Potential
Number of % of Total Realizable Value
Shares Options/SARs Assuming Rates of
Underlying Granted to Exercise Stock Price
Options/SARs Employees or Base Expiration Appreciation
Name Granted in Fiscal Year Price ($/Sh) Date 5% 10%
<S> <C> <C> <C> <C> <C> <C>
J. Stephen Nelson 5,000(2) 12.98% $13.00 05/04/05 $46,172 $120,452
W. Bibb Lamar, Jr. 5,000(2) 12.98% $13.00 05/04/05 $46,172 $120,452
</TABLE>
(1) Calculated by comparing the exercise price of such options and the market
value of the shares of common stock subject to such options, assuming the market
price of such shares increase by 5% and 10%, respectively, over the term of
the options.
(2)Incentive Stock Options which become exercisable on May 4, 1996.

The following table includes information with respect to
unexercised options held by Mr. Nelson and Mr. Lamar.
<TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL
YEAR-END OPTION VALUES
<CAPTION>
Number of Shares Underlying Value of Unexercised
Unexercised Options/SARs Held At In-the-Money Options/SARs At
December 31, 1995 ((#)) December 31, 1995 ($) ((1))
Name Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C>
J. Stephen Nelson 7,692 5,000 $ 3,846 $2,500
W. Bibb Lamar, Jr. 5,000 7,500 $25,000 $4,687
10,000 5,000 $78,750 $2,500
6,000 $ 3,000
</TABLE>
((1))Based on the average of the closing bid and ask prices
quoted in the NASDAQ inter-dealer system on December 31,
1995, minus the exercise price.

Pension Plans

South Alabama maintains a pension plan and certain other
long-term compensation plans, as described below.

The following table reflects estimated annual benefits
payable under the Retirement Plan for Employees of South Alabama
(The "SAB Plan") in effect as of December 31, 1995 at various salary and
years of service levels, assuming retirement at age 65.
<TABLE>
PENSION PLAN TABLE
<CAPTION>
Compensation Years of Credited Service
10 15 20 25 30 35
<C> <C> <C> <C> <C> <C> <C>
$ 25,000 $ 2,500 $ 3,750 $ 5,000 $ 6,250 $ 7,500 $ 8,750
50,000 5,000 7,500 10,000 12,500 15,000 17,500
75,000 7,500 11,250 15,000 18,750 22,500 26,250
100,000 10,000 15,000 20,000 25,000 30,000 35,000
125,000 12,500 18,750 25,000 31,250 37,500 43,750
150,000 15,000 22,500 30,000 37,500 45,000 52,500
175,000* 15,000 22,500 30,000 37,500 45,000 52,500

</TABLE>
*Maximum Compensation for 1995 under IRC 401(a)(17) is $150,000.

The amounts reflected are single life benefits computed
under the SAB Plan's basic formula. The SAB Plan provides generally for a
monthly benefit commencing at age 65 equal to 1% of the employee's average
monthly base compensation during the highest 5 consecutive calendar years out
of the 10 calendar years preceding retirement, multiplied by years of
credited service, not to exceed 40 years. Alternative plan formulas which may
apply to certain participants who participated in predecessor pension plans,
might produce a greater benefit in some situations. Joint and survivor benefits
would be less. Social Security benefits do not affect payments made under the
SAB Plan. As of December 31, 1995, Mr. Lamar was credited with seven years of
service, and Mr. Nelson was credited with sixteen years of service.

In addition, BOM maintains an unfunded and unsecured Supplemental
Retirement Plan (the "Supplemental Plan") designed to supplement the benefits
payable under the BOM Plan for certain key employees selected by BOM's Board
of Directors. Each participant was a participant in a pension plan of another
bank prior to his employment by BOM and the Supplemental Plan is designed to
afford the participant the same pension he would receive under the BOM Plan if
he were given years-of-service credit as if he were employed by BOM his
entire banking career, reduced by benefits actually payable to him under the
BOM Plan and any retirement benefit payable to him under any such plan of
another bank. Benefits for total and permanent disability are supplemented in
the same manner.

Because the Supplemental Plan is intended to complement benefits
otherwise available to the paticipants, the exact amounts to be paid, if any,
to any participant, including Mr. Lamar, cannot be determined until
retirement or disability. BOM management does not believe any current expense
and any liabilities associated with the Supplemental Plan are material.

FNBB maintains the First National Bank Employees' Profit Sharing Plan
(the "FNBB Profit Sharing Plan"). Subject to certain employment and vesting
requirements, all FNBB employees are permitted to participate in the FNBB
Profit Sharing Plan, which provides for employee contributions up to a
maximum of $1,800 (limited in the case of certain "highly compensated
employees" to the extent required by law), matched by an employer contribution,
up to the lowest of (i) 10% of FNBB's net operating earnings, (ii) four times
the amount of all employee contributions for the year, or (iii) the maximum
amount deductible by FNBB for federal income tax purposes. The FNBB
contribution, which is discretionary within limits set forth above, is
divided among the employees' accounts in proportion to the employees' own
contributions.

Change in Control Compensation Agreements

FNBB entered into a Change of Conrol Compensation Agreement with Mr. Nelson
on November 20, 1995. BOM entered into a Change in Control Agreement with Mr.
Lamar on November 14, 1995. These Change in Control Agreements (the
"Agreements") provide that if Mr. Nelson or Mr. Lamar is terminated other than
"for cause" (as defined), following a change in control, or if his assigned
duties or responsibilities are changed such that they are inconsistent with his
present position, he shall be entitled to receive a cash payment equal to three
times his annual average earnings (as defined). Certain other existing employee
benefits may also be available to Mr. Nelson and Mr. Lamar under terms of these
Agreements for a period of one year. These Agreements automatically renew each
calendar year unless terminated by FNBB or BOM at least 90 days prior to any
December 31.

Compensation of Directors

South Alabama directors who are not officers are paid $300 for each
Board meeting attended and $100 for each committee meeting attended.

CERTAIN TRANSACTIONS AND MATTERS

Some of the directors, executive officers, and nominees for election as
directors of South Alabama, as well as firms and companies with which they
are associated, are and have been customers of its subsidiaries, BOM and
FNBB, and as such have had banking transactions, including loans and
commitments to loan, with the subsidiary banks during 1995. These loans and
commitments to loan, including loans and commitments outstanding at any time
during the period, were made in the ordinary course of business on
substantially the same terms, including rates and collateral, as those
prevailing at the time for comparable transactions with other persons and, in
the opinion of subsidiary bank management, did not involve more than the normal
risk of collectibility or present other unfavorable factors.

Stephen G. Crawford, a director and nominee, is a member of the law firm
of Hand Arendall, L.L.C., which serves as counsel for South Alabama and BOM.
Broox G.Garrett, Jr., a director and nominee, is a partner in the law firm of
Thompson, Garrett and Hines, which serves as counsel for FNBB.

APPOINTMENT OF AUDITORS

The Board of Directors of South Alabama, on recommendation
of the Audit committee, has engaged Arthur Andersen L.L.P. as South Alabama's
independent accountant and auditor for the three year period beginning in 1995.
The engagement was entered into on September 27, 1995. Deloitte & Touche
served as South Alabama's independent accountant and auditor for the years
ending December 31, 1990 through 1994. Arthur Andersen will have
representatives present at the annual meeting to respond to appropriate
questions and to make a statement if they so desire.

OTHER MATTERS

Management currently does not know of any other matters to
be presented at the meeting.

If a Proxy in the form enclosed is executed properly and is returned,
the shares represented thereby will be voted in accordance with the
directions given in that Proxy. If no specific directions are given, the
shares will be voted, subject to and in accordance with the provisions herein
contained, "For" the Board of Directors' nominees in the election of
directors. If any other matter is presented at the meeting, the shares will
be voted in accordance with the recommendations of the Board of Directors. At
any time prior to its exercise, a Proxy may be revoked by written notice or
a subsequently dated Proxy delivered to the Secretary of South Alabama.

Solicitation of proxies will be made initially by mail. In addition,
proxies may be solicited in person, by telephone, and by telegraph by
directors, officers, and other employees of South Alabama and its subsidiary
banks. The cost of printing, assembling, and mailing this Proxy Statement and
related material furnished to stockholders and all other expenses of
solicitation, including the expenses of brokers, custodians, nominees, and
other fiduciaries who, at the request of South Alabama, mail material to or
otherwise communicate with beneficial owners of shares held by them, will be
borne by South Alabama.

The presence, in person or by proxy, of a majority of the outstanding
shares of Common Stock is necessary to constitute a quorum of the
stockholders to take action at the meeting. Once a quorum is established, (i)
directors must be elected by a plurality of the shares of Common Stock
present, in person or by proxy, and (ii) any other action to be taken must be
approved by a majority of the shares of Common Stock present, in person or by
proxy. For voting purposes, abstentions and broker non-votes will in effect
count as "no" votes.

Stockholder proposals intended to be submitted for consideration at the
1997 Annual Meeting of the Stockholders of South Alabama must be submitted in
writing to and received by the Secretary of South Alabama not later than
December 6, 1996, to be included in South Alabama's Proxy Statement and form
of Proxy relating to that meeting.

/s/F. Michael Johnson
F. Michael Johnson
Chief Financial Officer
and Secretary

Enclosures
April 4, 1996

South Alabama Bancorporation
The Bank of Mobile
The Perfect Fit
The First National Bank, Brewton
Annual 1995 Report
Index
2 Consolidated Financial Highlights
3 Letter to Shareholders
4 Directors and Officers
Financial Highlights
8 Management's Discussion and Analysis of Financial Condition
and Results of Operations
23 Selected Quarterly Financial Data
24 Selected Financial Data
26 Management's Report on Financial Statements and Independent
Auditors' Report
Financial Statements
27 Consolidated Statements of Condition
28 Consolidated Statements of Income
29 Consolidated Statements of Changes in Shareholders' Equity
30 Consolidated Statements of Cash Flows
31 Notes to Consolidated Financial Statements

South Alabama Bancorporation operates as a bank holding company
headquartered in Mobile, Alabama. Its subsidiaries are The Bank
of Mobile and First National Bank, Brewton.

The annual meeting of shareholders will be held May 9, 1996, at
12:00 noon C.D.T., at The Bank of Mobile, 100 St. Joseph Street,
Mobile, Alabama 36602.

The Annual Report to the Securities and Exchange Commission (Form
10-K) is available upon request to: South Alabama Bancorporation,
100 Saint Joseph Street, Mobile, Alabama 36602, (334) 431-7800.

South Alabama's common stock is traded on NASDAQ under the symbol
SABC. NASDAQ Market Makers are: Morgan, Keegan & Company, The
Robinson-Humphrey Co., Inc., and Sterne Agee & Leach, Inc.
Transfer Agent: Trust Department, The Bank of Mobile, Post Office
Box 3067, Mobile, Alabama 36652, (334) 431-7835.

This Annual Report reflects the consolidated financial position
and results of operations of the company, with all significant
intercompany transactions eliminated.

[Stacked bar graph showing cumulative effect of change in
accounting for income taxes and extraordinary items and net
income before cumulative effect of change in accounting for
income taxes and extraordinary items for the years 1991, 1993,
1993, 1994 and 1995.]
<TABLE>
Consolidated Financial Highlights
(Dollars in Thousands Except Per Share Amounts)
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1995 1994 Change
<S> <C> <C> <C>
Net income $3,007 $2,782 +8.1%
Per common share 1.00 .93 +7.5%
Cash dividends per share .32 .26 +23.1%

AT DECEMBER 31, 1995 1994 Change
Total assets $244,949 $218,506 +12.1%
Total deposits 210,092 185,842 +13.0%
Total loans 144,147 133,821 + 7.7%
Total investment securities 62,193 63,017 - 1.3%
Shareholders' equity 28,797 26,104 +10.3%
Per common share 9.59 8.70 +10.2%
Common shares outstanding (000's) 3,002 2,999
</TABLE>

Dear Shareholder:

We are pleased to report a most successful year for South Alabama
Bancorporation. Net income of $3.007 million for 1995 was 8%
higher than 1994. Core earnings were at an all time high. We
experienced good internal growth with deposits, assets and
capital all increasing in excess of 10%. Loan volume grew by
over $10 million, or 7.7%.

Our total 1995 dividend of $0.32 per share was an increase of
23.1% over the $0.26 per share paid in 1994. The dividend for
the first quarter of 1996 has been increased to $0.10 per share
which reflects a 25% increase over the same quarter last year.
This marks the third consecutive year we have increased
dividends.

We continue to possess strong capital, with our leverage ratio
(shareholder's equity divided by average assets) at 11.79% on
December 31, 1995. This capital base will assist us in providing
more technology, additional services and expansion.

Our two sister banks, First National Bank, Brewton and The Bank
of Mobile have enjoyed outstanding years. Each bank is comprised
of hardworking, dedicated employees and we thank them for helping
us achieve a very successful 1995. Our banks have truly
complemented each other, which was our objective in forming South
Alabama Bancorporation in 1993.

Looking into the future, we have plans to locate branches in
neighboring Baldwin county. Our mission is to build a strong and
dynamic, locally-based financial institution in South Alabama,
and we feel Baldwin County will augment this process.

The Bank of Mobile has just completed relocation of its main
office to 100 St. Joseph Street. The restoration of this
landmark building in downtown Mobile further signifies our
commitment to South Alabama. This spacious facility will allow
us to offer more convenience and better service to our customers.

We are excited about our future and we are grateful for your
support. Your comments and suggestions are always welcome.

Sincerely,

/s/J. Stephen Nelson /s/W. Bibb Lamar, Jr.
J. Stephen Nelson W. Bibb Lamar, Jr.
Chairman of the Board President and Chief
Executive Officer

page 3

First National Bank, Brewton
Directors
W. Gaillard Bixler
Dan Britton
John David Finlay, Jr.
Broox G. Garrett, Jr.
Billy Joe Griffin
James P. Hayes, Jr.
Jack W. Hines, Jr.
Thomas E. McMillan, Jr.
J. Richard Miller, III
J. Stephen Nelson
Earl H. Weaver

Directors Emeritus
Bryars Byrd
Randolph M. McDowell
John R. Miller, Jr.
Lee M. Otts
Clarence L. Turnipseed

Officers
J. Stephen Nelson
Chairman and Chief Executive Officer
W. Gaillard Bixler
President and Chief Operating Officer
Dan Britton
Executive Vice President, Trust
Raymond F. Lynn, Jr.
Sr. Vice President and Trust Officer
James L. Stark
Sr. Vice President
Elaine Catoe
Vice President and Trust Officer
R. Jerry Jackson
Vice President
Cindy W. Madden
Vice President
Daniel C. Thomas
Vice President
Mary M. Thompson
Vice President and Secretary to the Board
Hilda Baggett
Assistant Vice President
Joyce Baker
Trust Officer
Doris B. Morris
Assistant Vice President
Janis B. Norman
Assistant Vice President
James William Luker, Jr.
Auditor
D. Wade Anthony
Loan Officer
Charlene B. Godwin
Compliance Officer
Carrie L. King
Operations Officer
Alexis A. Maloy
Assistant Trust Officer
Sandra B. Neeley
Branch Manager
Debbie C. Hardee
Branch Manager
Deborah W. Roberson
Accounting Officer
Ann H. Coale
Credit Administration Officer

Directors
Stephen G. Crawford
Member, Hand Arendall, L.L.C., Attorneys
David C. De Laney
President, First Small Business Investment Company of Alabama
Lowell J. Friedman
President, Creola Investment Corporation
Broox G. Garrett, Jr.
Partner, Thompson, Garrett & Hines, Attorneys
James P. Hayes, Jr.
President, J.P. Hayes & Co., Inc.
Clifton C. Inge
Chairman, Willis Corroon Corporation of Mobile
W. Bibb Lamar, Jr.
President and CEO, South Alabama Bancorporation, Inc. and
President and CEO, The Bank of Mobile
Thomas E. McMillan, Jr.
President of General Partner, Smackco, Ltd.
J. Richard Miller, III
Managing Partner, Miller Investments
J. Stephen Nelson
Chairman, South Alabama Bancorporation, Inc. and Chairman and
CEO, First National Bank, Brewton
Earl H. Weaver
Earl H. Weaver Management Services
Officers
J. Stephen Nelson
Chairman, South Alabama Bancorporation, Inc. and Chairman and
CEO, First National Bank, Brewton
W. Bibb Lamar, Jr.
President and CEO, South Alabama Bancorporation, Inc. and
President and CEO, The Bank of Mobile
W. Gaillard Bixler
Executive Vice President and Chief Operating Officer
F. Michael Johnson
Chief Financial Officer and Secretary

The Bank Of Mobile
Directors
Stephen G. Crawford
David C. De Laney
Ann W. Delchamps
Lowell J. Friedman
W. Dwight Harrigan
James M. Harrison, Jr.
Walter L. Hovell
Clifton C. Inge
Kenneth S. Johnson
W. Bibb Lamar, Jr.
Thomas W. Leavell
John H. Lewis, Jr.
J. Richard Miller, III
Harris V. Morrissette
Paul D. Owens, Jr.
Charles L. Rutherford, Jr.
Directors Emeritus
T. Massey Bedsole
J. Robert Boykin, Sr.
William J. Hearin, Jr.
Joseph N. Langan
Dwain G. Luce
John R. Miller, Jr.
James L. Murray
Robert H. Radcliff, Jr.
B.R. Wilson, Jr.

