RESOURCE BANCSHARES MORTGAGE GROUP INC, DEF 14A, 2000-04-11

RESOURCE BANCSHARES MORTGAGE GROUP INC
DEF 14A, 2000-04-11
MORTGAGE BANKERS & LOAN CORRESPONDENTS

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<PAGE> 1

SCHEDULE 14A
(RULE 14A-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )

Filed by the Registrant [X]

Filed by a Party other than the Registrant [ ]

Check the appropriate box:

<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>

Resource Bancshares Mortgage Group, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required.

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

(1) Title of each class of securities to which transaction applies:

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

(2) Aggregate number of securities to which transaction applies:

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

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):

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

(4) Proposed maximum aggregate value of transaction:

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

(5) Total fee paid:

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

[ ] Fee paid previously with preliminary materials:

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

[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

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

(2) Form, Schedule or Registration Statement No.:

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

(3) Filing Party:

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

(4) Date Filed:

------------------------------------------------------------------------
<PAGE> 2

RESOURCE BANCSHARES MORTGAGE GROUP, INC.
7909 PARKLANE ROAD
COLUMBIA, SC 29223

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

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 3, 2000

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

TO THE SHAREHOLDERS:

NOTICE IS HEREBY GIVEN that the annual meeting of shareholders of Resource
Bancshares Mortgage Group, Inc. (the "Company") will be held at the offices of
King & Spalding, 191 Peachtree Street NE, Atlanta, Georgia 30303, on Wednesday,
May 3, 2000 at 11:00 a.m., E.D.T. for the following purposes:

1. To elect four directors, two for three year terms, one for a two
year term and one for a one year term;

2. To approve an amendment to the Stock Investment Plan of the
Company; and

3. To conduct such other business as properly may come before the
meeting and any adjournment or adjournments thereof.

The Board of Directors has fixed the close of business on March 6, 2000, as
the record date for the determination of shareholders entitled to notice of and
to vote at the Annual Meeting or any adjournment or adjournments thereof.

We hope that you will be able to attend the meeting. However, whether or
not you plan to attend, you are urged to sign, date and return the enclosed
proxy. The proxy may be revoked at any time prior to its exercise and, if you
attend the meeting, you may vote in person.

/s/ Douglas K. Freeman

Douglas K. Freeman
Chief Executive Officer
Columbia, South Carolina
April 11, 2000

IMPORTANT NOTICE
PLEASE SIGN, DATE AND MAIL YOUR PROXY PROMPTLY
<PAGE> 3

RESOURCE BANCSHARES MORTGAGE GROUP, INC.
7909 PARKLANE ROAD
COLUMBIA, SOUTH CAROLINA 29223

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

PROXY STATEMENT

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

APRIL 11, 2000

The accompanying proxy is solicited by the Board of Directors for use at
the annual meeting of shareholders (the "Annual Meeting") of Resource Bancshares
Mortgage Group, Inc. (the "Company") to be held at the offices of King &
Spalding, 191 Peachtree Street NE, Atlanta, Georgia 30303, on Wednesday, May 3,
2000, at 11:00 a.m., E.D.T., and at any adjournment or adjournments thereof.

At the Annual Meeting, the shareholders of the Company will be asked to
consider and vote upon the election of four directors and to approve an
amendment to the Company's Stock Investment Plan.

This proxy statement and the form of proxy are first being mailed to the
Company's shareholders on or about April 11, 2000.

PROXIES

The accompanying form of proxy is for use at the Annual Meeting. A
shareholder may use this proxy if he is unable to attend the meeting in person
or if he wishes to have his shares voted by proxy even if he attends the
meeting. The proxy may be revoked by the person giving it any time before the
proxy is exercised by giving written notice to the Company's Secretary, or by
submitting a proxy having a later date, or by such person appearing at the
meeting and electing to vote in person. All shares represented by valid proxies
received pursuant to this solicitation, and not revoked prior to their exercise,
will be voted in the manner specified therein. If no specification is made in
the proxy, the proxy will be voted "FOR" the election of all the nominees for
directors listed herein and "FOR" approval of the amendment to the Company's
Stock Investment Plan. The Board of Directors is not aware of any other matters
which may be presented for action at the meeting, but if other matters do come
properly before the meeting it is intended that shares represented by proxies in
the accompanying form will be voted by the persons named in the proxy in
accordance with their best judgment.

COSTS OF SOLICITATION

The Company will bear the costs of solicitation of proxies from its
shareholders. Solicitation of proxies may be made in person, by mail or by
telephone by officers, directors and regular employees of the Company who will
not be specially compensated in such regard. Nominees, fiduciaries and other
custodians will be requested to forward solicitation materials to the beneficial
owners and secure their voting instructions, if necessary, and will be
reimbursed for the reasonable expenses incurred in sending proxy materials to
the beneficial owners.

RECORD DATE AND VOTING RIGHTS

The Board of Directors of the Company has fixed the close of business on
March 6, 2000, as the record date for the determination of shareholders entitled
to receive notice of and to vote at the Annual Meeting. As of March 6, 2000,
there were a total of 19,168,376 shares of the Company's common stock, par value
$.01 per share (the "Common Stock"), outstanding and entitled to vote at the
Annual Meeting. These shares were held by approximately 630 holders of record.
Each shareholder is entitled to one vote on each matter to come before the
meeting for each share of Common Stock held of record by such shareholder. The
presence in person or by proxy of the holders of a majority of the shares of
Common Stock issued and outstanding as of the record date and entitled to vote
at the Annual Meeting is necessary to constitute a quorum. Abstentions and
broker non-votes will be counted for the purpose of establishing a quorum.
Broker non-votes, however, are
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<PAGE> 4

not counted as shares present and entitled to vote with respect to any matter on
which the broker has expressly not voted. Thus, broker non-votes will not affect
the outcome of any matter voted upon at the Annual Meeting. Directors are
elected by a plurality of the votes cast by the holders of shares of Common
Stock at a meeting at which a quorum is present. "Plurality" means that the
individuals who receive the largest number of "For" votes are elected as
directors up to the maximum number of directors to be chosen at the meeting. In
order for the amendment to the Stock Investment Plan to be approved, a majority
of the total votes cast at the Annual Meeting by the holders of Common Stock
present (in person or by proxy) and entitled to vote on that matter must vote
"For" approval. Consequently, abstentions will have the same effect as a "No"
vote.