Officers
W. Bibb Lamar, Jr.
President and Chief Executive Officer
Percy C. Fountain, Jr.
Executive Vice President
H. Harrell Galloway
Executive Vice President and Trust Officer
F. Michael Johnson
Executive Vice President
Bruce C. Finley, Jr.
Senior Vice President and Senior Loan Officer
Kay I. McKee
Senior Vice President and Trust Officer
Ray H. Miller, III
Senior Vice President
Melvin R. Coxwell
Baldwin County Executive
James G. Beck
Vice President and Trust Officer
L. Russell Brandau, Jr.
Vice President
Harry D. Henson
Vice President
Joy W. Lyons
Vice President and Credit Administration Officer
Robert S. Murray, Jr.
Vice President
Karen P. Sullivan
Vice President and Branch Manager
Pamela S. Watson
Vice President
Cathy S. Rayford
Assistant Vice President and Branch Manager
Sandra J. Wilson
Assistant Vice President
Alexia G. Beegle
Real Estate Officer
Donna L. Gatlin
Operations Officer
Karen S. Grove
Assistant Cashier and Branch Manager
Helen W. Inge
Assistant Cashier
Lisa H. Owen
Auditor
Deirdre M. Pearman
Branch Officer
Carolyn T. Peterson
Administrative Officer
Grace D. Phelps
Assistant Trust Officer
Katherine C. Phillips
Assistant Cashier & Branch Manager
Mark E. Thompson
Accounting Officer
Felecia C. Truitt
Assistant Cashier

page 4

The 1993 merger between First National Bank, Brewton and The
Bank of Mobile has proven to be an ideal union of complementary
strengths.
Under the direction of South Alabama Bancorporation, the
combined resources of both banks now exceeds their individual
strengths before the merger.
This positive trend was established from the very beginning
and has been sustained ever since the consolidation. For three
consecutive years, South Alabama Bancorporation has increased
dividends to shareholders.
Both member banks enjoy a working relationship into which
each has contributed resources and expertise. Their newfound
cooperative strength has opened up additional opportunities all
over the region and has unleashed a dynamic, home-based financial
services company.
South Alabama Bancorporation's enviable flexibility derives
primarily from its large capital base - nearly 12 percent - a
ratio which is larger than that of most institutions within its
peer group. This strength relates directly to the organization's
ability to lend, to branch out, and to pay dividends.
During 1996, the organization expects to utilize this
corporate momentum to expand into Baldwin County, a key stepping
stone on the way to a more diverse economic foundation and a
wider presence in the South Alabama region.
Over the coming year, South Alabama Bancorporation expects
to continue on the course established during the previous three
years: to establish an evermore secure position within the
region, and to manage assets so as to create a whole that is
greater than the sum of its parts.

Management's Discussion and Analysis of Financial Condition and
Results of Operations

The following discussion and analysis focuses on information
about South Alabama Bancorporation, Inc. (the "Company") and its
subsidiaries, The Bank of Mobile (the "Mobile Bank") and First
National Bank, Brewton (the "Brewton Bank"), that is not
otherwise apparent from the consolidated financial statements and
related footnotes appearing later in this annual report.
Reference should be made to those statements and the financial
data presented elsewhere in this report for a complete
understanding of the following discussion and analysis.

On September 30, 1993, South Alabama Bancorporation, Inc., a
Brewton, Alabama, bank holding company, was merged into Mobile
National Corporation, with the resulting company changing its
name to South Alabama Bancorporation, Inc. The merger between
South Alabama Bancorporation, Inc., and Mobile National
Corporation has been accounted for as a pooling-of-interests;
accordingly, the pre-merger accounts of the former South Alabama
Bancorporation, Inc., have been combined with those of Mobile
National Corporation for the years 1991 through 1993.

Summary

The Company recorded net income of $3.0 million in 1995, an
increase of 8.1 percent from $2.8 million in 1994. The gain in
earnings was the result of a 6.6 percent increase in net interest
revenue. Non-interest expense increased 3.3 percent while
non-interest revenue increased 1.4 percent. Within the category
of non-interest revenue, trust department revenue increased 14.3
percent.

Financial Condition
Average Assets and Liabilities

Average assets in 1995 were $228.4 million compared to $216.8
million in 1994, an increase of 5.4 percent. Average loan volume
increased 13.7 percent in 1995 compared to 1994, and this
followed a similar increase, 14.2 percent, in 1994 compared to
1993. As in 1994, the loan growth in 1995 was funded partially by
a decrease in the investment portfolio. The remainder of the
growth was funded with an increase in deposits.

Average total deposits in 1995 were 5.1 percent higher than in
1994. Average non-interest bearing deposits increased 10.4
percent while average interest bearing demand deposits decreased
13.6 percent. This decline in interest bearing deposits was
offset by a 28.9 percent increase in average time deposits.
Average savings deposits were relatively unchanged.

The category short-term borrowings consists of federal funds
purchased, overnight repurchase agreements
and deposits into the treasury tax and loan account. During the
years 1991 through 1993, a reduction in the average balance in
this category occurred because of efforts by Management to reduce
the dependency on and volatility of these funds. In 1994, the
average balance increased $1.1 million as new corporate customers
using cash management services were added. The 1995 balances were
relatively unchanged from 1994.

The Company's average equity as a percent of average total assets
in 1995 was 11.9 percent, compared to 11.8 percent in 1994.
Included in average equity in 1993 was $900 thousand which
resulted from the adoption of Statement of Financial Accounting
Standards (SFAS) No. 109 Accounting for Income Taxes as of
January 1, 1993.

page 8

<TABLE>
Distribution of Average Assets, Liabilities and Shareholders'
Equity
<CAPTION>
(In Millions of Dollars) 1995 1994 1993 1992 1991
Average Assets
<S> <C> <C> <C> <C> <C>
Cash and non-interest
bearing deposits $ 11.4 $ 11.6 $ 11.5 $ 11.2 $ 10.2
Interest bearing deposits 0.7 1.0 1.1 1.2 1.0
Federal funds sold 8.6 6.6 8.5 10.9 7.7
Investment securities 62.2 68.9 72.4 70.6 59.5
Loans, net 138.2 121.6 106.5 94.2 95.5
Premises and equipment, net 3.7 3.5 3.6 3.4 3.0
Other real estate owned, net 0.3 0.4 0.6 1.6 3.7
Deferred tax asset 0.7 0.7 0.9
Other assets 2.6 2.5 2.3 2.6 2.5

Average Total Assets $228.4 $216.8 $207.4 $195.7 $183.1

Average Liabilities and Shareholders' Equity
Non-interest bearing
demand deposits $ 34.9 $ 31.6 $ 29.2 $ 27.4 $ 24.4
Interest bearing
demand deposits 68.8 79.6 79.5 63.7 51.5
Savings deposits 13.6 13.9 12.3 11.3 9.6
Time deposits 76.7 59.5 58.0 65.3 72.0
Total deposits 194.0 184.6 179.0 167.7 157.5

Short-term borrowings 4.6 4.7 3.6 6.5 7.3
Other liabilities 2.6 1.9 1.7 1.2 1.0
Shareholders' Equity 27.2 25.6 23.1 20.3 17.3

Average Total Liabilities
and Shareholders' Equity $228.4 $216.8 $207.4 $195.7 $183.1
</TABLE>

Loans

The largest and highest yielding category of interest earning
assets at South Alabama is the loan portfolio. Since 1992, one of
the primary objectives has been to increase loans. As a result,
average loans have increased by 46.7 percent since 1992 and stood
at $144.1 million at year-end 1995. Growth has occurred in all
categories of loans. The percent of real estate-mortgage loans to
total loans has increased to 45.7 percent in 1995 from 39.7
percent at year-end 1994 and commercial, financial and
agricultural loans compared to total loans decreased to 32.7
percent from 39.9 percent in 1994.

It is Management's goal to continue to carry loans on the books
with relatively short maturities or, in the case of longer
maturities, with floating rate arrangements. Of the outstanding
loans in the categories of commercial, financial and
agricultural, real estate-construction and real estate mortgages
at December 31, 1995, $62.0 million or 43.0 percent mature within
one year and are therefore available for interest rate changes,
if needed, to adjust for asset/liability management purposes. Of
the remaining loans in these categories maturing after one year,
33.2 percent are on a floating rate basis. Of the total loan
portfolio outstanding at December 31, 1995, 68.8 percent are
available for repricing, either because they mature within one
year or they are on a variable rate arrangement.

The Company makes available to its customers fixed rate, longer
term loans, especially in the residential real estate-mortgage
area. South Alabama is able to offer through third party
arrangements certain loan products which do not require that the
longer term loans be carried on the books of the Company but
allow the Company to gain the benefit of a larger variety of
product offerings and a source of fee income.

page 9

The table below shows the classifications of loans by major
category at December 31, 1995, and at each of the previous four
year-ends. The second table depicts maturities of selected loan
categories and the interest rate structure for such loans
maturing after one year.

<TABLE>
Distribution of Loans by Category
(Dollars in Millions) December 31,
<CAPTION>
1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
Commercial, financial,
and agricultural $ 47.2 $ 53.3 $ 44.3 $ 43.5 $43.2
Real estate - construction 8.6 6.7 6.0 3.2 3.3
Real estate - mortgage 65.9 53.1 50.0 42.5 33.0
Installment 22.4 20.7 18.2 11.9 16.4
Bankers acceptances 3.0

Total loans $144.1 $133.8 $118.5 $104.1 $95.9
</TABLE>
<TABLE>
Selected Loans by Type and Maturity
<CAPTION>
(Dollars in Millions) December 31, 1995
Maturing
After one
Within But Within After
One Year Five Years Five Years Total
<S> <C> <C> <C> <C>
Commercial,
financial,
and agricultural $28.7 $16.2 $ 2.3 $ 47.2
Real estate
- construction 7.6 1.0 8.6
Real estate
- mortgage 25.7 35.5 4.7 65.9
$62.0 $52.7 $7.0 $121.7

Loans maturing after one year with:
Fixed interest rates $37.5 $2.4
Floating interest rates 15.2 4.6
$52.7 $7.0
</TABLE>

The Company's rollover policy consists of an evaluation of
maturing loans to determine whether such loans will be renewed
(or rolled over) and, if so, at what amount, rate and maturity.

Investment Securities

Loan demand remained strong again in 1995 and, as a result, the
amount of funds allocated to the investment portfolio, on
average, decreased by $6.7 million or 9.7 percent.This decrease,
combined with deposit growth, was used to fund loans.
The Company adopted SFAS No. 115, Accounting for Certain
Investments in Debt and Equity Securities, as of January 1, 1994.
SFAS No. 115 requires that securities be classified into one of
three categories: held to maturity, available for sale, or
trading. Securities classified as held to maturity will be stated
at amortized cost. This classification means that the Company has
the positive intent and ability to hold the securities

page 10

until they mature. Securities classified as available for sale
will be stated at fair value. Securities in this category are
held for indefinite periods of time, and includes securities that
Management intends to use as part of its asset/liability
strategy, or that may be sold in response to changes in interest
rates, changes in prepayment risks, the need to increase
regulatory capital or other similar factors. The Company holds no
trading securities. The maturities and weighted average yields
of securities held to maturity and securities available for sale
at December 31, 1995, are presented in the following table using
the average stated contractual maturities. The average stated
contractual maturities may differ from the average expected life
because borrowers may have the right to call or prepay
obligations. Tax equivalent adjustments, using a 34 percent tax
rate, have been made when calculating yields on tax-exempt
obligations. For purposes of this table, securities available for
sale are shown at amortized cost.
<TABLE>
Maturity Distribution of Investment Securities
December 31, 1995
(Dollars in Thousands)
<CAPTION>
After 1 but After 5 but After
Within 1 year within 5 years within 10 years 10 years Total
Amount Yield Amount Yield Amount Yield Amount Yield Amount Yield
Securities held to maturity
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
US Treasury securities $2,016 6.41% $ 9,152 6.50% $11,168 6.48%
US Government agencies 2,222 5.66 $ 2,515 6.19% $ 1,371 6.64% 6,108 6.10
State and political
subdivisions 320 7.62 255 8.18 1,961 9.32 1,381 8.91 3,917 8.96
Other investments 248 6.65 248 6.65
Total securities
held to maturity 2,336 6.58 11,629 6.38 4,724 7.51 2,752 7.78 21,441 6.83

Securities available for sale
US Treasury securities 3,410 6.67 4,206 6.65 7,616 6.66
US Government agencies 4,468 6.04 5,961 6.42 4,309 6.65 14,738 6.37
State and political
subdivisions 552 8.57 1,978 8.86 4,133 9.29 5,126 9.51 11,789 9.28
Other investments 1,507 6.02 2,859 6.18 501 8.35 844 7.20 5,711 6.48
Total securities
available for sale 5,469 6.68 13,511 6.67 10,595 7.63 10,279 8.12 39,854 7.30

Total investments $7,805 6.65% $25,140 6.54% $15,319 7.59% $13,031 8.05% $61,295 7.14%
</TABLE>

page 11

Deposits and Short-Term Borrowings

Between 1993 and 1994 the Company experienced moderate growth in
all categories of deposits. In 1995, average non-interest bearing
demand deposits grew 10.4 percent compared to 1994 while average
savings deposits were relatively unchanged. During 1995, a
notable shift from interest bearing demand deposits into time
deposits occurred. During the year, the Mobile bank introduced
two promotions aimed at attracting longer term, small
denomination certificates of deposit in the retail area of the
bank. The promotions were successful in that average time
deposits increased by 28.9 percent, with approximately half of
this growth resulting from these campaigns. One effect of a
promotion such as this is that existing customers often are
attracted to these certificates of deposits and a certain amount
of funds flow from their interest bearing demand accounts into
certificates of deposit. Additionally, in 1995 the general
perception of lower future interest rates caused some customers
to seek fixed rate investments. As a result, average interest
bearing demand deposits fell 13.6 percent in 1995 compared to
1994.
<TABLE>
Average Deposits
(Dollars in Millions)
<CAPTION>
Average for the year
1995 1994 1993
Average Average Average Average Average Average
Amount Rate Amount Rate Amount Rate
Outstanding Paid Outstanding Paid Outstanding Paid
<S> <C> <C> <C> <C> <C> <C>
Non-
interest
bearing
demand
deposits $ 34.9 N/A $ 31.6 N/A $ 29.2 N/A

Interest
bearing
demand
deposits 68.8 3.72% 79.6 3.01% 79.5 2.92%

Savings
deposits 13.6 3.14 13.9 2.83 12.3 2.89

Time
deposits 76.7 5.47 59.5 3.85 58.0 3.51

Total
average
deposits $194.0 $184.6 $179.0
</TABLE>
The following table reflects maturities of time deposits of $100
thousand or more at December 31, 1995. Deposits of $30.2 million
in this category represented 14.4 percent of total deposits at
year-end 1995 compared to 12.0 percent at year-end 1994.
Management views these deposits as the most volatile of all the
deposit categories and does not pursue these deposits as
aggressively as smaller denomination consumer deposits.
<TABLE>
Maturities of Time Deposits of $100,000 or More
(Dollars in Millions)
<CAPTION>
At December 31, 1995
Under Over
3 3-12 12
Months Months Months Total
<C> <C> <C> <C>
$16.9 $10.7 $ 2.6 $30.2
</TABLE>
Short-term borrowings include three items: 1) federal funds
purchased, 2) securities sold under agreements to repurchase,
which are overnight transactions with large corporate customers,
commonly referred to as repos, and 3) other, representing
borrowings from the Federal Home Loan Bank, from the Federal
Reserve through its discount operations and U.S. Treasury tax and
loan funds on deposit subject to a note payable to the U.S.
Treasury Department. The Company purchased a small amount of
federal funds during 1995. Average securities sold under
agreements to repurchase in 1995 decreased to $2.7 million
compared to $3.3 million in 1994. Management has sought to
control the volume of funds in this category within certain
acceptable limits.

One of Management's asset/liability management goals is to
maintain a net sold position (whereby federal funds sold exceeds short
term borrowings). The Company has maintained this position, on
average, for all years shown.

page 12

<TABLE>
Short-Term Borrowings
(Dollars in Thousands)
<CAPTION>
1995 1994 1993
Average Weighted Average Weighted Average Weighted
Maximum Balance Average Maximum Balance Average Maximum Balance Average
Month-end During Interest Month-end During Interest Month-end During Interest
Balance Year Rate Balance Year Rate Balance Year Rate
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Federal funds
purchased $4,600 $ 766 3.06% $4,550 $ 213 3.87% $ 44 2.27%
Securities sold
under agreement
to repurchase 3,599 2,682 4.24 6,818 3,335 2.99 $3,938 2,376 2.02
Other 2,980 1,185 6.47 2,542 1,123 4.14 2,298 1,209 2.98
Total short-term
borrowings $4,633 4.62% $4,671 3.30% $3,629 2.34%
</TABLE>

Asset/Liability Management

The purpose of asset/liability management is to maximize return
while minimizing risk. Maximizing return means achieving the
Company's profitability and growth goals. Minimizing risk means
considering four key risk factors: 1) liquidity, 2) interest-rate
sensitivity, 3) capital adequacy, and 4) asset quality.
Asset/liability management at the Company involves a
comprehensive approach to balance sheet management which meets
the risk and return criteria established by Management and the
Board of Directors.

Liquidity

Liquidity represents the ability of a bank to meet loan
commitments as well as deposit withdrawals. Liquidity is derived
from both the asset side and the liability side of the balance
sheet. On the asset side, liquidity is provided by marketable
investment securities, maturing loans, federal funds sold and
cash and cash equivalents. On the liability side, liquidity is
provided by a stable base of core deposits. Additionally, the
Company has federal funds lines of credit, Federal Home Loan Bank
lines of credit and Federal Reserve discount window operations
available, if needed.

Interest Rate Sensitivity

By monitoring the Company's interest rate sensitivity, Management
attempts to maintain a desired balance between the growth of net
interest revenue and the risks that might result from significant
changes in interest rates in the market. One tool for measurement
of this risk is gap analysis, whereby the repricing of assets and
liabilities is compared within certain time categories. By
identifying mismatches in repricing opportunities within a time
category, interest rate risk can be identified. The interest
sensitivity analysis presented in the table below is based on
this type of gap analysis, which assumes that rates earned on
interest earning assets and rates paid on interest bearing
liabilities will move simultaneously in the same direction and to
the same extent. However, the rates associated with these assets
and liabilities actually change at different times and in varying
amounts.
Changes in the composition of earning assets and interest bearing
liabilities can increase or decrease
net interest revenue without affecting interest sensitivity. The
interest rate spread between assets and
their corresponding liability can be significantly changed while
the repricing interval for both remain unchanged, thus impacting
net interest revenue. Over a period of time, net interest revenue
can increase or decrease if one side of the balance sheet
reprices before the other side. An interest sensitivity ratio of
1.0 (earning assets divided by interest bearing liabilities),
which represents a matched interest sensitive

page 13

position, does not guarantee maximum net interest revenue.
Management must evaluate several factors, including the general
direction of interest rates, before investing in order to
determine the type of investment and the maturity needed.
Management may, from time to time, accept calculated risks
associated with interest sensitivity in order to maximize net
interest revenue. The company does not currently use derivative
financial instruments to manage interest rate sensitivity.
At December 31, 1995, the Company's three-month interest
sensitivity gap position was 1.08, and at twelve months the gap
position, on a cumulative basis, was .98 percent, well within the
range established by management as acceptable. The Company's
three month gap position indicates that, in a period of rising
interest rates, each $1.00 of assets which reprice upward could
be followed with slightly less than$1.00 in liabilities which
could reprice upward within three months. Thus, under this
scenario, net interest revenue might increase slightly during the
three-month period of rising rates. In a period of falling rates,
the opposite effect would occur. While certain categories, such
as some loans, are contractually tied to interest rate movements,
most are subject only to competitive pressures. Management has a
certain amount of flexibility when adjusting rates on these
funds. Management is confident of its ability to adjust to
interest rate changes in a manner that minimizes any significant
adverse effect on the net interest margin.

<TABLE>
Interest Sensitivity Analysis
<CAPTION>
(Dollars in Thousands) Non-Interest
December 31, 1995 Sensitive
Interest Sensitive Within (Cumulative) Within
3 Months 3-12 Months 1-5 Years 5 Years Total
EARNING ASSETS
<S> <C> <C> <C> <C> <C> <C>
Loans (1) $ 84,827 $ 99,150 $140,353 $ 3,794 $144,147
Unearned income (122) (122)
Less allowance
for loan losses (2,222) (2,222)
Net loans 84,827 99,150 140,353 1,450 141,803

Investment
securities 1,425 9,172 34,167 28,026 62,193
Federal funds
sold and resale
agreements 16,800 16,800 16,800 16,800
Interest bearing
deposits in other
financial
institutions 251 552 652 652

Total earning
assets $ 103,303 $125,674 $191,972 $29,476 $221,448

INTEREST BEARING LIABILITIES
Non-Interest
bearing deposits $ 42,086 $ 42,086
Interest
bearing demand
deposits (2) $ 55,199 $ 55,199 $ 55,199 18,424 73,623
Savings deposits (2) 12,699 12,699
Large denomination
time deposits 16,900 27,647 29,926 258 30,184
Other time
deposits 19,508 40,785 51,366 134 51,500

Short-term
borrowings 4,050 4,050 4,050 4,050

Total interest
bearing
liabilities $ 95,657 $127,681 $140,541 $ 73,601 $214,142

Interest
sensitivity
gap $ 7,646 $ (2,007) $ 51,431

Earning assets
/interest bearing
liabilities 1.08 .98 1.37
Interest sensitivity
gap/earning assets .07 (.02) .27

(1) Non-accrual loans are included in the "Non-Interest
Sensitive Within 5 Years" category.
(2) Certain types of savings and NOW accounts (included in
interest bearing demand deposits) are included in the
"Non-Interest Sensitive Within 5 Years" category. In Management's
opinion these liabilities do not reprice in the same proportions
as rate-sensitive assets, as they are not responsive to general
interest rate changes in the economy.
</TABLE>

page 14

Capital Resources

Realized shareholders' equity was $28.2 million at December 31,
1995, compared to $26.2 million at December 31, 1994, an increase
of 7.9 percent. The Company's leverage ratio, defined as
shareholders' equity divided by quarterly average assets, was
11.79 percent, well above peer group averages. The Federal
Reserve and the FDIC require that bank holding companies and
banks maintain certain minimum levels of capital as defined by
risk-based capital guidelines. These guidelines consider risk
factors associated with various components of assets, both on and
off the statement of condition. Under these guidelines capital is
measured in two tiers and these capital tiers are used in
conjunction with "risk adjusted" assets in determining "risk
adjusted" capital ratios. The Company's Tier I capital, which is
realized shareholders' equity less certain adjustments, was $28.2
million at December 31, 1995. Tier II capital, which is Tier I
plus the allowable portion of the allowance for loan losses, was
$30.5 million at December 31, 1995. The ratios expressed as a
percent of total risk-adjusted assets for Tier I and Tier II were
11.39 percent and 12.28 percent, respectively, at December 31,
1995. The Company exceeded the minimum risk-based capital
guidelines at December 31, 1995, 1994, and 1993 (see Footnote 13
of Notes to Consolidated Financial Statements.)

<TABLE>
Risk-Based Capital
<CAPTION>
(Dollars in Thousands) December 31,
1995 1994 1993
<S> <C> <C> <C>
Tier I capital -
Realized common shareholders'
equity $ 28,239 $ 26,161 $ 24,158
Tier II capital -
Allowable portion of the
allowance for loan losses 2,222 2,212 2,250

Total capital
(Tier I and Tier II) $ 30,461 $ 28,373 $ 26,408

Risk-adjusted assets $247,956 $207,140 $198,503
Quarterly average assets 239,467 220,024 197,373
Risk-based capital ratios:
Tier I capital 11.39% 12.63% 12.17%
Total capital
(Tier I and Tier II) 12.28% 13.70% 13.30%

Minimum risk-based capital guidelines:
Tier I capital 4.00% 4.00% 4.00%
Total capital
(Tier I and Tier II) 8.00% 8.00% 8.00%

Tier I leverage ratio 11.79% 11.89% 12.24%
</TABLE>

Results of Operations

Net interest revenue, the difference between amounts earned on
assets and the amounts paid on liabilities, is the most
significant component of earnings for a financial institution.
Changes in interest rates, changes in the volume of assets and
liabilities, and changes in the asset/liability mix are the major
factors that influence net interest revenue. Presented below is
an analysis of net interest revenue, weighted average yields on
earning assets and weighted average rates paid on interest
bearing liabilities for the past three years.
Net yield on interest earning assets is net interest revenue, on
a tax equivalent basis, divided by total interest earning assets.
This ratio is a measure of the Company's effectiveness in pricing
interest earning

page 15

assets and funding them with both interest bearing and
non-interest bearing liabilities. The Company's net yield, on a
tax equivalent basis, increased to 5.24 percent in 1995 from 5.22
percent and 4.81 percent in 1994 and 1993, respectively. The
improvement in 1994 compared to 1993 can generally be attributed
to a 13.9 percent increase in loans, the highest yielding
category of interest earning assets. Contributing to the
improvement was the fact that interest rates in general began to
rise in 1994 and interest earning assets repriced upward sooner
in 1994 than interest bearing liabilities. This trend continued
into the first quarter of 1995. As interest rates began to fall
in mid-1995, the opposite effect occurred and the net yield began
to close somewhat. The result for the year, however, aided by an
increase in loans of 13.4 percent, was in an improvement in the
net yield in 1995 of two basis points over 1994.
<TABLE>
Net Interest Revenue
<CAPTION>
(Dollars in Thousands) 1995 1994 1993
Average Interest Average Interest Average Interest
Amount Average Earned/ Amount Average Earned/ Amount Average Earned/
Outstanding Rate Paid Outstanding Rate Paid Outstanding Rate Paid
Interest Earning Assets
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Taxable securities $ 50,676 6.53% $ 3,308 $ 57,283 6.33% $ 3,628 $ 61,085 6.17% $ 3,768
Non-taxable securities 11,486 6.01 690 11,619 6.36 739 11,331 7.30 827
Total securities 62,162 6.43 3,998 68,902 6.34 4,367 72,416 6.35 4,595
Loans(1) 140,431 9.67 13,579 123,839 8.53 10,567 108,699 7.90 8,590
Federal funds sold 8,615 5.54 477 6,607 4.10 271 8,530 3.00 256
Deposits 656 6.10 40 985 6.60 65 1,071 7.38 79
Total interest earning
assets 211,864 8.54 18,094 200,333 7.62 15,270 190,716 7.09 13,520

Non-interest earning assets
Cash and due from banks 11,388 11,615 11,519
Premises and equipment,
net 3,758 3,514 3,619
Other real estate 252 421 649
Deferred tax asset 666 726 888
Other assets 2,628 2,387 2,250
Allowance for possible
loan losses (2,198) (2,223) (2,244)
Total $228,358 $216,773 $207,397

Interest Bearing Liabilities
Interest bearing demand
and savings deposits $ 82,391 3.63 2,987 $ 93,562 2.98 2,789 $ 91,783 2.92 2,678
Time deposits 76,777 5.47 4,196 59,452 3.85 2,291 57,988 3.51 2,038
Short-term borrowing 4,633 4.62 214 4,671 3.30 154 3,629 2.34 85
Total interest bearing
liabilities 163,801 4.52 7,397 157,685 3.32 5,234 153,400 3.13 4,801

Non-interest bearing liabilities
Demand deposits 34,855 31,609 29,154
Other 2,538 1,877 1,742
37,393 33,486 30,896
Shareholders' equity 27,164 25,602 23,101
Total $228,358 $216,773 $207,397

Net Interest Revenue 4.02% $10,697 4.30% $10,036 3.96% $8,719
Net yield on interest
earning assets 5.05% 5.01% 4.57%
Tax equivalent adjustment 0.19% .21% .24%
Net yield on interest
earning assets (tax equivalent) 5.24% 5.22% 4.81%

(1) Loans classified as non-accruing are included in the average
volume classification. Loan fees for all years shown are included
in the interest amounts for loans.
</TABLE>

page 16

The following table reflects the changes in sources of
taxable-equivalent interest income and expense between 1995 and
1994 and between 1994 and 1993. The variances resulting from
changes in interest rates and the variances resulting from
changes in volume are shown.
<TABLE>
Analysis of Taxable-Equivalent Interest Increases (Decreases)

(Dollars in Thousands)
<CAPTION>
1995 Change From 1994 1994 Change From 1993
Due to(1) Due to(1)
Amount Volume Rate Amount Volume Rate
Interest Revenue:
<S> <C> <C> <C> <C> <C> <C>
Taxable securities $ (320) $ (419) $ 99 $ (140) $ (236) $ 96
Non-taxable
securities (77) (14) (63) (139) 30 (169)
Total securities (397) (433) 36 (279) (206) (73)
Loans 3,012 1,510 1,502 1,977 1,232 745
Federal funds sold 206 98 108 15 (68) 83
Deposits (25) (21) (4) (14) (6) (8)

Total 2,796 1,154 1,642 1,699 952 747

Interest Expense:
Interest bearing demand
and savings
deposits 198 (376) 574 111 52 59
Other time deposits 1,905 828 1,077 253 55 198
Short-term borrowing 60 (2) 62 69 30 39

Total 2,163 450 1,713 433 137 296
Net interest
revenue $ 633 $ 704 $ (71) $1,266 $ 815 $451

(1) The change in interest due to both rate and volume has been
allocated to volume and rate changes in proportion to the
relationship of the absolute dollar amount of the change in each.
</TABLE>
In 1994 the economy experienced a rapid increase in interest
rates. The Company's levels of interest earning assets and
interest bearing liabilities grew and the result was a $1.7
million increase in interest revenue and a $433 thousand increase
in interest expense. Both increases were heavily influenced by
positive volume and rate variances. The Company entered 1994 in a
slightly liability-sensitive position, and remained so during the
year. Because of the timing differences, however, the upward
movement in rates was more pronounced on the asset side and the
result was an increase in net interest revenue in 1994 of $1.3
million.
In 1995 net interest revenue increased by $633 thousand compared
to 1994, and all of this growth resulted from an increase in the
volume of funds employed by the Company, primarily in loans.
Average time deposits increased 29.1 percent in 1995 compared to
1994 and significant increases in both the volume and rate
variances were incurred. However, this was offset by even higher
positive variances in loan income.

page 17

Provision for Loan Losses and Allowance for Loan Losses

The provision for loan losses is the cost of providing an
allowance that is adequate to absorb inherent losses on loans in
the portfolio. Management reviews the adequacy of the allowance
for loan losses on a continuous basis by assessing the quality of
the loan portfolio and adjusting the allowance when appropriate.
Management's evaluation of each loan includes a review of the
financial condition and capacity of the borrower, the value of
the collateral, current economic trends, historical losses,
workout and collection arrangements and possible concentrations
of credit.
Loan review procedures are in place to insure that potential
problem loans are identified and include a continuous review of
the portfolios at both affiliate banks by the Company's loan
review department.
Each quarter this review is quantified in a report to Management
to determine whether an appropriate allowance is maintained. This
report is then submitted to the Company's Board of Directors and
to the appropriate Board committee quarterly. The amount of the
allowance is affected by: (i) loan charge-offs, which decrease
the allowance; (ii) recoveries on loans previously charged-off,
which increase the allowance;
and (iii) the provisions for loan losses charged to income, which
increase the allowance.
The table below sets forth certain information with respect to
the Company's average loans, allowance
for loan losses, charge-offs and recoveries for the five years
ended December 31, 1995.
<TABLE>
Summary of Loan Loss Experience
(Dollars in Thousands)
<CAPTION>
Year Ended December 31,
1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
Allowance for
loan losses -
balance at
beginning of year $ 2,212 $ 2,250 $ 2,230 $ 2,009 $ 2,080

Charge-offs
Commercial, financial
and agricultural 60 101 239 50 263
Real estate - construction 58
Real estate -mortgage 9 17 30 85
Installment 88 99 104 120 25
Total charge-offs 148 209 360 200 431

Recoveries
Commercial, financial
and agricultural 31 59 66 42 100
Real estate - construction 6
Real estate -mortgage 15 33 8 3 39
Installment 34 27 58 42 23
Total recoveries 80 119 132 87 168

Net charge-offs 68 90 228 113 263

Addition to allowance
charged to
operating expense 78 52 248 334 192

Allowance for loan losses-
balance at
end of year $ 2,222 $ 2,212 $ 2,250 $ 2,230 $ 2,009

Loans at end of year $144,147 $133,821 $118,454 $104,102 $ 95,909
Ratio of ending
allowance to
ending loans 1.54% 1.65% 1.90% 2.14% 2.09%
Average loans, net of
unearned income $140,431 $123,839 $108,699 $ 96,348 $ 97,470
Non-performing loans $ 552 $ 564 $ 1,483 $ 1,069 $ 1,779
Ratio of net charge-
offs to average loans .05% .07% .21% .12% .27%
Ratio of ending
allowance to total
non-performing loans 402.54% 392.20% 151.72% 208.61% 112.93%
</TABLE>

page 18

The addition to the allowance charged to operating expense
increased from $52 thousand in 1994 to
$78 thousand in 1995. The allowance at year-end stood at $2.2
million, which is relatively unchanged from December 31, 1994 and
1993.
The allowance for loan losses at December 31, 1995, and December
31, 1994, as a percent of loans, was 1.54 percent and 1.65
percent, respectively. The allowance for loan losses represented
4.03 times non-performing loans at December 31, 1995, and 3.92
times non-performing loans at December 31, 1994. Management
reviews the adequacy of the allowance for possible loan losses on
a continuous basis by assessing the quality of the loan
portfolio, including non-performing loans, and adjusting the
allowance when appropriate. The allowance was considered adequate
at December 31, 1995.
Total charge-offs decreased from $209 thousand in 1994 to $148
thousand in 1995, while net charge-offs decreased from $90
thousand to $68 thousand. All of the charge-offs in 1995
occurred in the commercial, financial and agricultural category
and in the installment category. These loans were previously
identified and fully reserved for prior to charge-off.
Commercial, financial and agricultural loans represented 40.5
percent of total charge-offs while installment loans represented
59.5 percent. Recoveries in 1995 were $80 thousand, a decrease
from $119 thousand in 1994. Commercial, financial and
agricultural loans represented 38.8 percent of total recoveries
and installment loans represented 42.5 percent of the total.
Management will continue to vigorously pursue efforts in 1996 to
collect previously charged-off loans.
Management currently anticipates that in 1996 net charge-offs for
all loan categories except commercial, financial and
agricultural, as a percent of average loans in these categories,
will be approximately the same as in 1995. Management anticipates
net charge-offs in the commercial, financial and agricultural
category will be approximately $400 thousand higher than in 1995.