BENEFICIAL OWNERSHIP

BENEFICIAL OWNERS OF FIVE PERCENT OR MORE OF THE COMMON STOCK

The following table sets forth the only shareholders which, to the
knowledge of management of the Company, were beneficial owners of five percent
or more of the outstanding shares of Common Stock as of March 6, 2000. The
shareholdings reported are based on copies of Schedules 13D and 13G and
amendments thereto received by the Company.

<TABLE>
<CAPTION>
SOLE SHARED SOLE SHARED
NAME AND ADDRESS VOTING VOTING DISPOSITIVE DISPOSITIVE
OF BENEFICIAL OWNER POWER POWER POWER POWER PERCENT OF CLASS
- ------------------- --------- --------- ----------- ----------- ----------------
<S> <C> <C> <C> <C> <C>
Amelia Family Trust Company........ 1,178,993 -- 1,178,993 -- 6.15%
as Trustee for Trust u/a/d August
22, 1969 of William B. Ziff, Jr.
577 Chestnut Ridge Road
Woodcliff Lake, New Jersey 07675

Dimensional Fund Advisors Inc...... 1,394,902 -- 1,394,902 -- 7.28%
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401

Wallace R. Weitz & Company......... 3,438,636 -- 3,438,636 -- 17.94%
1125 South 103 Street, Suite 600
Omaha, Nebraska 68124-6008

Wellington Management Company,
LLP.............................. -- 1,074,700 -- 1,636,800 8.54%
75 State Street
Boston, Massachusetts 02109
</TABLE>

2
<PAGE> 5

STOCK OWNERSHIP OF THE COMPANY'S DIRECTORS, NOMINEES AND EXECUTIVE OFFICERS

The following table sets forth as of March 6, 2000, the number of shares of
the Company's Common Stock beneficially owned by current directors, nominees for
election as director, named executive officers and all directors and current
executive officers of the Company as a group.

<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT OF
NAME OWNERSHIP(1) CLASS(1)
- ---- ------------ ----------
<S> <C> <C>
Stuart M. Cable(2).......................................... 46,941 *
Douglas K. Freeman(2)....................................... 220,000 1.15 %
Boyd M. Guttery(2).......................................... 42,746 *
David W. Johnson, Jr.(2).................................... 777,346 3.96 %
Robin C. Kelton(2).......................................... 50,320 *
Edward J. Sebastian(2),(3).................................. 584,455 3.00 %
John O. Wolcott(2).......................................... 35,526 *
Richard M. Duncan(2),(3).................................... 135,989 *
Steven F. Herbert(2)........................................ 91,621 *
Larry W. Reed(2)............................................ 32,938 *
All directors and executive officers as a group (9
persons).................................................. 1,433,427 7.19 %
</TABLE>

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

* Signifies less than one percent
(1) Assumes the exercise by such person of all options exercisable as of March
6, 2000, or within 60 days thereafter. Each person exercises sole voting
and sole investment power with respect to the shares shown as owned by him
except as otherwise indicated by footnote.
(2) Twenty thousand of the shares of Common Stock shown as owned by Mr.
Freeman, 32,523 of the shares of Common Stock shown as owned by each of
Messrs. Cable, Guttery and Wolcott; 6,000 of the shares of Common Stock
shown as owned by Mr. Kelton; 450,655 of the shares of Common Stock shown
as owned by Mr. Johnson; 288,525 of the shares of Common Stock shown as
owned by Mr. Sebastian; 100,891 of the shares of Common Stock shown as
owned by Mr. Duncan; 60,422 of the shares of Common Stock shown as owned by
Mr. Herbert and 21,420 of the shares of Common Stock shown as owned by Mr.
Reed represent shares subject to options exercisable as of March 6, 2000,
or within 60 days thereafter.
(3) The shares of Common Stock shown as owned by Mr. Sebastian include 122,844
shares owned by members of his immediate family and the shares of Common
Stock shown as owned by Mr. Duncan include 350 shares owned by members of
his immediate family.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Pursuant to Section 16 of the Securities Exchange Act of 1934, directors
and executive officers of the Company and beneficial owners of 10% or more of
the Common Stock are required to file reports with the Securities and Exchange
Commission indicating their holdings of and transactions in the Common Stock. To
the Company's knowledge, based solely on a review of the copies of such reports
furnished to the Company and written representations that no other reports were
required, all such persons have complied with all filing requirements with
respect to 1999, except Mr. Cable, who filed late one report covering one
transaction.

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<PAGE> 6

CUMULATIVE SHAREHOLDER RETURN

The following graph compares the percentage change in the Company's total
shareholder return on the Common Stock with the cumulative total return of (i) a
broad equity market index ("NASDAQ Composite"), (ii) the MBA Stock Index, a peer
group index prepared by the Mortgage Bankers Association of America (the "MBA
Peer Group") that includes publicly traded, non-portfolio mortgage lenders that
originate and service mortgages and (iii) the Nasdaq Financial Index, a
financial market index (the "NASDAQ Financial"). The Mortgage Bankers
Association of America is no longer compiling the MBA Peer Group Index as only
four companies remain in the Index. Therefore, beginning next year, the Company
will compare its performance with the NASDAQ Financial Group instead of the MBA
Peer Group. As required, comparisons with both indices are shown in the year of
change. This performance graph represents the period from December 31, 1994
through December 31, 1999.