Non-Performing Assets

Non-performing assets include accruing loans 90 days or more past
due, loans on non-accrual, renegotiated loans and other real
estate owned. Commercial, business and installment loans are
classified as non-accrual by Management upon the earlier of: (i)
a determination that collection of interest is doubtful; or (ii)
the time at which such loans become 90 days past due, unless
collateral or other circumstances reasonably assure full
collection of principal and interest.
The table below sets forth certain information with respect to
accruing loans 90 days or more past due, loans on non-accrual,
renegotiated loans and other real estate owned.
<TABLE>
Summary of Non-Performing Assets
<CAPTION>
(Dollars in Thousands) December 31,
1995 1994 1993
<S> <C> <C> <C>
Accruing loans 90 days
or more past due $ 62 $ 4 $ 166
Loans on non-accrual 490 560 1,060
Renegotiated loans 257
Total non-performing loans 552 564 1,483
Other real estate owned 308 240 453
Total non-performing assets $860 $804 $1,936
Loans 90 days or more past due
as a percent of loans 0.04% -- 0.14%
Total non-performing loans
as a percent of loans 0.38% 0.42% 1.25%
Total non-performing assets
as a percent of loans and
other real estate owned 0.60% 0.60% 1.63%
</TABLE>

page 19

The level of non-performing assets as a percent of loans and
other real estate owned at year-end 1995 was unchanged from
year-end 1994 and was significantly improved from 1993. At
December 31, 1995, total non-performing assets were $860
thousand, or .60 percent of total loans and other real estate
owned. At December 31, 1994, non-performing assets accounted for
$804 thousand, or .60 percent of total loans and other real
estate owned, while at December 31, 1993, non-performing assets
were $1.9 million, representing 1.63 percent of total loans and
other real estate owned.
Any loans classified for regulatory purposes as loss, doubtful,
substandard or special mention, and not included above, do not
(i) represent or result from trends or uncertainties which
Management reasonably expects will materially impact future
operating results, or (ii) represent material credits about which
Management is aware of any information which causes Management to
have serious doubts as to the ability of such borrower to comply
with the loan repayment terms.
Details of Non-Accrual Loans
The table below shows the impact of non-accrual loans on interest
income the past three years. Not included in the table are loans
totaling $1.1 million at December 31, 1995, as to which
Management has reservations about the ability of the borrowers to
comply with present repayment terms. These credits were
considered in determining the adequacy of the allowance for
possible loan losses and, while current, are regularly monitored
for changes within a particular industry or general economic
trends which could cause the borrowers severe financial
difficulties.
<TABLE>

Details of Non-Accrual Loans

(Dollars in Thousands)
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Principal balance at December 31, $490 $560 $1,060

Interest that would have been
recorded under original terms
for the years ended December 31, $ 40 $ 50 $ 93

Interest actually recorded
in the financial statements for
the years ended December 31, $ 5 $ 1 $ 22
</TABLE>

Non-Interest Revenue and Non-Interest Expense

Trust department revenue is an important component of
non-interest revenue, accounting for 46.4 percent of that
category in 1995. Trust department revenue of $1.0 million was an
increase of 14.3 percent from 1994. The Company operates trust
departments at both banks, with total assets of approximately
$300 million.
Service charges on deposit accounts increased 2.9 percent, a
result of an increase in the number of accounts, as no
significant increases in the Company's schedule of service
charges have been implemented in two years.
Securities gains were lower in 1995 because of decreased activity
in the investment portfolio. Other income, charges and fees were
significantly increased in 1994 from 1993, and most of the
increase related to fees associated with new mortgage products
and sales of non-traditional products such as mutual funds and
annuities. In 1995, fee income from these products was similar to
the 1994 level, although credit card fee income was reduced,
accounting for the decrease in total.

page 20

<TABLE>
Non-Interest Revenue
<CAPTION>
(Dollars in Thousands) Year Ended December 31,
1995 1994 1993
Non-Interest Revenue:
<S> <C> <C> <C>
Trust department revenue $1,042 $ 912 $ 926
Service charges on
deposit accounts 853 829 811
Securities gains, net 56 137 380
Gain (loss) on sale of
other real estate owned (9)
Other income, charges
and fees 293 334 214

Total $2,244 $2,212 $2,322
</TABLE>
In 1995, personnel costs rose 9.3 percent compared to 1994 as a
full year of expense associated with several branch openings in
1994 was realized. Net occupancy expenses and furniture and
equipment expenses showed increases in 1995 of 11.6 percent and
14.4 percent, respectively. In both categories, the increases
resulted from changes relating to preparations for the move into
the new main office of the Mobile Bank in the Spring of 1996 and
to the new branch offices opened during 1994. Other operating
expenses decreased $281 thousand, or 10.1 percent, in 1995
compared to 1994 and most of the decrease can be attributed to
reduced costs for FDIC insurance.

<TABLE>
Non-Interest Expense
<CAPTION>
(Dollars in Thousands) Year Ended December 31,
1995 1994 1993
Non-Interest Expense:
<S> <C> <C> <C>
Salaries $3,582 $3,263 $2,893
Pension and other
employee benefits 927 862 652
Furniture and equipment exp. 826 722 656
Net occupancy expenses 596 534 437
Provision for other real
estate expense 31
Other operating expense 2,515 2,796 2,480

Total $8,446 $8,177 $7,149
</TABLE>

page 21

Income Taxes

At December 31, 1992, the Company had a net operating loss
carryforward for tax purposes. Accordingly, the provision for
income taxes during 1992 was offset by an extraordinary item
relating to utilization of the net operating loss carryforwards.
Under SFAS No. 109 the Company recorded a deferred tax asset and
a Cumulative Effect of Change in Accounting for Income Taxes as
of January 1, 1993. Subsequent to implementation of SFAS No. 109
the Company is recognizing income tax expense without any
extraordinary item for utilization of the net operating loss
carryforward. The effect of applying the new accounting method
was an addition to net income in 1993 of approximately $1.0
million.
Income tax expense was $1.4 million in 1995, compared to $1.2
million and $1.3 million in 1994 and 1993, respectively.

Inflation and Other Issues

Because the Company's assets and liabilities are essentially
monetary in nature, the effect of inflation on the Company's
assets differs greatly from that of most commercial and
industrial companies. Inflation does have an impact on the growth
of total assets in the banking industry and the resulting need to
increase capital at higher than normal rates in order to maintain
an appropriate equity to assets ratio. Inflation also has a
significant effect on other expenses, which tend to rise during
periods of general inflation. Management believes, however, that
the Company's financial results are influenced more by its
ability to react to changes in interest rates than by inflation.
Except as discussed in this Management's Discussion and Analysis,
Management is not aware of trends, events or uncertainties that
will have or that are reasonably likely to have a material effect
on the liquidity, capital resources or operations of the Company.
Management is not aware of any current recommendations by
regulatory authorities which, if they were implemented, would
have such an effect.

page 22

<TABLE>
Selected Quarterly Financial Data (Unaudited)
(Dollars in Thousands Except Per Share Amounts)
<CAPTION>
1995
First Second Third Fourth Total

<S> <C> <C> <C> <C> <C>
Interest revenue $4,221 $4,500 $4,633 $4,740 $18,094

Interest expense 1,601 1,850 1,962 1,984 7,397

Net interest revenue 2,620 2,650 2,671 2,756 10,697

Provision for
loan losses 3 4 71 78
Non-interest
revenue 513 575 537 619 2,244
Non-interest
expense 2,081 2,129 2,068 2,168 8,446

Income before
income taxes 1,052 1,093 1,136 1,136 4,417

Income tax
expense 334 333 366 377 1,410

Net income $ 718 $ 760 $ 770 $ 759 $3,007

Net income
per share $ .24 $ .25 $ .26 $ .25 $ 1.00
</TABLE>

<TABLE>
(Dollars in Thousands Except Per Share Amounts)
<CAPTION>
1994
First Second Third Fourth Total

<S> <C> <C> <C> <C> <C>
Interest revenue $ 3,443 $ 3,781 $ 3,938 $ 4,108 $15,270

Interest expense 1,174 1,240 1,347 1,473 5,234

Net interest
revenue 2,269 2,541 2,591 2,635 10,036

Provision for
loan losses 20 19 13 52
Non-interest
revenue 649 523 526 514 2,212

Non-interest
expense 1,879 2,004 2,106 2,188 8,177

Income before
income taxes 1,039 1,040 992 948 4,019

Income tax expense 315 325 299 298 1,237

Net income $ 724 $ 715 $ 693 $ 650 $ 2,782

Net income
per share $ .24 $ .24 $ .23 $ .22 $ .93
</TABLE>

page 23

<TABLE>
Selected Financial Data
(Dollars in Thousands Except Per Share Amounts)
<CAPTION>
1995 1994 1993 1992 1991
RESULTS OF OPERATIONS:
<S> <C> <C> <C> <C> <C>
Interest revenue $ 18,094 $ 15,270 $ 13,520 $ 13,459 $ 14,413
Interest expense 7,397 5,234 4,801 5,751 8,231
Net interest revenue 10,697 10,036 8,719 7,708 6,182
Provision for
loan losses 78 52 248 334 192
Non-interest revenue 2,244 2,212 2,322 2,403 2,105
Non-interest expense 8,446 8,177 7,149 7,062 7,300
Income before income
taxes, extraordinary
item and cumulative
effect of change in
accounting for
income taxes 4,417 4,019 3,644 2,715 795
Income taxes 1,410 1,237 1,263 773 144
Net income before
extraordinary item
and cumulative effect
of change in
accounting for
income taxes 3,007 2,782 2,381 1,942 651
Extraordinary item 273 3
Cumulative effect of
change in accounting
for income taxes 1,010 57
Net income $ 3,007 $ 2,782 $ 3,391 $ 2,272 $ 654
Earnings per share:
Before extraordinary
item and cumulative
effect of change in
accounting for
income taxes $ 1.00 $ .93 $ .79 $ .67 $ .24
Extraordinary item .09
Cumulative effect
of change in
accounting for
income taxes .34 .02
Net income $ 1.00 $ .93 $ 1.13 $ .78 $ .24

Average number of shares
outstanding (000's) 2,999 2,999 2,999 2,902 2,770

YEAR-END STATEMENT
OF CONDITION:
Total assets $244,949 $218,506 $218,704 $212,979 $195,489
Loans 144,147 133,821 118,454 104,102 95,909
Deposits 210,092 185,842 187,392 184,298 166,617
Shareholders'
equity 28,797 26,104 24,158 21,033 17,260

AVERAGE BALANCES:
Total assets $228,358 $216,773 $207,397 $195,716 $183,098
Average earning
assets 211,864 200,333 190,716 179,053 165,667
Loans 140,431 123,839 108,699 96,348 97,470
Deposits 194,023 184,624 178,925 167,619 157,535
Shareholders' equity 27,164 25,602 23,101 20,337 17,266

PERFORMANCE RATIOS:
Net income to:
Average total
assets 1.32% 1.28% 1.64% 1.16% .36%
Average
shareholders' equity 11.07% 10.87% 14.68% 11.17% 3.79%
Average shareholders'
equity to average
total assets 11.90% 11.81% 11.14% 10.39% 9.43%
Dividend payout ratio 32.00% 27.96% 19.47% 17.95% 62.50%
</TABLE>

page 24

Market Prices And Cash Dividends Per Share
The Company's common stock is traded in the over-the-counter
market. Bid and asked prices (symbol "SABC") are quoted in the
NASDAQ inter-dealer system of the National Association of
Securities Dealers.
The high and low bid prices shown represent inter-dealer prices
without adjustment for retail markup, markdown or commission and
do not represent actual transactions. Trades have generally
occurred in small lots, and the prices quoted are not necessarily
indicative of the market value of a substantial block.
At December 31, 1995, the Company had approximately 1,183
shareholders, of record or through registered clearing agents.
<TABLE>
<CAPTION>
Market Prices Per Share Cash Dividends Declared
Bid Per Share
High Low
1995
<C> <S> <C> <C> <C>
1st Quarter 12 3/4 12 3/4 .08
2nd Quarter 12 3/4 12 1/2 .08
3rd Quarter 14 1/4 12 1/2 .08
4th Quarter 14 1/4 12 1/2 .08

1994
1st Quarter 12 3/4 12 1/4 .06
2nd Quarter 12 1/2 12 1/2 .06
3rd Quarter 12 3/4 12 1/2 .07
4th Quarter 12 3/4 12 1/2 .07

1993
1st Quarter 10 1/4 9
2nd Quarter 11 3/4 10
3rd Quarter 12 1/4 11 3/4 .05
4th Quarter 12 1/4 12 1/4 .13
</TABLE>

page 25

Management's Report on Financial Statements
The Management of South Alabama Bancorporation, Inc. is
responsible for the preparation, content, integrity, objectivity
and reliability of the financial statements and all other
financial information included in this annual report. These
statements have been prepared in accordance with generally
accepted accounting principles appropriate within the banking
industry to reflect, in all material respects, the substance of
events and transactions that should be included. In preparing
the consolidated financial statements, Management made judgements
and estimates based upon currently available
facts, events and transactions.
Management depends upon the Company's accounting system and the
internal control structure to meet its responsibility for the
reliability of these statements. These systems and controls are
designed to provide reasonable assurance that the assets are
safeguarded from material loss and that the transactions executed
are in accordance with Management's authorizations and are
properly recorded in the financial records. The concept of
reasonable assurance recognizes that the cost of internal
accounting controls should not exceed the benefits derived and
that there are inherent limitations of any system of internal
accounting controls.
The independent public accounting firm of Arthur Andersen LLP has
been engaged to audit the Company's financial statements and to
express an opinion as to whether the Company's statements present
fairly, in all material respects, the financial position, cash
flows and the results of operations in accordance with generally
accepted accounting principles. Their audit is conducted in
conformity with generally accepted auditing standards and
includes procedures believed by them to be sufficient to provide
reasonable assurance that the financial statements are free of
material misstatement.
The Audit Committee of the Board of Directors, composed
of directors who are not employees of the Company, oversees
Management's responsibility in the preparation of these
statements. This committee has the responsibility to
periodically review the scope, findings and the opinions of the
audits of the independent and internal auditors. The external
accountants and the internal auditors have free access to the
Audit Committee and also to the Board of Directors to meet
independent of Management to discuss the internal control
structure, accounting, auditing and other financial reporting
concerns.
We believe these policies and procedures provide reasonable
assurance that our operations are conducted with a high standard
of business conduct and that the financial statements reflect
fairly the financial position, results of operations and the cash
flows of the Company.

/s/J. Stephen Nelson /s/W. Bibb Lamar, Jr.
Chairman President and CEO

/s/F. Michael Johnson
Chief Financial Officer

INDEPENDENT AUDITORS' REPORT
To South Alabama Bancorporation, Inc. and Subsidiaries:
We have audited the accompanying consolidated statement of
condition of South Alabama Bancorporation, Inc. (a Delaware
Corporation) and Subsidiaries as of December 31, 1995, and the
related consolidated statements of income, changes in
shareholders' equity, and cash flows for the year ended December
31, 1995. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit. The
financial statements of South Alabama Bancorporation, Inc., as of
December 31, 1994 and 1993 were audited by other auditors, whose
report dated January 27, 1995, expressed an unqualified opinion
on those statements and included an explanatory paragraph that
described the Company's change in accounting for income taxes
effective January 1, 1993 and in accounting for securities
effective January 1, 1994, both as described in Note 1 to the
consolidated financial statements.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial
position of South Alabama Bancorporation, Inc. and Subsidiaries
as of December 31, 1995 and the results of their operations and
their cash flows for the year then ended, in conformity with
generally accepted accounting principles.