RESOURCE BANCSHARES MORTGAGE GROUP, INC. (1)(2)(3)(4)(5)(6)
VS. NASDAQ COMPOSITE
VS. MBA PEER GROUP
VS. NASDAQ FINANCIAL

CUMULATIVE SHAREHOLDER RETURN SINCE DECEMBER 31, 1994

<TABLE>
<CAPTION>
RBMG NASDAQ COMPOSITE MBA PEER GROUP NASDAQ FINANCIAL
---- ---------------- -------------- ----------------
<S> <C> <C> <C> <C>
12/31/94 100.0 100.0 100.0 100.0
12/31/95 217.7 152.6 126.4 69.4
12/31/96 233.0 187.6 158.2 208.2
12/31/97 280.0 230.2 231.4 318.5
12/31/98 284.3 323.5 305.1 309.1
12/31/99 77.8 600.4 159.3 305.7
</TABLE>

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

(1) Total return assumes an initial investment of $100 on December 31, 1994, and
reinvestment of dividends.
(2) The companies included in the MBA Peer Group for the year ended December 31,
1995, consist of: Advanced Financial, Countrywide Credit Industries, First
Financial Caribbean, First Mortgage Corp., Fund American Enterprises,
Imperial Credit Industries, North American Mortgage and the Company.
(3) The companies included in the MBA Peer Group for the year ended December 31,
1996, consist of: Advanced Financial, Countrywide Credit Industries, First
Financial Caribbean, First Mortgage Corp., Fund American Enterprises, North
American Mortgage and the Company. The companies excluded from the MBA Peer
Group for 1996 which were included in the 1995 group had by December 31,
1996

4
<PAGE> 7

either ceased doing business, been acquired by another company, ceased to be
publicly held or significantly altered the way they do business.
(4) The companies included in the MBA Peer Group for the year ended December 31,
1997, consist of: Countrywide Credit Industries, Doral Financial Corp.,
First Mortgage Corp., Fund American Enterprises, Homeside Lending Inc. and
the Company. The companies excluded from the MBA Peer Group for 1997 which
were included in the 1996 group had by December 31, 1997 either ceased doing
business, been acquired by another company, ceased to be publicly held or
significantly altered the way they do business. In addition, the MBA added
two new companies to the group in 1997.
(5) The companies included in the MBA Peer Group for the year ended December 31,
1998, consist of: Countrywide Credit Industries, Doral Financial Corp.,
First Mortgage Corp., Fund American Enterprise, Headlands Mortgage Co. and
the Company. The companies excluded from the MBA Peer Group for 1998 which
were included in the 1997 group had by December 31, 1998 either ceased doing
business, been acquired by another company, ceased to be publicly held or
significantly altered the way they do business. In addition, the MBA added
one new company to the group in 1998.
(6) The companies included in the MBA Peer Group for the year ended December 31,
1999, consist of: Countrywide Credit Industries, Doral Financial Corp.,
First Mortgage Corp. and the Company. The companies excluded from the MBA
Peer Group for 1999 which were included in the 1998 group had by December
31, 1999 either ceased doing business, been acquired by another company,
ceased to be publicly held or significantly altered the way they do
business.

5
<PAGE> 8

COMPENSATION OF OFFICERS AND DIRECTORS

COMPENSATION OF EXECUTIVE OFFICERS

The following table sets forth the compensation paid to each named
executive officer for services rendered to the Company during the periods
indicated.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG TERM COMPENSATION
ANNUAL COMPENSATION AWARDS
--------------------------------------------- --------------------------
(A) (B) (C) (D) (E) (F) (G) (L)
SECURITIES
RESTRICTED UNDERLYING ALL OTHER
NAME AND OTHER ANNUAL STOCK OPTIONS/ COMPENSATION
PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) COMPENSATION ($)(1) AWARDS ($)(2) SARS (#) ($)(3)
- ------------------ ---- ---------- ---------- ------------------- ------------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
D. W. Johnson, Jr.,(4).... 1999 $445,968 $ 400,000 $218,827 $ -- -- $ 63,285
Chief Executive 1998 430,404 1,873,357 218,827 1,391,110 -- 68,301
Officer, President and 1997 414,840 878,196 295,207 324,537 -- 129,005
Director
R.M. Duncan,.............. 1999 $225,000 $ 60,000 $ 8,267 $ -- -- $ 38,494
President -- RBMG, Inc. 1998 212,500 385,000 8,247 -- 15,000 39,740
1997 200,000 350,000 7,289 -- 68,250 30,373
Larry W. Reed,............ 1999 $185,417 $ 60,000 $ -- $ -- -- --
President -- Meritage 1998 164,583 41,000 -- -- -- --
Mortgage Corporation 1997 146,000 45,000 -- -- 21,000 --
S. F. Herbert,............ 1999 $210,000 $ 50,000 $ 5,131 $ -- -- $ 27,274
Corporate Senior 1998 205,000 200,000 5,066 -- 15,000 28,234
Executive Vice 1997 200,000 275,000 6,189 -- 36,750 26,474
President and Corporate
Chief Financial Officer
E. J. Sebastian,(5)....... 1999 $600,000 -- $ 952 $ -- -- $ 6,184
Chairman of the Board 1998 600,000 $ 856,000 9,847 -- 200,000 38,366
and Chief Executive 1997 250,008 600,000 -- -- -- 4,325
Officer
</TABLE>

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

(1) For 1999, this amount represents a payment of $200,000 to Mr. Johnson by
Resource Bancshares Corporation ("RBC") as more fully described under
"Employment Contracts," below, and, for Messrs. Johnson, Duncan, Herbert and
Sebastian, reimbursement for tax liability related to premiums on whole life
and universal life and disability policies in the amounts of $18,827,
$8,267, $5,131 and $952, respectively.
(2) The shares of restricted stock were awarded to Mr. Johnson on January 30,
1998 and February 1, 1999 as part of 1997 and 1998 bonuses. Mr. Johnson
received 20,048 shares in 1998, and 93,520 shares in 1999. Mr. Johnson also
was awarded 6,668, 29,568, 9,219 and 24,705 shares of restricted stock in
1994, 1995, 1996 and 1997, respectively. The shares held by Mr. Johnson had
a year-end value of $832,472, based on the closing price of a share of
Common Stock on December 31, 1999 of $4.531. The shares vest over a
five-year period, at the rate of 20% per year, and all unvested shares will
vest on December 31, 2000. Dividends are paid on the shares.
(3) Amounts shown for 1999 consist of (i) for Mr. Johnson, premiums on whole
life and disability insurance policies of $62,758 and contributions to the
Company's 401(k) plan of $527, (ii) for Mr. Duncan, premiums on whole life
and disability insurance policies of $27,557, contributions to the Company's
401(k) plan of $2,149 and dividends on shares subject to options of $8,788;
(iii) for Mr. Herbert, premiums on whole life and disability insurance
policies of $17,103, contributions to the Company's 401(k) plan of $2,562
and dividends on shares subject to options of $7,609 and (iv) for Mr.
Sebastian premiums on whole life and disability insurance policies of $3,506
and contributions to the Company's 401(k) plan of $2,678.

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<PAGE> 9

(4) Mr. Johnson was Chief Executive Officer for the period October 1, 1999
through December 31, 1999.
(5) Mr. Sebastian was Chief Executive Officer for the period January 1, 1999
through September 30, 1999.

AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES

<TABLE>
<CAPTION>
(a) (d) (e)
NUMBER OF SECURITIES UNDERLYING VALUE OF UNEXERCISED IN-THE-MONEY
UNEXERCISED OPTIONS/SARS AT FY-END(#) OPTIONS/SARS AT FY-END ($)
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE /UNEXERCISABLE(1)
- ---- -------------------------------------- ---------------------------------
<S> <C> <C>
D. W. Johnson, Jr................ 450,655/0 0/0
R.M. Duncan...................... 76,783/43,758 0/0
L.W. Reed........................ 18,270/9,600 0/0
S.F. Herbert..................... 48,499/28,812 0/0
E. J. Sebastian.................. 237,290/131,235 0/0
</TABLE>

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

(1) The value assigned to the options in column (e) above is equal to the number
of options exercisable or unexercisable, as the case may be, times the
difference between the closing price of a share of Common Stock on December
31, 1999, $4.531, and the per share exercise price of the option.

DEFINED BENEFIT PLANS

The Company sponsors a qualified Pension Plan for all employees, as well as
a Pension Restoration Plan ("Restoration Plan") and a Supplemental Executive
Retirement Plan ("SERP") for certain eligible employees, including officers. The
Restoration Plan and the SERP are unfunded plans which provide for benefit
payments in addition to those payable under the qualified Pension Plan. The
Restoration Plan maintains uniform application of the Pension Plan benefit
formula and would provide, among other benefits, payment of Pension Plan formula
pension benefits, if any, which exceed those payable under the maximum benefit
limitations of the Internal Revenue Code of 1986, as amended (the "Code").

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<PAGE> 10

The following table illustrates the estimated annual benefits payable upon
retirement at normal retirement date under the Pension Plan and the Restoration
Plan.

1999 PENSION PLAN TABLE

<TABLE>
<CAPTION>
YEARS OF SERVICE
----------------------------------------------------
FINAL AVERAGE PAY 15 20 25 30 35
----------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$125,000............................ $ 27,714 $ 36,952 $ 46,190 $ 55,428 $ 64,666
150,000............................ 33,902 45,202 55,503 67,803 79,104
175,000............................ 40,089 53,452 66,815 80,178 93,541
200,000............................ 46,277 61,702 77,128 92,553 107,979
225,000............................ 52,464 69,952 87,440 104,928 122,416
250,000............................ 58,652 78,202 97,753 117,303 136,854
300,000............................ 71,027 94,702 118,378 142,053 165,729
350,000............................ 83,402 111,202 139,003 166,803 194,604
400,000............................ 95,777 127,702 159,628 191,553 223,479
450,000............................ 108,152 144,202 180,253 216,303 252,354
500,000............................ 120,527 160,702 200,878 241,053 281,229
550,000............................ 132,902 177,202 221,503 265,803 310,104
600,000............................ 145,277 193,702 242,128 290,553 338,979
650,000............................ 157,652 210,202 262,753 315,303 367,854
700,000............................ 170,027 226,702 283,378 340,053 396,729
750,000............................ 182,402 243,202 304,003 364,803 425,604
800,000............................ 194,777 259,702 324,628 389,553 454,479
</TABLE>

The qualified Pension Plan recognizes W-2 earnings up to the Code limit of
$160,000 while the Restoration Plan recognizes a participant's base compensation
in excess of this limit. In 1999, Messrs. Johnson, Duncan, Reed, Herbert and
Sebastian received base pay of $445,968, $225,000, $185,417, $210,000 and
$600,000, respectively, and now have credited service under the Pension and
Restoration plans of 11, 6, 4, 5 and 12 years, respectively. Benefits in the
table are computed based on a straight-life annuity. The amounts in the table
assume continuation of the Social Security taxable wage base in effect during
1999 and are not subject to any deduction for Social Security or other offset
amounts.

The SERP provides for normal retirement upon the participant's attainment
of age 62. The SERP's normal retirement benefit upon a participant's attainment
of age 62 is 60% of the participant's final average pay (average base pay plus
cash bonuses of up to $100,000 per year for up to any five calendar years out of
the last ten calendar years) less the sum of benefits payable under the Pension
Plan, the Restoration Plan and Social Security.

Accrued benefits under the SERP as of December 31, 1999, for Messrs.
Johnson, Duncan, Reed, Herbert and Sebastian were $236,717, $144,464, $111,309,
$141,182 and $250,758, respectively. These benefits are annual amounts payable
for life commencing at age 62. These amounts are based upon average compensation
and service determined as of December 31, 1999.

EMPLOYMENT CONTRACTS

Mr. Johnson has an employment agreement with the Company which will expire
on December 31, 2000 (the "Johnson Employment Agreement"). Under the Johnson
Employment Agreement, Mr. Johnson receives a base salary of $350,000, subject to
upward adjustment annually by not less than 5%, but any such increase above 5%
cannot exceed the increase in the Consumer Price Index during the prior year.
Mr. Johnson's annual salary for 1999 was set at $445,968. Mr. Johnson also
receives an annual bonus equal to 4% of the Company's annual total pretax income
before bonuses and incentives. The bonus is paid each year as follows: (i) the
first $325,000 may, if the employee elects, be allocated to a deferred
compensation account pursuant to a Deferred Compensation Agreement whereby no
amount will be payable to the employee before

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<PAGE> 11

age 55 or his earlier termination of employment, disability or death; (ii) the
amount by which $575,000 exceeds the amount deferred pursuant to clause (i)
above, but not more than $350,000, will be paid in cash; and (iii) any remaining
amount (the "Remaining Bonus") will be paid in a combination of restricted
Common Stock (the "Restricted Stock") and cash, the cash portion being equal to
the amount required to pay applicable federal and state income taxes at the
highest combined rate on the Remaining Bonus. The Restricted Stock will be
valued at market based on the average closing price of the Common Stock for the
20 trading days preceding the date of payment. The Restricted Stock will vest
with respect to 20% of the shares covered thereby each year following the grant
date from the second through the sixth year; however, all unvested shares will
vest on December 31, 2000. Mr. Johnson will forfeit all of his unvested
Restricted Stock, if any, if his employment is terminated at any time for any
reason other than death, disability or termination without cause by the Company.
Mr. Johnson also is provided with $2,000,000 whole life and disability
insurance.