/s/ Arthur Andersen
Birmingham, Alabama
January 26,1996

page 26

<TABLE>
Consolidated Statements of Condition
As of December 31, 1995 and 1994
South Alabama Bancorporation, Inc. and Subsidiaries
(Dollars and Shares in Thousands)
<CAPTION>
December 31,
1995 1994
ASSETS:
<S> <C> <C>
Cash and due from banks $ 15,604 $ 11,649
Federal funds sold 16,800 4,650
Total cash and cash equivalents 32,404 16,299
Interest-bearing
bank balances 652 660
Investment securities available for
sale, net of unrealized gain
of $898 in 1995 and unrealized
loss of $87 in 1994 40,752 19,572
Investment securities
held to maturity (market value:
1995-$21,664, 1994-$41,376) 21,441 43,445

Loans 144,147 133,821
Less: Unearned income (122) (149)
Allowance for loan losses (2,222) (2,212)
Loans, net 141,803 131,460

Premises and equipment, net 4,585 3,512
Other real estate owned 308 240
Accrued income receivable 2,377 2,239
Deferred tax asset 462 762
Other assets 165 317
Total $244,949 $218,506

LIABILITIES:
Deposits
Interest bearing $168,006 $149,733
Non-interest bearing 42,086 36,109
Total deposits 210,092 185,842

Short-term borrowings 4,050 4,985
Other liabilities 2,010 1,575
Total liabilities 216,152 192,402

SHAREHOLDERS' EQUITY:
Preferred stock - no par value
Shares authorized - 500
Shares outstanding- none
Common stock - $.01 par value
Shares authorized - 4,500
Shares outstanding- 3,002
in 1995 and 2,999 in 1994 30 30
Capital surplus 16,538 16,507
Net unrealized gain (loss) on
securities available for sale,
net of taxes of $339 in 1995
and ($30) in 1994 558 (57)
Retained earnings 11,671 9,624
Total shareholders' equity 28,797 26,104
Total $244,949 $218,506
See notes to consolidated financial statements.
</TABLE>

page 27

<TABLE>
Consolidated Statements of Income
For the Years Ended December 31, 1995, 1994 and 1993
South Alabama Bancorporation, Inc. and Subsidiaries
(In Thousands, Except Earnings Per Share)
<CAPTION>
Year Ended December 31,
1995 1994 1993
INTEREST REVENUE:
<S> <C> <C> <C>
Interest and fees on loans $13,579 $ 10,567 $ 8,590
Federal funds sold 477 271 256
Interest-bearing bank balances 40 65 79
Investment securities
- taxable 3,308 3,628 3,768
Investment securities
- non-taxable 690 739 827
Total interest revenue 18,094 15,270 13,520
INTEREST EXPENSE:
Deposits 7,183 5,080 4,716
Short-term borrowings 214 154 85
Total interest expense 7,397 5,234 4,801
Net interest revenue 10,697 10,036 8,719
Provision for loan losses 78 52 248
Net interest revenue
after provision for
loan losses 10,619 9,984 8,471
NON-INTEREST REVENUE:
Trust department income 1,042 912 926
Service charges on
deposit accounts 853 829 811
Securities gains, net 56 137 380
Loss on sale of other
real estate owned (9)
Other income,charges and fees 293 334 214
Total non-interest revenue 2,244 2,212 2,322
NON-INTEREST EXPENSE:
Salaries 3,582 3,263 2,893
Pensions and other
employee benefits 927 862 652
Furniture and equipment expense 826 722 656
Net occupancy expense 596 534 437
Provision for losses on other
real estate owned 31
Other expense 2,515 2,796 2,480
Total non-interest expense 8,446 8,177 7,149
Income before income taxes
and cumulative effect of change
in accounting for income taxes 4,417 4,019 3,644
Income tax expense 1,410 1,237 1,263
Net income before cumulative effect
ofchange in accounting for
income taxes 3,007 2,782 2,381
Cumulative effect of change in
accounting for income taxes 1,010
NET INCOME $ 3,007 $ 2,782 $ 3,391

Earnings per share:
Before cumulative effect of
change in accounting for
income taxes $ 1.00 $ .93 $ .79
Cumulative effect of change in
accounting for income taxes .34
Net income $ 1.00 $ .93 $ 1.13
Average shares outstanding 2,999 2,999 2,999

See notes to consolidated financial statements.
</TABLE>

page 28

<TABLE>
Consolidated Statements of Changes in Shareholders' Equity
For the Years Ended December 31, 1995, 1994 and 1993
South Alabama Bancorporation, Inc. and Subsidiaries
(Dollars and Shares in Thousands)
<CAPTION>

Net
Unreal- Net
ized Unrealized
Loss in Gain (Loss)
Invest- on
Common Stock ment Gain (Loss)
in Securities
Shares Capital Mutual Available Retained
Issued Amount Surplus Funds For Sale Earnings Total

<S> <C> <C> <C> <C> <C> <C> <C>
Balance,
December
31, 1992 2,999 $2,999 $13,538 $(406) $4,902 $21,033
Change in
par value
of common
stock (2,969) 2,969

Dividends
paid
($.22 per
share) (672)
(672)

Net change
in
unreal-
ized loss
on invest-
ments in
mutual
funds 406 406

Net income 3,391 3,391

Balance,
December
31, 1993 2,999 30 16,507 7,621 24,158

Dividends
paid
($.26 per
share) (779) (779)
Impact at
January
1, 1994
of
adoption
of State-
ment of
Financial
Accounting
Standards
No. 115,net
of taxes of
$711 $1,088 1,088
Net change
in unrealized
gain (loss) on
securities
available for
sale, net of
taxes of $681 (1,145) (1,145)

Net income 2,782 2,782

Balance,
December 31,
1994 2,999 30 16,507 (57) 9,624 26,104

Dividends
paid($.32
per share) (960) (960)
Net change in
unrealized gain
(losses) on
securities, due
to the
reclassification
of securities
from held to
maturity to
available for sale,
net of taxes of $59 101 101
Net change in
unrealized gain(loss)
on securities
available for sale,
net of taxes of $362 514 514

Common
stock
issued 3 31 31

Net income 3,007 3,007

Balance,
December
31, 1995 3,002 $ 30 $16,538 $ 558 $11,671 $28,797

See notes to consolidated financial statements.
</TABLE>

page 29

<TABLE>
Consolidated Statements of Cash Flows
For the Years Ended December 31, 1995, 1994 and 1993
South Alabama Bancorporation, Inc. and Subsidiaries
(Dollars in Thousands)

<CAPTION>
Year Ended December 31,
1995 1994 1993
OPERATING ACTIVITIES:
<S> <C> <C> <C>
Net income $ 3,007 $ 2,782 $ 3,391
Adjustments to
reconcile net income
to net cash provided
by operating activities
Cumulative effect of
change in accounting for income taxes
(1,010)
Depreciation and
amortization 821 613 515
Provisions for losses
on loans and other
real estate owned 78 52 279
(Gain) loss on sale
of other real estate 9
Securities (gains) and
losses, net (56) (137) (380)
Deferred income taxes (71) 8 668
(Increase) decrease in:
Accrued income
receivable (138) (475) 462
Other assets 86 192 15
(Decrease) increase
in other liabilities 435 (82) 156

Net cash provided by
operating activities 4,162 2,953 4,105

INVESTING ACTIVITIES:
Net decrease (increase)
in interest-bearing
bank balances 8 609 (359)
Net increase in loans (10,421) (15,536) (14,666)
Purchase of premises
and equipment (1,773) (665) (241)
Proceeds from sale
of other real estate 213 504
Proceeds from
maturities of
securities held
to maturity 6,926 11,554 31,247
Proceeds from
maturities of
securities
available for sale 3,658 8,199
Proceeds from sales
of securities
available for sale 1,943 13,481 7,057
Proceeds from sales
of securities
held to maturity 771
Purchases of securities
held to maturity (5,294) (25,228) (30,793)
Purchases of securities
available for sale (5,490) (2,334) (8,524)

Net cash used in
investing activities (10,443) (9,707) (15,004)

FINANCING ACTIVITIES:
Net increase (decrease)
in deposits 24,250 (1,550) 3,094
Net decrease in
short-term borrowings (935) (512) (650)
Dividends paid (960) (779) (672)
Proceeds from issuance
of stock 31

Net cash provided by
(used in) financing
activities 22,386 (2,841) 1,772

NET INCREASE (DECREASE)
IN CASH AND CASH
EQUIVALENTS 16,105 (9,595) (9,127)

CASH AND CASH
EQUIVALENTS AT
BEGINNING OF YEAR 16,299 25,894 35,021

CASH AND CASH
EQUIVALENTS AT
END OF YEAR $32,404 $16,299 $25,894

SUPPLEMENTAL DISCLOSURE OF CASH
Flow information:
Interest paid $ 6,946 $ 5,073 $ 4,836
Income taxes paid 1,475 998 594
Reclassification of
securities from
held to maturity
to available sale 20,263

See notes to consolidated financial statements.
</TABLE>

page 30

Notes to Consolidated Financial Statements
For the Years Ended December 31, 1995, 1994 and 1993
South Alabama Bancorporation, Inc. and Subsidiaries
(Dollars and Shares in Thousands)

Note 1. Summary of Significant Accounting Policies
PRINCIPLES OF CONSOLIDATION - The accompanying consolidated
financial statements include the accounts of South Alabama
Bancorporation, Inc. (the "Company") and its wholly-owned
subsidiaries, The Bank of Mobile (the "Mobile Bank") and First
National Bank, Brewton (the "Brewton Bank"), (collectively the
"Banks"). All significant intercompany accounts and transactions
are eliminated. The Banks are engaged in the business of
obtaining funds, primarily in the form of deposits, and investing
such funds in commercial and real estate loans and investment
securities in Mobile, Brewton and the surrounding area. The Banks
also offer a range of other commercial bank services including
trust and investment products.
BASIS OF FINANCIAL STATEMENT PRESENTATION - The financial
statements have been prepared in conformity with generally
accepted accounting principles and with general practices within
the banking industry. In preparing the financial statements,
Management is required to make estimates and assumptions that
affect the reported amounts of assets and liabilities as of the
date of the statement of financial condition and revenues and
expenses for the period.
Actual results could differ significantly from those estimates.
Material estimates that are particularly susceptible to
significant change in the near-term relate to the determination
of the allowance for loan losses and the valuation of real estate
acquired in connection with foreclosures or in satisfaction of
loans. In connection with the determination of the allowance for
loan losses and real estate owned, Management obtains independent
appraisals for significant properties.
A substantial portion of the Company's loans are secured by real
estate in Mobile, Baldwin and Escambia Counties of Alabama. In
addition, the real estate owned by the Company is located in this
same area. Accordingly, the ultimate collectibility of a
substantial portion of the Company's loan portfolio and the
recovery of real estate owned are susceptible to changes in
market conditions in this area.
Management believes that the allowance fors losses on loans and
real estate owned are adequate. While Management uses available
information to recognize losses on loans and real estate owned,
future additions to the allowance may be necessary based on
changes in economic conditions. In addition, various regulatory
agencies, as an integral part of their examination process,
periodically review the Company's allowance for losses on loans
and real estate owned. Such agencies may require the Company to
recognize additions to the allowances based on their judgment
about information available to them at the time of their
examination.
CASH AND CASH EQUIVALENTS - For purposes of reporting cash flows,
cash and cash equivalents include cash on hand, amounts due from
banks and federal funds sold. Federal funds are generally
purchased and sold for one day periods.
INVESTMENT SECURITIES - In May 1993 the Financial Accounting
Standards Board ("FASB") issued Statement of Financial Accounting
Standards ("SFAS") No. 115, Accounting for Certain Investments in
Debt and Equity Securities. The Company adopted SFAS No. 115
effective January 1, 1994. In accordance with the provisions of
this pronouncement, prior years' financial statements were not
restated. At January 1, 1994, the adoption of SFAS No. 115
resulted in $1,088 of unrealized gain being recorded as a
separate component of shareholders' equity.
Securities available for sale are carried at fair value.
Unrealized gains and losses are excluded from earnings and
reported net of tax, as a separate component of shareholders'
equity until realized. Securities within the available for sale
portfolio may be used as part of the Company's asset/liability
strategy and may be sold in response to changes in interest rate
risk, prepayment risk or other similar economic factors. The
specific identification method is used to compute gains or losses
on the sale of these assets.
Investment securities not classified as available for sale or
trading are carried at cost, adjusted for the amortization of
premiums and the accretion of discounts. Premiums and discounts
are amortized and accreted to operations using the level yield
method, adjusted for prepayments as applicable. Management has
the intent and the Company has the ability
to hold these assets as long-term investments until their
estimated maturities. Under certain circumstances (including
the significant deterioration of the issuer's credit worthiness
or a significant change in tax-exempt status or statutory or
regulatory requirements), securities classified as held to
maturity may be sold or transferred to another portfolio.
On December 1, 1995, the Company changed classifications for
certain investment securities from securities held to maturity to
securities available for sale, as permitted by the FASB report
entitled "A Guide to Implementation of Statement No. 115 on
Accounting for Certain Investments in Debt and Equity
Securities."
ALLOWANCE FOR LOAN LOSSES - The allowance for loan losses is
maintained at a level considered by Management to be sufficient
to absorb losses inherent in the loan portfolio. Management's
determination of the adequacy of the allowance and the amount of
the provision charged to expense is based on periodic reviews of
the portfolio, past loan loss experience, current and expected
economic conditions and such other factors which, in Management's
judgement, deserve current recognition in estimating loan losses.
Recovery of the carrying value of loans is dependent to a great
extent on economic, operating and other conditions that may be
beyond the Company's control.

page 31

PREMISES AND EQUIPMENT - Premises and equipment are stated at
cost less accumulated depreciation and amortization. The
provision for depreciation and amortization is computed using the
straight-line method over the estimated useful lives of the
assets or terms of the leases as applicable.
OTHER REAL ESTATE OWNED - Other real estate owned is carried at
the lower of recorded investment of the loan or fair value, if
acquired by foreclosure, less costs to dispose. Any excess of the
recorded investment over fair value, less cost to dispose, is
charged to the allowance for loan losses at the time of
foreclosure. A provision is charged to earnings and a related
valuation account for losses on other real estate owned is
established when, in the opinion of Management, such losses are
anticipated. The ability of the Company to recover the carrying
value of real estate is based upon future sales of the real
estate. The ability to effect such sales is subject to market
conditions and other factors, all of which are beyond the
Company's control. The recognition of gains and losses on the
subsequent sales of other real estate owned is dependent upon
whether the nature and term of the sales and upon the future
involvement of the Company meet certain defined requirements. If
not met, gain recognition would be deferred.
INTEREST INCOME - Interest on loans is recorded generally over
the term of the loan based on the unpaid principal balance.
Accrual of interest is discontinued, when in Management's
opinion, collectibility of interest and principle becomes
doubtful. Upon such discontinuance, all unpaid accrued interest
is reversed.
INCOME TAXES - The Company files a consolidated federal income
tax return. Deferred income taxes result from temporary
differences in the recognition of income and expense for tax and
financial reporting purposes. The major temporary differences
result from differences in amounts recorded for provisions for
losses on loans and other real estate recorded in the
consolidated financial statements and amounts currently
deductible for income tax purposes.
In February 1992, the FASB issued SFAS No. 109, Accounting for
Income Taxes. SFAS No. 109 required a change from the deferred
method of accounting for income taxes of Accounting Principles
Board Opinion No. 11, Accounting for Income Taxes ("APB Opinion
11") to the asset and liability method of accounting for income
taxes. Under the asset and liability method of SFAS No. 109,
deferred tax assets and liabilities are recognized for the future
tax consequences attributable to differences between the
financial statement carrying amounts of existing assets and
liabilities and their respective tax bases and operating loss and
tax credit carryforwards. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are
expected to be recovered or settled. Under SFAS No. 109, the
effect on deferred tax assets and liabilities of a change in tax
rates is recognized in income in the period that includes the
enactment date.
The Company and the Mobile Bank adopted SFAS No. 109 effective
January 1, 1993. The Brewton Bank and its former Parent adopted
SFAS No. 109 effective January 1, 1992. The cumulative effects of
applying the new accounting method were credits to income of
$1,010 and $57 in 1993 and 1992, respectively and are reflected
in the accompanying statements of income.
APB Opinion 11 was used to account for income taxes prior to the
adoption of SFAS No. 109. Under APB Opinion 11, the Company would
have recorded an extraordinary income credit of $595 in 1993
relating to the income tax benefit of utilization of net
operating loss carryforwards for financial reporting purposes. An
extraordinary credit of $273 was recorded in the year 1992.
TRUST DEPARTMENT ASSETS AND INCOME - Assets held by the Banks in
a fiduciary capacity for customers are not included in the
consolidated financial statements. Fiduciary fees on trust
accounts are generally recognized on the cash basis. The income
recognized on the cash basis is not materially different from
that which would be reported on the accrual basis.
PER SHARE AMOUNTS - Per share amounts are based on the weighted
average number of shares of common stock outstanding during the
year. Shares issuable upon exercise of stock options have not
been included in the per share computations because the effect is
not significant.
OTHER -In October 1995, the FASB issued SFAS No. 123, Accounting
for Stock-Based Compensation. This Statement establishes
financial accounting and reporting standards for stock-based
employee compensation plans. Those plans include all arrangements
by which employees receive shares of stock or other equity
instruments of the employer or the employer incurs liabilities to
employees in amounts based on the price of the employer's stock.
Examples are stock purchase plans, stock options, restricted
stock, and stock appreciation rights. The accounting requirements
of this Statement are effective for transactions entered into in
fiscal years that begin after December 15, 1995, though they may
be adopted on issuance.
Management does not intend to adopt the provisions of this
Statement before the required date. Based on the current
compensation plans of the Company, Management does not believe
that the adoption of this Statement will have a significant
impact on the financial conditions or results of operations.
Certain reclassifications of 1994 and 1993 balances have been
made to conform with classifications used in 1995.

page 32

Notes to Consolidated Financial Statements
For the Years Ended December 31, 1995, 1994 and 1993
South Alabama Bancorporation, Inc. and Subsidiaries
(Dollars and Shares in Thousands)
Note 2. Merger
On September 30, 1993, South Alabama Bancorporation, Inc., a
Brewton, Alabama bank holding company, was merged into Mobile
National Corporation, with the resulting company changing its
name to South Alabama Bancorporation, Inc. Pursuant to the
Agreement and Plan of Merger (the "Agreement"), which was
approved by the shareholders of both Mobile National Corporation
and the former South Alabama Bancorporation, Inc. on September
28, 1993, 1,557 shares of Mobile National Corporation common
stock were authorized for issuance in connection with the merger.
At the effective time of the merger, and in accordance with the
terms of the Agreement, the shareholders of the former South
Alabama Bancorporation, Inc. common stock received five and eight
tenths shares of Mobile National Corporation's common stock for
each share of the former South Alabama Bancorporation, Inc.
common stock owned.