Mr. Johnson, acting with the concurrence of the Compensation Committee of
the Board of Directors, has the right to assign a part of his bonus to other
employees. If the committee does not concur, no assignment of his bonus can be
made. Any part of the bonus assigned to other employees which would have been
payable to Mr. Johnson in Restricted Stock may be paid to the other employees in
Restricted Stock, cash or a combination thereof. The Johnson Employment
Agreement gives Mr. Johnson certain registration rights relative to the Common
Stock underlying his options and his vested Restricted Stock.

In connection with the Company's initial public offering, Mr. Johnson
entered into a termination agreement pursuant to which RBC agreed to pay him
$200,000 in cash upon the closing of the offering, and on each anniversary date
of the closing through the year 2000 provided he is employed by the Company on
such anniversary date.

Mr. Duncan entered into an employment agreement with the Company effective
September 25, 1995. The employment agreement provides for Mr. Duncan's
employment until December 31, 2000 with an annual salary of $175,000. Mr. Duncan
is also eligible to receive an annual bonus and is provided a $1,000,000 term
life insurance policy. Mr. Herbert entered into an employment agreement with the
Company effective June 30, 1995. The employment agreement provides for Mr.
Herbert's employment until December 31, 2000 with an annual salary of $175,000.
Mr. Herbert also is eligible to receive an annual bonus and is provided a
$1,000,000 term life insurance policy. Effective July 1, 1998, Mr. Duncan's
annual salary was increased to $225,000 and Mr. Herbert's annual salary was
increased to $210,000.

Each of Mr. Duncan's and Mr. Herbert's employment agreements provides that
if (A) he voluntarily terminates his employment within one year following a
Change of Control (as hereinafter defined) as a result of (i) his determination
that as a result of a change in circumstances occurring following a Change in
Control significantly affecting his position, he can no longer adequately
exercise the authority, powers, functions or duties of his position or (ii) his
determination that he can no longer perform his duties by reason of a
substantial diminution in his responsibilities, status or position or (iii) the
Company requiring him to relocate to an area 100 miles outside of Columbia,
South Carolina or (B) the Company terminates his employment without Cause (as
defined in the contract) within one year following a Change in Control, all
remaining base salary under the agreement and an annual bonus of $75,000 and
life and disability insurance benefits for the remaining term of the agreement
will become due and payable to such employee. If the employee voluntarily
terminates his employment with the Company within one year following a Change in
Control for any reason other than as stated above, the employee will be entitled
to receive only his base salary for 12 months. A Change in Control for purposes
of Mr. Duncan's and Mr. Herbert's employment agreements means (i) the obtaining
by any party pursuant to a tender offer of 50% or more of the Company's voting
stock, (ii) individuals serving as directors immediately prior to a shareholder
meeting involving a director election contest failing to constitute a majority
of the Company's directors following such election contest, (iii) the Company
executing an agreement concerning the sale of all or substantially all of its
assets to a purchaser that is not a subsidiary, (iv) the Company's adoption of a
plan of dissolution or liquidation or (v) the Company executing an agreement
concerning a merger or consolidation involving the Company in which the Company
is not the surviving corporation or if less than 50% of the surviving
corporation's voting stock is held by persons who are shareholders of the
Company prior to such merger or consolidation.
9
<PAGE> 12

CHANGE OF CONTROL ARRANGEMENTS

The Company's Non-Qualified Stock Option Plan, Amended and Restated Omnibus
Award Plan and SERP all contain change of control provisions. Mr. Herbert holds
unvested options granted under the Non-Qualified Stock Option Plan. Messrs.
Duncan, Reed, Herbert and Sebastian hold unvested options under the Amended and
Restated Omnibus Award Plan and Messrs. Johnson, Duncan, Reed, Herbert and
Sebastian participate in the SERP. In the event of a Change of Control (as
defined in the two option plans and the SERP)of the type set forth in clause
(i), (ii) or (iv) below and immediately prior to a Change of Control of the type
set forth in clause (iii) below, each outstanding option under the Non-Qualified
Stock Option Plan and the Amended and Restated Omnibus Award Plan will become
immediately exercisable. A Change of Control for purposes of the two option
plans and the SERP includes (i) the acquisition by any individual, entity or
group of 20% or more of the Common Stock, (ii) a change in the membership of the
Board in which the current members or their approved successors no longer
constitute a majority, (iii) a reorganization, merger, consolidation or sale or
other disposition of all or substantially all of the Company's assets or the
acquisition of assets of another corporation unless (a) the shareholders prior
to the transaction own at least 50% of the Common Stock following the
transaction, (b) no person owns 20% or more of the Common Stock following the
transaction who did not own such amount prior to the transaction and (c) at
least a majority of the Board after the transaction were members of the Board at
the time the Board approved the transaction and (iv) approval by the
shareholders of a complete liquidation or dissolution of the Company.

If following a Change of Control a SERP participant is terminated without
Cause (as defined in the SERP) or the acquiring company terminates the SERP or
the participant separates from service as a result of (i) his determination that
as a result of a change in circumstances occurring following a Change in Control
significantly affecting his position, he can no longer adequately exercise the
authority, powers, functions or duties of his position or (ii) his determination
that he can no longer perform his duties by reason of a substantial diminution
in his responsibilities, status or position or (iii) the Company requiring him
to relocate to an area 100 miles outside of Columbia, South Carolina the
participant will become partially or fully vested in his SERP benefits based on
his credited years of service. Under the SERP plan formula and based on current
credited years of service, Messrs. Sebastian and Johnson would become 100%
vested, Mr. Duncan would become 80% vested, Mr. Herbert would become 70% vested
and Mr. Reed would become 50% vested.

COMPENSATION OF DIRECTORS

Directors who are also salaried employees of the Company do not receive any
additional compensation for service as directors. Other directors receive such
compensation as is set from time to time by the Board of Directors. Directors'
fees currently are set at $25,000 a year plus $1,000 per board meeting or
committee meeting attended. Committee chairmen receive an additional annual
retainer of $3,000. Directors' and meeting fees for regular board meetings and
meetings of committees paid for 1999 totaled $281,000. Directors also are
reimbursed for all reasonable out of pocket expenses related to attendance at
meetings.

On September 1, 1999, each of the Company's non-employee directors was
awarded an option to purchase 10,000 shares of Common Stock at an exercise price
of $6.00 per share under the Company's Formula Stock Option Plan. Each of the
options became exercisable immediately as to 20% of the shares and each of the
options will become exercisable with respect to an additional 20% of the shares
on September 1 of each year thereafter, beginning on September 1, 2000, until
each is exercisable with respect to all 10,000 shares.

COMPENSATION COMMITTEE REPORT

For 1999, the Company's Board of Directors set Mr. Sebastian's salary and
bonus based on recommendations made by the compensation committee (the
"Compensation Committee"). Mr. Johnson's 1999 salary and bonus were determined
by formulas set forth in his employment agreement. The 1999 salaries of the
Company's three other executive officers were set by Mr. Sebastian and Mr.
Johnson. In addition, as discussed below, Mr. Johnson made recommendations
concerning the amount of their 1999 bonuses.

10
<PAGE> 13

COMPENSATION OF NAMED EXECUTIVE OFFICERS

Messrs. Johnson, Duncan and Herbert have employment agreements with the
Company. Mr. Johnson's employment agreement was entered into prior to and in
connection with the Company's initial public offering. The terms of all these
employment agreements can be found under "COMPENSATION OF OFFICERS AND
DIRECTORS -- Employment Contracts," above. In accordance with the terms of Mr.
Johnson's employment agreement, the amounts of Mr. Duncan's, Mr. Reed's and Mr.
Herbert's annual bonuses, $60,000, $60,000 and $50,000, respectively, were based
on Mr. Johnson's recommendations and were approved by the Compensation
Committee.

COMPENSATION OF CHIEF EXECUTIVE OFFICERS

Mr. Sebastian's salary for 1999 was $600,000. The amount of this salary was
recommended by the Compensation Committee based on its subjective determination
of the appropriate salary in view of Mr. Sebastian's experience and the amount
of time he would be devoting to his duties with the Company and was approved by
the Board of Directors. That salary went into effect on January 1, 1999. Mr.
Sebastian resigned as Chief Executive Officer effective September 30, 1999. Mr.
Johnson became acting Chief Executive Officer on October 1, 1999 and continued
to act in that capacity through the end of the year. As noted above, Mr.
Johnson's 1999 salary was set under his employment agreement prior to his
assuming the role of chief executive officer and was not increased as a result
thereof.

POLICY WITH RESPECT TO $1,000,000 DEDUCTION LIMIT

Section 162(m) of the Code generally limits to $1,000,000 the corporate
deduction for compensation paid to executive officers named in the proxy
statement unless certain requirements are met. For 1999, no executive officer
received compensation totaling in excess of $1,000,000 and thus potentially
subject to Section 162(m). With respect to 2000 and future compensation of
executive officers, the Board of Directors reserves the right to authorize
compensation payments that may not be fully deductible by the Company. The Board
of Directors will continue to re-examine this policy on an ongoing basis.

SUBMITTED BY:

<TABLE>
<S> <C> <C>
Stuart M. Cable Boyd M. Guttery Robin C. Kelton
Douglas K. Freeman David W. Johnson, Jr. John O. Wolcott
</TABLE>

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

As described in the foregoing Compensation Committee Report, at various
times during 1999 decisions regarding the compensation of the named executive
officers were made by the Board of Directors as a whole, the Compensation
Committee and Messrs. Sebastian and Johnson. Mr. Sebastian was Chief Executive
Officer until September 30, 1999 and Mr. Johnson is President of the Company.

The Company has from time to time purchased loans on which certain officers
and directors of the Company or members of their immediate families were
obligated. All such transactions were made in the ordinary course of business on
substantially the same terms, including interest rates and collateral, that
prevailed at the time for comparable transactions with other persons and did not
involve more than normal risk of collectability or present other unfavorable
features.

GENERAL INFORMATION AS TO THE BOARD OF DIRECTORS

During 1999, the Company's Board of Directors held a total of 13 regular
and special meetings. Each incumbent director attended at least 75% of such
meetings and the meetings of committees on which he served held during the
period for which he was a director, except Mr. Cable. The Board has established
an audit committee and a compensation committee. The Company does not have a
nominating committee; rather the Board of Directors as a whole performs those
functions.

11
<PAGE> 14

The current members of the Audit Committee are Mr. Guttery and Mr. Wolcott.
The Audit Committee held six meetings during 1999. The Audit Committee is
charged with the responsibility of reviewing the Company's internal auditing
procedures and accounting controls and considers the selection and independence
of the Company's outside auditors.

The current members of the Compensation Committee are Mr. Cable and Mr.
Kelton. The Compensation Committee held 10 meetings during 1999. The
Compensation Committee is responsible for matters relating to executive
compensation.

PROPOSAL NO. 1: ELECTION OF DIRECTORS

The Company's Certificate of Incorporation divides the Board of Directors
into three classes, the members of one class to be elected each year for a three
year term. The terms of the Class III directors will expire at the Annual
Meeting. In addition, following the resignation of three directors of the
Company and the appointment of one new director by the Board of Directors, Mr.
Freeman, the Company has determined to restructure the Board classes. Mr.
Kelton, currently a Class III director, is nominated as a Class I director, to
serve for a one-year term. Mr. Guttery, currently a Class I director, is
nominated as a Class II director to serve for a two-year term. Mr. Wolcott,
currently a Class II director, and Mr. Freeman are nominated as Class III
directors to serve for three-year terms. All of the nominees for election as
directors are currently serving as directors of the Company.

Should any nominee for the office of director become unable to serve, which
is not anticipated, it is the intention of the persons named in the proxy,
unless otherwise specifically instructed therein, to vote for the election in
his stead of such other person as the Board of Directors may recommend.