The accompanying consolidated financial statements give effect to
the merger which has been accounted for as a
pooling-of-interests. Accordingly, the pre-merger accounts of the
former South Alabama Bancorporation, Inc. have been combined with
those of the Company for all periods presented. Separate results
of operations of the combining entities for the nine months ended
September 30, 1993, are as follows:
<TABLE>
<CAPTION>
Nine Months Ended
September 30, 1993
Net interest revenue:
<S> <C>
Mobile National Corporation $3,310
South Alabama Bancorporation, Inc. 3,114

Net income:
Mobile National Corporation $1,750
South Alabama Bancorporation, Inc. 998
</TABLE>
Note 3. Restrictions on Cash and Due From Bank Accounts
The Banks are required to maintain average reserve balances with
the Federal Reserve Bank. The average of those reserve balances
for the years ended December 31, 1995 and 1994 was approximately
$1,160 and $1,573, respectively.

Note 4. Investment Securities

The following summary sets forth the carrying values and the
corresponding market values of investment securities available
for sale at December 31, 1995 and 1994:
<TABLE>
<CAPTION>
Gross Gross Estimated
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
1995:
<S> <C> <C> <C> <C>
U.S.
Treasury
securities $ 7,616 $ 200 $ 7,816
Obligations
of U.S.
Government
agencies 14,738 106 $ 99 14,745
Obligations
of states
and
political
sub-
divisions 11,789 643 25 12,407
Other
investments 5,711 73 5,784
Total $39,854 $1,022 $124 $40,752
1994:
U.S.
Treasury
securities $ 9,321 $199 $ 9,122
Obligations
of U.S.
Government
agencies 2,066 $ 4 11 2,059
Obligations
of states
and
political
sub-
divisions 6,534 164 6,698
Other
investments 1,738 2 47 1,693
Total $19,659 $170 $257 $19,572

</TABLE>

page 33

Notes to Consolidated Financial Statements
For the Years Ended December 31, 1995, 1994 and 1993
South Alabama Bancorporation, Inc. and Subsidiaries
(Dollars and Shares in Thousands)

The following summary sets forth the carrying values and the
corresponding market values of investment securities held to
maturity at December 31, 1995 and 1994:
<TABLE>
<CAPTION>
Gross Gross Estimated
Carrying Unrealized Unrealized Market
Value Gains Losses Value
1995:
<S> <C> <C> <C> <C>
U.S.
Treasury
securities $11,168 $252 $11,420
Obligations
of U.S.
Government
agencies 6,108 21 $ 27 6,102
Obligations
of states
and
political
sub-
divisions 3,917 42 65 3,894
Other
investments 248 248
Total $21,441 $315 $ $92 $21,664
1994:
U.S.
Treasury
securities $11,682 $ 321 $11,361
Obligations
of U.S.
Government
agencies 18,811 $ 1 $1,429 17,383
Obligations
of states
and
political
sub-
divisions 8,333 28 171 8,190
Other
investments 4,619 177 4,442
Total $43,445 $ 29 $2,098 $41,376
</TABLE>
Securities with a carrying value of approximately $36,321 and
$39,338 at December 31, 1995 and 1994, respectively, were pledged
to secure deposits of public funds and trust deposits.
Additionally, investment securities with a carrying value of
approximately $3,598 and $3,497 at December 31, 1995 and 1994,
respectively, were pledged to secure repurchase agreements.
Gross proceeds from the sales of securities available for sale
were $ 1,943 in 1995 and $13,481 in 1994. Gross realized
gains on sale of these securities were $56 in 1995 and $170 in
1994, and gross realized losses were $0 in 1995 and $33 in 1994.

Maturities of investment securities as of December 31, 1995, are
as follows:
<TABLE>
<CAPTION>
Available for Sale Held to Maturity
Amortized Market Amortized Market
Cost Value Cost Value
<S> <C> <C> <C> <C>
Due in 1 year or less $ 5,469 $ 5,505 $ 2,336 $ 2,351
Due in 1 to 5 years 13,511 13,853 11,629 11,872
Due from 5 years
to 10 years 10,595 10,875 4,724 4,725
Due in over 10 years 10,279 10,519 2,752 2,716

Total $39,854 $40,752 $21,441 $21,664
</TABLE>
On December 1, 1995, the Company reassessed the appropriateness
of the classification of securities held at that time and
determined that certain securities classified as held to maturity
should be reclassified as available for sale in accordance with
the one time reassessment prescribed by the FASB Special Report
"A Guide to Implementation of Statement 115 on Accounting for
Certain Investments in Debt and Equity Securities." On the date
of transfer, December 1, 1995, the Company reclassified those
securities identified from held to maturity to available for sale
at an estimated market value of $20,423 and unrealized gains and
losses of $296 and $136, respectively.

page 34

Notes to Consolidated Financial Statements
For the Years Ended December 31, 1995, 1994 and 1993
South Alabama Bancorporation, Inc. and Subsidiaries
(Dollars and Shares in Thousands)
Note 5. Loans
<TABLE>
A summary of loans follows: December 31,
<CAPTION>
1995 1994
<S> <C> <C>
Commercial, financial and agricultural $ 47,195 $ 53,331
Real estate - construction 8,591 6,678
Real estate - mortgage 65,911 53,128
Consumer installment and single pay 22,450 20,684
Total $144,147 $133,821
</TABLE>
In the normal course of business, the Banks make loans to
directors, executive officers, significant shareholders and their
affiliates (related parties). Related party loans are made on
substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable
transactions with other customers, and in Management's opinion,
do not involve more than the normal risk of collectibility. The
aggregate dollar amount of these loans was $10,766 at December
31, 1995, and $11,974 at December 31, 1994. During 1995, $8,510
of new loans and advances were made and principal repayments
totaled $9,718. Outstanding commitments to extend credit to
related parties totaled $8,460 at December 31, 1995.
At December 31, 1995 and 1994, non-accrual loans totaled $490 and
$560, respectively. The amount of interest income that would have
been recorded during 1995 and 1994, if these non-accrual loans
had been current in accordance with their original terms, was $40
and $50, respectively. The amount of interest income actually
recognized on these loans during 1995 and 1994 was $5 and $1,
respectively.
Effective January 1. 1995, the Company adopted SFAS No. 114,
Accounting by Creditors for Impairment of a Loan, and SFAS No.
118, Accounting by Creditors for Impairment of a Loan-Income
Recognition and Disclosure, an amendment to SFAS 114. Adoption
of these standards did not have a significant impact on the
Company's financial position or results of operations. At
December 31, 1995, the recorded investment in loans that are
considered to be impaired under SFAS 114 was $490 (all of which
were carried on a non-accrual basis). Included in this amount is
$461 of impaired loans for which the related allowance for loan
losses is $271 and $29 of impaired loans that do not have an
allowance for loan losses. The average recorded investment in
impaired loans during the year ended December 31, 1995, was
approximately $544. For the year ended December 31, 1995, the
amount of interest income recognized on impaired loans was
immaterial.

Note 6. Allowance for Loan Losses
The allowance for loan losses is summarized as follows:
<TABLE>
<CAPTION>
Year Ended December 31,
1995 1994 1993

<S> <C> <C> <C>
Balance at the beginning of year $2,212 $2,250 $2,230
Provision charged to
operating expense 78 52 248
Losses charged off (148) (209) (360)
Recoveries 80 119 132
Balance at the end of the year $2,222 $2,212 $2,250
</TABLE>
Activity in the allowance for possible losses on other real
estate owned was not significant in 1995, 1994 and 1993.

page 35

<CAPTION>
December 31,
1995 1994
<S> <C> <C>
Land and land improvements $1,320 $ 629
Bank buildings and improvements 2,022 2,022
Furniture, fixtures and equipment 4,397 4,122
Leasehold improvements 1,289 579
Total 9,028 7,352
Less accumulated depreciation
and amortization 4,443 3,840
Premises and equipment - net $4,585 $3,512
</TABLE>
The provision for depreciation and amortization charged to
operating expense in 1995, 1994 and 1993 amounted to $700, $613
and $515, respectively.

Note 8. Deposits
The following summary presents the detail of interest bearing
deposits:
<TABLE>
<CAPTION>
December 31,
1995 1994

<S> <C> <C>
Interest bearing checking accounts $ 32,658 $ 35,659
Savings accounts 12,699 13,113
Money market savings accounts 40,965 39,125
Time deposits ($100 thousand or more) 30,184 22,370
Other time deposits 51,500 39,466
Total $168,006 $149,733
</TABLE>
The following summary details interest expense on deposits:
<TABLE>
<CAPTION>
Year Ended December 31,
1995 1994 1993

<S> <C> <C> <C>
Interest bearing checking accounts $ 897 $ 891 $ 972
Savings accounts 427 395 355
Money market savings accounts 1,663 1,503 1,351
Time deposits ($100 thousand or more) 1,476 923 799
Other time deposits 2,720 1,368 1,239
Total $7,183 $5,080 $4,716
</TABLE>
At December 31, 1995, related parties had deposits with the Banks
consisting of time deposits ($100 thousand or more)
of $367; other time deposits of $825; demand deposits of $14,273
and savings deposits of $484. At December 31, 1994, related
parties had deposits with the Banks consisting of time deposits
($100 thousand or more) of $264; other time deposits of $1,696;
demand deposits of $8,269 and savings deposits of $666.

page 36

<S> <C> <C>
Securities sold under
agreement to repurchase $3,599 $3,497
Other short-term borrowings 451 1,488
Total $4,050 $4,985

Weighted average interest rate
at year-end 4.13% 4.36%

Weighted average interest
rate on amounts outstanding
during the year (based on
average of daily balances) 4.62% 3.30%
</TABLE>
Federal funds purchased and securities sold under agreements to
repurchase generally represented overnight borrowing
transactions. Other short-term borrowings consist of demand notes
owed to the U.S. Treasury.
At December 31, 1995 and 1994, securities sold under agreements
to repurchase had average interest rates of 4.24% and 2.99%,
respectively. Included in the balances of securities sold under
agreements to repurchase at December 31, 1995 and 1994, were
repurchase agreements to related parties of $1,427 and $1,976,
respectively.
Note 10. Accounting for Income Taxes
The components of income tax expense are as follows:
<TABLE>
<CAPTION>
Year Ended December 31,
1995 1994 1993
Current income tax expense:
<S> <C> <C> <C>
Federal $1,321 $1,098 $ 498
State 160 131 97
Total 1,481 1,229 595

Deferred income tax
expense (benefit):
Federal (59) 7 576
State (12) 1 92
Total (71) 8 668

Total $1,410 $1,237 $1,263
</TABLE>

page 37

Notes to Consolidated Financial Statements
For the Years Ended December 31, 1995, 1994 and 1993
South Alabama Bancorporation, Inc. and Subsidiaries
(Dollars and Shares in Thousands)

Total income tax expense differed from the amount computed using
the applicable statutory Federal income tax rate of
34 percent applied to pretax earnings for the following reasons:
<TABLE>
<CAPTION>
Year Ended December 31,
1995 1994 1993

<S> <C> <C> <C>
Income tax expense at statutory rate $1,502 $1,366 $1,239
Increase (decrease) resulting from:
Tax exempt interest (235) (281) (281)
Reduction of interest expense on debt
used to carry tax-exempt securities 25 19 18
State income tax, net of federal benefit 98 87 81
Other, net 20 46 206

Total $1,410 $1,237 $1,263

Effective tax rate 31.7% 30.8% 34.7%
</TABLE>
The tax effects of temporary differences that give rise to
deferred tax assets and liabilities at December 31, 1995 and 1994
are presented below:
<TABLE>
<CAPTION>
December 31,
1995 1994

<S> <C> <C>
Deferred tax assets:
Allowance for loan losses and other
real estate not currently deductible $677 $657
Accrued pension cost not currently
deductible 116 41
Unrealized loss on securities
available for sale 30
Other 150 118
Total deferred tax assets 943 846

Deferred tax liabilities:
Unrealized gain on securities
available for sale (339)

Differences between book and tax basis
of property (48) (84)
Other (94)
Total deferred tax liabilities (481) (84)
Net deferred tax asset $462 $762
</TABLE>
There was no valuation allowance during either 1995 or 1994.

page 38

Notes to Consolidated Financial Statements
For the Years Ended December 31, 1995, 1994 and 1993
South Alabama Bancorporation, Inc. and Subsidiaries
(Dollars and Shares in Thousands)

Note 11. Retirement Plans
The Company sponsors a defined benefit retirement plan which
covers all full-time employees who have met certain age and
length of service requirements. It is the Company's policy to
fund the retirement plans in amounts deductible for federal
income tax purposes. Plan assets consist of corporate debt
securities, common stock and U.S. Government securities. Charges
to operating expenses with respect to the retirement plans were
$227, $175 and $128 in 1995, 1994 and 1993, respectively, and
were comprised of the following:
<TABLE>
<CAPTION>
Year Ended December 31,
1995 1994 1993

<S> <C> <C> <C>
Service cost $214 $182 $138
Interest on projected benefit
obligation 141 128 108
Return on plan assets (132) (124) (106)
Net amortization and deferral 4 (11) (12)
Total expense $227 $175 $128
</TABLE>
The weighted-average discount rate and rate of increase in future
compensation levels used in determining the actuarial present
value of the projected benefit obligation, were 7% and 5%,
respectively, for 1995, 7% and 5%, respectively, for 1994, and 8%
and 5%, respectively, for 1993. The expected long-term rate of
return on plan assets was 8% for all three years.
The funding status of the plans is as follows:
<TABLE>
<CAPTION>
December 31,
1995 1994
<S> <C> <C>
Actuarial present value of
benefit obligations:
Vested benefit $1,378 $1,402
Non-vested benefits 74 134
Accumulated benefit obligation 1,452 1,536
Effect of future compensation 771 588
Projected benefit obligation 2,223 2,124
Plan assets at fair value 2,058 1,684
Projected benefit obligation
in excess of plan assets 165 440
Unrecognized prior service cost (40) (3)
Unrecognized net gain (loss) from
past experience different from
that assumed and effects of change
in assumptions 203 (30)
Unrecognized net obligation
being recognized over 28 years (31) (31)
Accrued pension costs $ 297 $ 376
</TABLE>

page 39

Notes to Consolidated Financial Statements
For the Years Ended December 31, 1995, 1994 and 1993
South Alabama Bancorporation, Inc. and Subsidiaries
(Dollars and Shares in Thousands)

Note 12. Stock Options
At December 31, 1995, 186 shares of the Company's common stock
were reserved for issuance under the Company's stock option plan.
Under the plan, options have been granted to certain key
employees for terms up to ten years at not less than the fair
market value of the shares at the date of grant.
A summary of stock option activity for the years ending December
31, 1995, 1994 and 1993 is as follows:
<TABLE>
<CAPTION>
Number Option Price
of Shares Per Share (Whole Dollars)

<S> <C> <C>
Outstanding, December 31, 1992 31 $5.125 to $10.125
Granted 8 $6.375
Outstanding, December 31, 1993 39 $5.125 to $12.875
Granted 50 $13.00 to $13.25
Outstanding, December 31, 1994 89 $5.125 to $13.25
Granted 38 $13.00
Exercised (3) $10.00

Outstanding, December 31, 1995 124
Exercisable, December 31, 1995 81
</TABLE>

Note 13. Regulatory Matters
The Company's principal source of funds for dividend payments is
dividends from the Banks. Dividends payable
by a bank in any year, without prior approval of the appropriate
regulatory body, are limited to the bank's net profits
(as defined) for that year combined with its net profits for the
two preceding years. The dividends, as of December 31, 1995, that
the Banks could declare, without the approval of regulators,
amounted to $6,710.

The Banks are also required to maintain minimum amounts of
capital to total "risk weighted"assets, as defined by the
banking regulators. At December 31, 1995, the Banks are required
to have minimum Tier I and Total capital ratios of 4.00% and
8.00%, respectively. The Mobile Bank's actual ratios at that date
were 9.22% and 10.28%, respectively. The Brewton Bank's ratios
were 13.53% and 14.21%, respectively. At December 31, 1995 the
Mobile Bank's leverage ratio was 9.97% and the Brewton Bank's
leverage ratio was 13.26%. The Federal Deposit Insurance
Corporation Improvement Act of 1994 provided further guidance as
to capital levels to be maintained by insured depository
institutions. Under these guidelines the capital levels of both
banks are considered to be "well capitalized".

page 40

Notes to Consolidated Financial Statements
For the Years Ended December 31, 1995, 1994 and 1993
South Alabama Bancorporation, Inc. and Subsidiaries
(Dollars and Shares in Thousands)

Note 14. Fair Value of Financial Instruments
SFAS No. 107, Disclosures about Fair Value of Financial
Instruments, requires disclosure of fair values information about
financial instruments, whether or not recognized in the statement
of condition, for which it is practicable to estimate that value.
In cases where quoted market prices are not available, fair
values are based on estimates using present value or other
valuation techniques. Those techniques are significantly affected
by the assumptions used, including the discount rate and
estimates of future cash flows. In that regard, the derived fair
value estimates cannot be substantiated by comparison to
independent markets and, in many cases, could not be realized in
immediate settlement of the instrument. The use of different
market assumptions and/or estimation methodologies may have a
material effect on the estimated fair value amounts. Also, the
fair value estimates presented herein are based on pertinent
information available to Management as of December 31,1995. Such
amounts have not been comprehensively revalued for purposes of
these financial statements since those dates and, therefore,
current estimates of fair value may differ significantly from the
amounts presented herein.

The following methods and assumptions were used by the Company in
estimating its fair values disclosures for financial instruments:

Investment Securities - Fair values for investment securities are
primarily based on quoted market prices. If a quoted market price
is not available, fair value is estimated using market prices for
similar securities.

Loans - For equity lines and other loans with short-term or
variable rate characteristics, the carrying value reduced by an
estimate for credit losses inherent in the portfolio is a
reasonable estimate of fair value. The fair value of all other
loans is estimated by discounting their future cash flows using
interest rates currently being offered for loans with similar
terms, reduced by an estimate of credit losses inherent in the
portfolio. The discount rates used are commensurate with the
interest rate and prepayment risks involved for the various types
of loans.

Deposits - The fair value disclosed for demand deposits (e.g.,
interest and non-interest bearing demand, savings and money
market savings) are, as required by SFAS No. 107, equal to the
amounts payable on demand at the reporting date (i.e., their
carrying amounts). Fair values for certificates of deposits are
estimated using a discounted cash flow calculation that applies
interest rates currently being offered on certificates to a
schedule of aggregated monthly maturities.

commitments to extend credit and standby letters of credit - The
value of these unrecognized financial instruments is estimated
based on the fee income associated with the commitments which, in
the absence of credit exposure, is considered to approximate
their settlement value. As no significant credit exposure exists
and because such fee income is not material to the Company's
financial statements at December 31, 1995, the fair value of
these commitments is not presented.

Many of the Company's assets and liabilities are short-term
financial instruments whose carrying amounts reported in the
statement of condition approximate fair value. These items
include cash and due from banks, interest-bearing bank balances,
federal funds sold and other short-term borrowing. The estimated
fair values of the Company's remaining on-balance sheet financial
instruments as of December 31, 1995 and 1994, are summarized
below.

<TABLE>
1995 1994
Estimated Estimated
Carrying Fair Carrying Fair
Value Value Value Value
<S> <C> <C> <C> <C>
Financial assets:
Investment securities
available for sale $ 40,752 $ 40,752 $ 19,572 $ 19,572
Investment securities
held to maturity 21,441 21,664 43,445 41,376
Loans, net of
allowance for
loan losses 144,147 140,612 133,821 130,473

Financial liabilities:
Deposits $210,092 $210,357 $185,842 $185,830
</TABLE>
SFAS No. 107 excludes certain financial instruments and all
non-financial instruments from its disclosure requirements. The
disclosures also do not include certain intangible assets, such
as customer relationships, deposit base intangibles and goodwill.
Accordingly, the aggregate fair value amounts presented do not
represent the underlying value of the Company.

page 41

Notes to Consolidated Financial Statements
For the Years Ended December 31, 1995, 1994 and 1993
South Alabama Bancorporation, Inc. and Subsidiaries
(Dollars and Shares in Thousands)

Note 15. Commitments and Contingencies
In the normal course of business there are outstanding
commitments and contingent liabilities, such as commitments to
extend credit, letters of credit and others, which are not
included in the consolidated financial statements. The financial
instruments involve, to varying degrees, elements of credit and
interest rate risk in excess of amounts recognized in the
financial statements. A summary of these commitments and
contingent liabilities is presented below.
<TABLE>
December 31,
<CAPTION>
1995 1994
<S> <C> <C>
Standby letters of credit $ 1,503 $ 1,111
Commitments to extend credit 38,345 25,673
</TABLE>
Commitments to extend credit are agreements to lend to a customer
as long as there is no violation of any condition established in
the contract. Commitments generally have fixed expiration dates
or other termination clauses and may require payment of a fee.
Since many of the commitments are expected to expire without
being drawn upon, the total commitment amounts do not necessarily
represent future cash requirements. The Company evaluates each
customer's creditworthiness on a case-by-case basis. The amount
of collateral obtained, if deemed necessary by the Company upon
extension of credit, is based on Management's credit evaluation
of the counter-party. Collateral held varies but may include
accounts receivable, inventory, property, plant, and equipment,
and income-producing commercial properties.
At December 31, 1995, the Company was under contract to lease
certain bank premises and equipment. The terms of these contracts
vary and are subject to certain changes at renewal. Future
minimum rental payments required under operating leases having
initial or remaining noncancelable terms in excess of one year as
of December 31, 1995 were not significant.
Rental expense under all operating leases amounted to $276, $239,
and $196 in 1995, 1994, and 1993, respectively.
The Company and its Banks are the subject of claims and disputes
arising in the normal course of business. Management, through
consultation with their legal counsel, is of the opinion that
these matters will not have a material impact on results of
operations.
Note 16. Non-Interest Expense
Components of other non-interest expense are as follows:
<TABLE>
<CAPTION>
Year Ended December 31,
1995 1994 1993
<S> <C> <C> <C>
Advertising $ 222 $ 247 $ 152
FDIC assessment 215 407 393
Stationery and supplies 231 218 153
Other 1,847 1,924 1,782
Total $2,515 $2,796 $2,480
</TABLE>
See notes to consolidated financial statements.

page 42

<TABLE>
<CAPTION>
Condensed Statements of Condition December 31,
1995 1994
ASSETS
<S> <C> <C>
Cash and short-term investments $ 200 $ 467
Investments 5
Investment in subsidiaries
- eliminated upon consolidation 27,817 25,601
Land 691
Other assets 95 37

Total $28,803 $26,110

LIABILITIES
Other liabilities $ 6 $ 6

SHAREHOLDERS' EQUITY
Preferred stock - no par value
Shares authorized - 500
Share outstanding - none
Common stock - $.01 par value
Shares authorized - 4,500
Shares outstanding -
3,002 in 1995 and 2,999 in 1994 30 30
Capital surplus 16,538 16,507
Net unrealized gain (loss) on
securities available for sale 558 (57)
Retained earnings 11,671 9,624

Total shareholders' equity 28,797 26,104

Total $28,803 $26,110
</TABLE>
<TABLE>
Condensed Statements of Operations

<CAPTION>
Year Ended December 31,
1995 1994 1993
<S> <C> <C> <C>
Cash dividends from
subsidiaries $1,460 $ 780 $ 694

Interest income 2 15
Securities gain 46
Loss on sale on
mutual funds (356)
Other income 1 8

Total income 1,507 790 353

Expenses - other 100 73 7

Income before
undistributed
income of
subsidiaries 1,407 717 346
Equity in
undistributed
earnings of
subsidiaries 1,600 2,065 3,045

Net Income $3,007 $2,782 $3,391

</TABLE>
<TABLE>
Condensed Statements of Cash Flows
<CAPTION>
Year Ended December 31,
1995 1994 1993
OPERATING ACTIVITIES
<S> <C> <C> <C>
Net income $3,007 $2,782 $3,391
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Equity in undistributed
earnings of subsidiaries (1,600) (2,065) (3,045)
Securities gain (46)
Loss on sale of
mutual funds 356
Other (58) (428) 2
Net cash provided by
operating activities 1,303 289 704

INVESTING ACTIVITIES
Sale of investment
securities available
for sale 50 200
Purchase of land (691)
Net cash provided by
(used in) investing
activities (641) 200

FINANCING ACTIVITIES
Proceeds from the issuance
of stock 31
Purchase and retirement of shares
Cash dividends (960) (780) (284)
Cost of issuance of stock (188)
Net cash used in financing
activities (929) (780) (472)

NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS (267) (291) 232

CASH AND CASH EQUIVALENTS AT
BEGINNING OF YEAR 467 758 526

CASH AND CASH EQUIVALENTS AT
END OF YEAR $ 200 $ 467 $ 758
</TABLE>

page 43

Exhibit 10.23
THE BANK OF MOBILE
CHANGE IN CONTROL COMPENSATION AGREEMENT

This Agreement dated as of the 14 day of November, 1995 by
and between The Bank of Mobile (the "Bank"), an Alabama banking
corporation having its principal place of business in Mobile,
Alabama and W. Bibb Lamar, Jr. (the "Executive").

RECITALS:

A. The Compensation Committee of the Board of Directors of
the Bank has recommended, and the Board of Directors has
approved, that the Bank enter into agreements with key executives
of the Bank designated from time to time by the Compensation
Committee which provide for compensation under certain
circumstances after a change in control.

B. Executive is a key executive of the Bank and has been
selected by the Compensation Committee to enter into this
Agreement.

C. If the Bank should become subject to any proposed or
threatened Change in Control (as hereinafter defined), the Board
of Directors of the Bank believes it imperative that the Bank and
the Board of Directors be able to rely upon Executive to continue
in his position and that the Bank be able to receive and rely
upon his advice, if requested, as to the best interests of the
Bank and its stockholders, without concern that he might be
distracted by the personal uncertainties and risks created by
such a proposal or threat.

D. If the Bank should receive any such proposal, Executive
may be called upon to assist in the assessment thereof, advise
management and the Board of Directors as to whether such proposal
would be in the best interests of the Bank and its stockholders,
and take such other actions above and beyond his regular duties
as the Board might determine to be appropriate.

NOW, THEREFORE, as assurance to the Bank that it will have
the continued dedication of Executive and the availability of his
advice and counsel notwithstanding the possibility, threat or
occurrence of an effort to take over control of the Bank, and
as an inducement to Executive to remain in the employ of the
Bank, and for other good and valuable consideration, the Bank and
Executive agree as follows:

1. Services During Certain Events. In the event any
person, firm or corporation unaffiliated with the Bank begins a
tender or exchange offer, circulates a proxy to stockholders, or
takes other steps to effect a Change in Control (as hereinafter
defined), Executive agrees that he will not voluntarily leave the
employ of the Bank on less than 4 months written notice to the
Chairman of the Board or Chairman of the Executive Committee of
the Bank, will render the services expected of his position and
will act in all things related to the possible Change in Control
in the manner he believes in good faith to be in the best
interests of the shareholders of the Bank until such person, firm
or corporation has abandoned or terminated his or its efforts to
effect a Change in Control or until a Change in Control has
occurred.

2. Termination Following Change in Control. Except as
provided in Section 4, the Bank will provide or cause to be
provided to Executive the rights and benefits described in
Section 3 in the event that Executive's employment is terminated
at any time within two years following a Change in Control (as
such term is defined in this Section 2) under the circumstances
stated in (a) or (b) below:

(a) by the Bank for reasons other than for "cause" (as
such term is defined in Section 4) or other than as a consequence
of Executive's death, permanent disability or attainment of the
normal retirement date as provided under the Bank's pension plan
(the "Retirement Plan") as in effect immediately preceding such
date ("Normal Retirement Date"); or

(b) by Executive following the occurrence of any of
the following events:

(i) the assignment of Executive to any duties or
responsibilities that are inconsistent with his
position, duties, responsibilities or status
immediately preceding such Change in Control or a
change in his reporting responsibilities or titles in
effect at such time, in either case resulting in
reduction of his responsibilities or position;

(ii) the reduction of Executive's annual
compensation, meaning thereby the fair market value of
all remuneration paid to the Executive by the Bank
during the immediately preceding calendar year,
including, without limitation, deferred compensation
and other forms of incentive compensation awards,
coverage under any employee benefit plan (such
as a pension, thrift, medical, dental, life insurance
or long-term disability plan) and other perquisites;

(iii)the transfer of Executive to a location
requiring a change in his residence or a material
increase in the amount of travel normally required of
Executive in connection with his employment.

For purposes of this Agreement, a "Change in Control" is
hereby defined to be: (1) a merger, consolidation or other
corporate reorganization of the Bank or its parent company in
which either the Bank or its parent company fails to survive; (2)
disposition by the Bank's parent company of the Bank; (3) the
beneficial ownership by one person or a closely related group of
persons of as much as 40% of the outstanding voting stock of the
Bank's parent company, unless the acquisition of stock resulting
in such ownership by such person or related group had been
approved in advance by the Board of Directors of the Bank or the
parent company; or (4) as may otherwise be defined by the Board
of Directors from time to time.

3. Rights and Benefits Upon Termination. In the event of
the termination of Executive's employment under any of the
circumstances set forth in Section 2 hereof ("Termination"), the
Bank agrees to provide or cause to be provided to Executive the
following rights and benefits:

(a) Salary and Other Payments at Termination.
Executive shall be entitled to receive payment in cash in the
amount of three times Executive's Average Annual Earnings, as
such term is defined in this Section 3(a), during the most recent
three year fiscal periods (or the period during which the
Executive has been employed by the Bank if less than three
years.) However, if such amount exceeds limits provided in the
then existing provisions of the Internal Revenue Code
for the imposition of tax penalties on such payments, the amount
shall be reduced to the highest amount allowed to avoid such
penalties. At the election of Employee, payment shall be made in
equal monthly payments over a three-year period beginning
with the month following Termination, or payment shall be made in
a lump sum. Any lump sum payment request must be made in writing
at least six months prior to Termination.

If Executive shall die prior to the time all payments which
may otherwise have been due to Executive, under this Section 3(a)
or otherwise in this agreement, have been made, then, as soon as
practicable after his death and in no event later than 3 months
after the appointment of Executive's personal representative, the
Bank shall pay in a lump sum in cash all sums not distributed to
Executive prior to his death. Payment shall be made to the
beneficiary named as such under the life insurance plan
maintained by the Bank on the date of Executive's death. If no
such beneficiary is named, such sums shall be paid to Executive's
personal representative. No reduction to present value of any
such sums shall be made.

For purposes of this Agreement, "Annual Earnings" shall mean
the amounts earned by Executive for personal service rendered to
the Bank and its affiliates as reportable on Treasury Department
Form W-2, including bonuses, and excluding the following: (1)
moving and educational expenses, (2) income included under
Section 79 of the Internal Revenue Code of 1986, as amended and
(3) income imputed to Executive from personal use of employer
owned automobiles and employer paid club dues. Earnings shall
not include any income attributable to grants of and dividends
on shares awarded under any stock option plan.

(b) Insurance and Other Special Benefits. During the
three-year severance pay period, and if the Bank may do so under
the terms of its benefit plans existing at the time of
Termination, Executive shall continue to be covered by the life
insurance, medical insurance, and accident and disability
insurance plans of the Bank and its affiliates or any successor
plan or program in effect at or after Termination for employees
in the same class or category as was Executive prior to his
Termination, subject to the terms of such plans and to
Executive's making any payments therefor required of employees in
the same class or category as was Executive prior to his
Termination. In the event Executive is ineligible to continue to
be so covered under the terms of any such benefit plan or
program, Bank shall have no further obligation. Anything herein
to the contrary notwithstanding, if during such period Executive
should enter into the employ of another company or firm which
provides substantially similar benefit coverage, Executive's
participation in the comparable benefits provided by the Bank
either directly or through such other sources shall cease.
Nothing contained in this paragraph shall be deemed to require or
permit termination or restriction of any of Executive's coverage
under any plan or program of the Bank or any of its affiliates,
or any successor plan or program, to which Executive is entitled
under the terms of such plan or program.