Vacancies on the Board of Directors may be filled by the remaining
directors at any regular or special meeting thereof. Individuals selected to
fill such vacancies shall serve for the remainder of the term for which they are
appointed.

NOMINEES

The following information is furnished with respect to the Board of
Directors' nominees for election as directors. The Board of Directors recommends
a vote "FOR" all the nominees.

1. CLASS I -- TERMS TO EXPIRE AT THE 2001 ANNUAL MEETING.

2. CLASS II -- TERMS EXPIRING AT THE 2002 ANNUAL MEETING.

12
<PAGE> 15

3. CLASS III -- TERMS TO EXPIRE AT THE 2003 ANNUAL MEETING.

<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR EMPLOYMENT DURING THE LAST FIVE
NAME, PRESENT POSITION(S) AND TERM WITH THE COMPANY AGE YEARS, DIRECTORSHIPS OF PUBLIC COMPANIES
- --------------------------------------------------- --- -------------------------------------------------------
<S> <C> <C>
Douglas K. Freeman............................. 49 Chief Executive Officer of the Company since
Chief Executive Officer and Director of the January 2000. From April 1999 to January 2000,
Company since January 2000 President of Bank of America Consumer Finance Group, a
division of Bank of America, managing the bank's
consumer lending and finance business; from March 1998
until April 1999, President of the Consumer Finance
Group of NationsBank, N.A.; from March 1996 until March
1998, Chief Consumer Bank Executive of Barnett Bank,
Inc.; and from 1991 until March 1996, Consumer Chief
Bank Executive, Barnett Bank, Inc.
John O. Wolcott................................ 56 Executive Vice President of The Olayan
Director of the Company since June 1993 America Corporation, an investment company.
</TABLE>

MEMBERS OF THE BOARD OF DIRECTORS WHOSE
TERMS WILL CONTINUE AFTER THE ANNUAL MEETING

The following information is furnished with respect to the members of the
Board of Directors whose terms will continue after the Annual Meeting.

2. CLASS I -- TERMS TO EXPIRE AT THE 2001 ANNUAL MEETING.

3. CLASS II -- TERMS EXPIRING AT THE 2002 ANNUAL MEETING.

PROPOSAL NO. 2
AMENDMENT TO STOCK INVESTMENT PLAN

GENERAL

Effective January 1, 1995, the Company adopted the Resource Bancshares
Mortgage Group, Inc. Stock Investment Plan (the "Investment Plan"). The plan was
approved by the shareholders at the 1995 annual meeting. On November 30, 1998,
the Company's Board of Directors amended the plan to increase by 300,000 the
number of shares available for issuance thereunder and to make a number of other
changes. The plan as so amended was approved by the shareholders at the 1999
annual meeting. On February 2, 2000, the Board of Directors further amended the
plan to increase by another 300,000 the number of shares available for issuance
thereunder. The plan as so amended is described below and is being submitted to
the shareholders for approval at the Annual Meeting in order to comply with
certain requirements of the Code. If the shareholders do not approve the
amendment at the meeting, the plan as in effect prior to the February 2000
amendment will continue in effect.

13
<PAGE> 16

The purpose of the plan is to provide employees of the Company and its
subsidiaries with an opportunity to acquire a proprietary interest in the
Company through the purchase of shares of Common Stock and, thus, to develop a
stronger incentive to work for the continued success of the Company. The maximum
number of shares of Common Stock that may be purchased pursuant to the plan as
amended is 725,529 plus such additional shares as may be issued pursuant to the
antidilutive adjustment provisions of the plan. As of February 29, 2000, 500,746
shares had been issued under the plan. The shares of Common Stock to be
purchased pursuant to the plan will be purchased by the plan's custodian either
from the Company or in open market purchases. Shares purchased from the Company
may be either treasury shares or original issue shares.

The plan is for the benefit of all eligible employees (those who have
completed 60 days of continuous service) of the Company and its subsidiaries,
both officers and non-officers. As of February 29, 2000, the Company had
approximately 1,065 employees that were eligible to participate in the plan, of
which 254 were actively participating. An eligible employee may elect to have
withheld from compensation and contributed to the plan from a minimum of $10 per
month to a maximum of $1,500 per month.

Subject to the provisions of the plan, as of each purchase date, the
participant will be deemed to have been granted an option to purchase on such
purchase date as many shares (including fractional shares) as the participant
would be able to purchase at a per share purchase price equal to 85% of the fair
market value of a share of Common Stock on such purchase date with the payroll
deductions credited to his account during the applicable purchase period.
However, no participant may obtain a right to purchase more than $25,000 in fair
market value (determined as of each purchase date) during any calendar year. The
fair market value of Common Stock purchased in open market purchases will be the
price at which the custodian purchases such Common Stock. The fair market value
of Common Stock purchased from the Company will be the average of the high and
low reported sales prices of the Common Stock for the trading day most
immediately preceding the date on which the shares are purchased. The average of
the high and low reported sales prices of the Common Stock on March 29, 2000 was
$3.9375.

On or before the fifth working day after the end of each payroll period,
the Company remits to the plan custodian an amount equal to the total of all
payroll deductions made by participants under the plan during the payroll period
divided by .85. The custodian then applies the funds to the purchase of shares
of Common Stock. Stock purchases are to be completed within 30 days following
the remittance of funds. On each dividend payment date the Company remits to the
custodian an amount equal to the cash dividends payable on such shares divided
by .85 and the custodian applies such funds to the purchase of Common Stock
within 30 days. The Company pays the charges of the custodian (including
brokerage expenses incurred in connection with the purchase of shares) and all
costs of maintaining records and executing transfers.

Shares of Common Stock acquired for participants are held in the name of
the custodian or its nominee for the account of the plan. Currently the
custodian is First Chicago Trust Company, a division of Equiserve, but the
custodian may be changed at any time. The custodian establishes a stock purchase
account for each participant and credits to such stock purchase account the
participant's pro rata share of Common Stock purchased.

Upon written request of a participant directed to the Company, the
participant may receive a partial or total distribution of the shares of Common
Stock allocated to his stock purchase account. If a participant is to receive a
distribution, stock certificates for the number of whole shares of Common Stock,
subject to such distribution, will be issued and delivered to the participant.
If a participant is to receive a distribution of all of the participant's stock
purchase account, the participant will receive a cash distribution in lieu of
any fractional share. A participant may, at any time and effective as of the
next plan entry date, direct the Company to make no further deductions from the
participant's compensation or to adjust the amount of such deductions.