(c) Automobile and Club Dues. Executive shall be
entitled to purchase the automobile then furnished to him by the
Bank for a price equal to 50% of its then book value on the books
of the Bank. Also, Bank will pay to Executive during the
three-year severance pay period an amount equal to the country
club dues then being paid on his behalf by the Bank, but not to
exceed $150 per month.

(d) Other Benefit Plans. The specific arrangements
referred to in this Section 3 are not intended to exclude
Executive's participation in other benefit plans in which
Executive currently participates or which are or may become
available to executive personnel generally in the class or
category of Executive or to preclude other compensation or
benefits as may be authorized by the Board of Directors from
time to time.

(e) No Duty to Mitigate. Executive's entitlement to
benefits hereunder shall not be governed by any duty to mitigate
his damages by seeking further employment nor, except as
specifically provided above in paragraph 3(b), be offset by any
compensation or benefit which he may receive from future
employment.

4. Conditions to the Obligations of the Bank. The Bank
shall have no obligation to provide or cause to be provided to
Executive the rights and benefits described in Section 3 hereof
if either of the following events shall occur:

(a) Termination for Cause. The Bank shall terminate
Executive's employment for "cause". For purposes of this
Agreement, termination of employment for "cause" shall mean
termination because of fraud, misappropriation of or intentional
damage to the property of the Bank or the commission of a felony
by the Executive;

(b) Resignation as Director or Officer. Executive
shall fail, promptly after Termination and upon receiving a
written request to do so, to resign as a director and/or officer
of the Bank and each affiliate of the Bank of which he is then
serving as a director and/or officer.

5. Confidentiality; Non-Solicitation; Cooperation;
Consultancy.

(a) Confidentiality. Executive agrees that following
Termination he will not without the prior written consent of the
Bank disclose to any person, firm or corporation any confidential
information of the Bank or its affiliates which is now known to
him or which hereafter (whether before or after his Termination)
may become known to him as a result of his employment or
association with the Bank and which could be helpful to a
competitor; provided, however, that the foregoing shall not
apply to confidential information which becomes publicly
disseminated by means other than a breach of this Agreement.

(b) Cooperation. Executive agrees that following
Termination he will furnish such information and render such
assistance and cooperation as may reasonably be requested in
connection with any litigation or legal proceedings concerning
the Bank or any of its affiliates (other than any legal
proceedings concerning Executive's employment). In connection
with such cooperation, the Bank will pay or reimburse Executive
for all reasonable expenses incurred in cooperating with such
requests.

(c) Remedies for Breach. It is recognized that
damages in the event of breach of this Section 5 by Executive
would be difficult, if not impossible, to ascertain, and it is
therefore agreed that the Bank, in addition to and without
limiting any other remedy or right it may have, shall have the
right to an injunction or other equitable relief in any court of
competent jurisdiction enjoining any such breach, and Executive
hereby waives any and all defenses he may have on the ground of
lack of jurisdiction or competence of the court to grant such an
injunction or other equitable relief. The existence of this
right shall not preclude the Bank from pursuing any other rights
and remedies at law or in equity which the Bank may have.

6. Term of Agreement. This Agreement shall terminate on
December 31, 1996; provided, however, that this Agreement shall
automatically renew for successive one-year terms unless the Bank
notifies Executive in writing at least 90 days prior to a
December 31 expiration date that it does not desire to renew the
Agreement for an additional term; and provided further, however,
that such notice shall not be given and if given shall have no
effect (i) within two years after a Change in Control or (ii)
during any period of time when the Bank has reason to believe
that any third person has begun a tender or exchange offer,
circulated a proxy to stockholders, or taken other steps or
formulated plans to effect a Change in Control, such period of
time to end when, in the opinion of the Compensation Committee,
the third person has abandoned or terminated his efforts or plans
to effect a Change in Control.

7. Expenses. The Bank shall pay or reimburse Executive
for all costs and expenses, including, without limitation, court
costs and attorney's fees, incurred by Executive as a result of
any claim, action or proceeding by Executive against the Bank
arising out of, or challenging the validity or enforceability of,
this Agreement or any provision hereof.

8. Miscellaneous.

(a) Assignment. No right, benefit or interest
hereunder shall be subject to assignment, anticipation,
alienation, sale, encumbrance, charge, pledge, hypothecation or
set-ff in respect of any claim, debt or obligation, or to
execution, attachment, levy or similar process; provided,
however, that Executive may assign any right, benefit or interest
hereunder if such assignment is permitted under the terms
of any plan or policy of insurance or annuity contract governing
such right, benefit or interest.

(b) Construction of Agreement. Nothing in this
Agreement shall be construed to amend any provision of any plan
or policy of the Bank other than as specifically stated herein.
This Agreement is not, and nothing herein shall be deemed to
create an employment contract between Executive and the Bank or
any of its subsidiaries.

(c) Inurement. This Agreement shall be binding upon
and inure to the benefit of the Bank and the Executive and their
respective heirs, executors, administrators, successors and
assigns.

(d) Nature of Obligation. The Bank intends that its
obligations hereunder be construed in the nature of severance
pay. The Bank's obligations under Section 3 are absolute and
unconditional and shall not be affected by any circumstance,
including, without limitation, any right of offset, counterclaim,
recoupment, defense, or other right which the Bank may have
against the Executive or others. All amounts payable by the Bank
hereunder shall be paid without notice or demand.

(e) Choice of Law. The Agreement shall be governed
and construed in accordance with the laws of the State of
Alabama.

(f) Invalidity. In the event that any one or more
provisions of this Agreement shall, for any reason, be held
invalid, illegal or unenforceable in any manner, such invalidity,
illegality or unenforceability shall not affect any other
provision of this Agreement.

In Witness Whereof, Executive has hereunto set his hand and
seal and the Bank has caused this Agreement to be executed by its
officers thereunto duly authorized as of the 14 day of November,
1995.

/s/W. Bibb Lamar, Jr. (SEAL)
W. BIBB LAMAR, JR.

ATTEST: THE BANK OF MOBILE

Pamela Watson BY:/s/F. Michael Johnson
Its:Vice-President Its:Executive Vice-President

Exhibit 10.24
FIRST NATIONAL BANK OF BREWTON
CHANGE IN CONTROL COMPENSATION AGREEMENT

This Agreement dated as of the 20 day of November, 1995 by
and between First National Bank of Brewton (the "Bank"), a
national banking association having its principal place of
business in Brewton, Alabama and J. Stephen Nelson (the
"Executive").

RECITALS:

B. Executive is a key executive of the Bank and has been
selected by the Compensation Committee to enter into this
Agreement.

(b) by Executive following the occurrence of any of
the following events:

(i) the assignment of Executive to any duties or
responsibilities that are inconsistent with his
position, duties, responsibilities or status immediately
preceding such Change in Control or a change in his reporting
responsibilities or titles in effect at such time, in either case
resulting in reduction of his responsibilities or position;

(ii) the reduction of Executive's annual
compensation, meaning thereby the fair market value of all
remuneration paid to the Executive by the Bank during the
immediately preceding calendar year, including, without
limitation, deferred compensation and other forms of incentive
compensation awards, coverage under any employee benefit plan
(such as a pension, thrift, medical, dental, life insurance or
long-term disability plan) and other perquisites;

(iii) the transfer of Executive to a location
requiring a change in his residence or a material increase in the
amount of travel normally required of Executive in connection
with his employment.

(a) Salary and Other Payments at Termination.
Executive shall be entitled to receive payment in cash in the
amount of three times Executive's Average Annual Earnings, as
such term is defined in this Section 3(a), during the most recent
three year fiscal periods (or the period during which the
Executive has been employed by the Bank if less than three
years.) However, if such amount exceeds limits provided in the
then existing provisions of the Internal Revenue Code for the
imposition of tax penalties on such payments, the amount shall be
reduced to the highest amount allowed to avoid such penalties.
At the election of Employee, payment shall be made in equal
monthly payments over a three-year period beginning with the
month following Termination, or payment shall be made in a lump
sum. Any lump sum payment request must be made in writing at
least six months prior to Termination.

5. Confidentiality; Non-Solicitation; Cooperation;
Consultancy.

7. Expenses. The Bank shall pay or reimburse Executive
for all costs and expenses, including, without limitation, court
costs and attorney's fees, incurred byExecutive as a result of
any claim, action or proceeding by Executive against the Bank
arising out of, or challenging the validity or enforceability of,
this Agreement or any provision hereof.

8. Miscellaneous.

(c) Inurement. This Agreement shall be binding upon
and inure to the benefit of the Bank and the Executive and their
respective heirs, executors, administrators, successors and
assigns.

(e) Choice of Law. The Agreement shall be governed
and construed in accordance with the laws of the State of
Alabama.

In Witness Whereof, Executive has hereunto set his hand and
seal and the Bank has caused this Agreement to be executed by its
officers thereunto duly authorized as of the 20 day of November,
1995.

/s/J. Stephen Nelson (SEAL)
J. STEPHEN NELSON

ATTEST: FIRST NATIONAL BANK OF BREWTON

Mary M. Thompson BY:/s/Earl H. Weaver
Its:Vice President Its:Director

Exhibit 10.25
CHANGE IN CONTROL COMPENSATION AGREEMENT

This Agreement dated as of the _____ day of _______, 1995 by
and between __________________________________ (the "Bank"), a
______________ banking ________________ having its principal
place of business in ____________, Alabama and
_____________________________ (the "Executive").

RECITALS:

B. Executive is a key executive of the Bank and has been
selected by the Compensation Committee to enter into this
Agreement.

NOW, THEREFORE, as assurance to the Bank that it will have
the continued dedication of Executive and the availability of his
advice and counsel notwithstanding the possibility, threat or
occurrence of an effort to take over control of the Bank, and as
an inducement to Executive to remain in the employ of the Bank,
and for other good and valuable consideration, the Bank and
Executive agree as follows:

1. Services During Certain Events. In the event any
person, firm or corporation unaffiliated with the Bank begins a
tender or exchange offer, circulates a proxy to stockholders, or
takes other steps to effect a Change in Control (as hereinafter
defined), Executive agrees that he will not voluntarily leave the
employ of the Bank on less than 4 months written notice to the
Chairman of the Board or Chairman of the Executive Committee of
the Bank, will render the services expected of his position and
will act in all things related to the possible Change in Control
in the manner he believes in good faith to be in the best
interests of the shareholders of the Bank until such person,
firm or corporation has abandoned or terminated his or its
efforts to effect a Change in Control or until a Change in
Control has occurred.

(b) by Executive following the occurrence of any of
the following events:

(i) the assignment of Executive to any duties or
responsibilities that are inconsistent with his position, duties,
responsibilities or status immediately preceding such Change in
Control or a change in his reporting responsibilities or titles
in effect at such time, in either case resulting in reduction of
his responsibilities or position;

(ii) the reduction of Executive's annual
compensation, meaning thereby the fair market value of all
remuneration paid to the Executive by the Bank during the
immediately preceding calendar year, including, without
limitation, deferred compensation and other forms of incentive
compensation awards, coverage under any employee benefit plan
(such as a pension, thrift, medical, dental, life insurance or
long-term disability plan) and other perquisites;

(iii) the transfer of Executive to a location
requiring a change in his residence or a material increase in the
amount of travel normally
required of Executive in connection with his
employment.

For purposes of this Agreement, a "Change in Control" is
hereby defined to be: (1) a merger, consolidation or other
corporate reorganization of the Bank or its parent company in
which either the Bank or its parent company fails to survive; (2)
disposition by the Bank's parent company of the Bank; (3) the
beneficial ownership by one person or a closely related group of
persons of as much as 40% of the outstanding voting stock
of the Bank's parent company, unless the acquisition of stock
resulting in such ownership by such person or related group had
been approved in advance by the Board of Directors of the Bank or
the parent company; or (4) as may otherwise be defined by the
Board of Directors from time to time.

(a) Salary and Other Payments at Termination.
Executive shall be entitled to receive payment in cash in the
amount of one and one-half times Executive's Average Annual
Earnings, as such term is defined in this Section 3(a), during
the most recent three year fiscal periods (or the period during
which the Executive has been employed by the Bank if less than
three years.) However, if such amount exceeds limits provided in
the then existing provisions of the Internal Revenue Code for the
imposition of tax penalties on such payments, the amount shall be
reduced to the highest amount allowed to avoid such penalties.
At the election of Employee, payment shall be made in equal
monthly payments over an eighteen (18) month period beginning
with the month following Termination, or payment shall be made in
a lump sum. Any lump sum payment request must be made in writing
at least six months prior to Termination.

(b) Insurance and Other Special Benefits. During the
eighteen month severance pay period, and if the Bank may do so
under the terms of its benefit plans existing at the time of
Termination, Executive shall continue to be covered by the
life insurance, medical insurance, and accident and disability
insurance plans of the Bank and its affiliates or any successor
plan or program in effect at or after Termination for employees
in the same class or category as was Executive prior to his
Termination, subject to the terms of such plans and to
Executive's making any payments therefor required of employees in
the same class or category as was Executive prior to his
Termination. In the event Executive is ineligible to continue to
be so covered under the terms of any such benefit plan or
program, Bank shall have no further obligation. Anything herein
to the contrary notwithstanding, if during such period Executive
should enter into the employ of another company or firm which
provides substantially similar benefit coverage, Executive's
participation in the comparable benefits provided by the Bank
either directly or through such other sources shall cease.
Nothing contained in this paragraph shall be deemed to require or
permit termination or restriction of any of Executive's coverage
under any plan or program of the Bank or any of its affiliates,
or any successor plan or program, to which Executive is entitled
under the terms of such plan or program.

(c) Other Benefit Plans. The specific arrangements
referred to in this Section 3 are not intended to exclude
Executive's participation in other benefit plans in which
Executive currently participates or which are or may become
available to executive personnel generally in the class or
category of Executive or to preclude other compensation or
benefits as may be authorized by the Board of Directors from time
to time.

(d) No Duty to Mitigate. Executive's entitlement to
benefits hereunder shall not be governed by any duty to mitigate
his damages by seeking further employment nor, except as
specifically provided above in paragraph 3(b), be offset by any
compensation or benefit which he may receive from future
employment.

(b) Resignation as Director or Officer. Executive
shall fail, promptly after Termination and upon receiving a
written request to do so, to resign as a director
and/or officer of the Bank and each affiliate of the Bank of
which he is then serving as a director and/or officer.

5. Confidentiality; Non-Solicitation; Cooperation;
Consultancy.

(a) Confidentiality. Executive agrees that following
Termination he will not without the prior written consent of the
Bank disclose to any person, firm or corporation any confidential
information of the Bank or its affiliates which is now known to
him or which hereafter (whether before or after his Termination)
may become known to him as a result of his employment or
association with the Bank and which could be helpful to a
competitor; provided, however, that the foregoing shall not apply
to confidential information which becomes publicly disseminated
by means other than a breach of this Agreement.

8. Miscellaneous.

(a) Assignment. No right, benefit or interest
hereunder shall be subject to assignment, anticipation,
alienation, sale, encumbrance, charge, pledge, hypothecation
or set-ff in respect of any claim, debt or obligation, or to
execution, attachment, levy or similar process; provided,
however, that Executive may assign any right, benefit or
interest hereunder if such assignment is permitted under the
terms of any plan or policy of insurance or annuity contract
governing such right, benefit or interest.

(b) Construction of Agreement. Nothing in this
Agreement shall be construed to amend any provision of any plan
or policy of the Bank other than as specifically stated herein.
This Agreement is not, and nothing herein shall be deemed
to create an employment contract between Executive and the Bank
or any of its subsidiaries.

(c) Inurement. This Agreement shall be binding upon
and inure to the benefit of the Bank and the Executive and their
respective heirs, executors, administrators, successors and
assigns.

(e) Choice of Law. The Agreement shall be governed
and construed in accordance with the laws of the State of
Alabama.

In Witness Whereof, Executive has hereunto set his hand and
seal and the Bank
has caused this Agreement to be executed by its officers
thereunto duly authorized as of
the ____ day of _____________________, 1995.

(SEAL)

ATTEST:

BY:
Its: Its:

SCHEDULE OF SUBSTANTIALLY IDENTICAL
CHANGE IN CONTROL COMPENSATION CONTRACTS

Pursuant to Regulation 229.601, Instruction 2, the
registrant has filed a form of the six Change in Control
Compensation Contracts (in addition to the similar contracts
filed as Exhibits 10.23 and 10.24) entered into with certain
officers of The Bank of Mobile and First National Bank, Brewton,
respectively. The contracts are substantially identical in all
material respects to the form filed, except that they were
entered into with the following persons, as of the dates and
covering the respective amounts of salary shown:

Bank Officer Compensation

The Bank of Mobile:
(Dated as of 11-14-95)

F. Michael Johnson 1.5 times Average Annual Earnings
Percy C. Fountain 1.5 times Average Annual Earnings
Bruce C. Finley 1.0 times Average Annual Earnings
Ray H. Miller, III 0.5 times Average Annual Earnings

First National Bank, Brewton:
(Dated as of 11-20-95)

W. Gaillard Bixler 1.5 times Average Annual Earnings
Dan Britton 1.5 times Average Annual Earnings