The Board of Directors may amend the plan at any time but no such amendment
shall be made without shareholder approval to (i) increase the number of shares
which may be acquired under the plan, (ii) decrease the purchase price, (iii)
withdraw the administration of the plan from the Board of Directors or (iv)
change the definition of eligible employees.

14
<PAGE> 17

PLAN BENEFITS

The following table sets forth the number of options granted under the
Investment Plan during 1999 to each person or group named and the dollar value
thereof.

<TABLE>
<CAPTION>
STOCK INVESTMENT PLAN
------------------------
DOLLAR VALUE NUMBER OF
NAME AND POSITION ($)(1) UNITS(2)
- ----------------- ------------ ---------
<S> <C> <C>
D.W. Johnson, Jr............................................ $ 3,732 3,165
R.M. Duncan................................................. 3,732 3,165
S.F. Herbert................................................ 3,636 3,073
L.W. Reed................................................... 0 0
E.J. Sebastian.............................................. 3,732 3,165
Executive group............................................. $ 14,832 12,568
Non-Executive Director Group................................ -- --
Non-Executive Officer Employee Group........................ $107,049 82,863
</TABLE>

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

(1) Represents the aggregate amount of the 15% discount received by such person
or group during 1999.
(2) Each Unit is an option covering one share of Common Stock

CERTAIN FEDERAL INCOME TAX CONSEQUENCES

The plan is intended to comply with the requirements governing employee
stock purchase plans set forth in Section 423 of the Code. Certain favorable
federal income tax consequences are afforded to purchasers of stock pursuant to
an employee stock purchase plan meeting those requirements. If the requirements
of Section 423 of the Code are satisfied, the employee will not realize taxable
income at the time the employee purchases stock pursuant to the plan. If a
participant acquires stock under such a plan and holds it for a period of more
than two years from the date the option is granted and more than one year from
the date the option is exercised, the participant will realize ordinary income
upon the disposition of such stock equal to the lesser of (a) the excess of the
fair market value of such stock at the time the option was granted over its
option price (which in the plan would be the amount of the 15% reduction in
price), or (b) the excess of the fair market value of such stock at the time of
disposition over the option price. The employee will also recognize a long term
capital gain or loss in an amount equal to the difference between (a) the amount
realized on the sale of the stock, and (b) the sum of the amount the employee
paid for the stock plus the amount, if any, taxed to the employee as ordinary
income (as described in the previous sentence). If a participant disposes of
stock acquired pursuant to such an option within two years from the date the
option is granted or one year from the date the option is exercised, he must
report as ordinary income the difference between the option price and the fair
market value of the stock at the time the option was exercised. The employee
will also recognize as capital gain or loss an amount equal to the difference
between (a) the amount realized on the sale of the stock, and (b) the sum of the
amount the employee paid for the stock plus the amount taxed to the employee as
ordinary income (as described in the previous sentence).

If the plan for any reason fails to qualify under Section 423 of the Code,
then in the year shares are purchased and allocated to a participant's stock
purchase account, the participant will recognize ordinary income equal to the
excess of the fair market value of the stock on the purchase date over the
purchase price paid by the participant for such shares (i.e., the 15% discount).
The amount of ordinary income recognized by the participant upon the purchase
and allocation of the shares will increase the participant's basis in such
shares. Upon the disposition of the stock, the participant will recognize a
capital gain or loss equal to the difference between the amount received for the
sale or exchange of the stock and the participant's basis in the stock
(generally the sum of ordinary income recognized in the year the shares were
purchased and allocated to the participant's stock purchase account plus the
purchase price paid for the stock).

No federal income tax deduction is ordinarily allowed to the Company with
respect to the 15% discount provided under the plan if the plan qualifies under
Section 423; however, if the plan does not satisfy the requirements of Section
423 of the Code, the Company will be entitled to an income tax deduction
(subject to the provisions of Section 162(m) of the Code), in the year shares
are purchased and allocated to participants'

15
<PAGE> 18

stock purchase accounts, equal to the amount of ordinary income includible in
the participants' income. Additionally, even if the plan complies with Section
423, if a participant disposes of shares purchased under the plan within two
years of their purchase date, the Company will be entitled to an income tax
deduction (subject to the provisions of Section 162(m) of the Code), in the year
of such disposition, equal to the amount constituting ordinary income to the
participant.

THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" APPROVAL OF
THE AMENDMENT TO THE INVESTMENT PLAN.

OTHER BUSINESS

The Board of Directors is not aware of any other matter which will be
presented for action at the Annual Meeting, but if any business properly is
brought before the meeting, it is intended that the proxies received from this
solicitation will be voted by the persons named therein in accordance with their
best judgment.

RELATIONSHIPS WITH INDEPENDENT ACCOUNTANTS

On March 23, 2000, the Audit Committee of the Company's Board of Directors
recommended a change in independent accountants, and the recommendation was
approved by the Board of Directors.

On March 28, 2000, the Company engaged Ernst & Young LLP as its independent
accountants to examine and report on the Company's financial statements at and
for the year ended December 31, 2000. During the two most recent fiscal years
and through March 28, 2000, the Company did not consult with Ernst & Young LLP
regarding (1) either the application of accounting principles to a specified
transaction, either completed or proposed or the type of audit opinion that
might be rendered on the Company's financial statements, or (2) any matter that
was the subject of either a disagreement or reportable event with
PricewaterhouseCoopers LLP, as described in Securities and Exchange Commission
Regulation S-K, Item 304(a).

On March 23, 2000, the Company dismissed PricewaterhouseCoopers LLP as its
independent accountants. The change in accountants was recommended by the Audit
Committee and approved by the Board of Directors. In connection with its audits
for the two most recent years and through March 23, 2000, there have been no
disagreements with PricewaterhouseCoopers LLP on any matter of accounting
principles or practices, financial statement disclosure, audit scope or
procedures that, if not resolved to the satisfaction of PricewaterhouseCoopers
LLP, would require PricewaterhouseCoopers LLP to make a reference to the subject
matter thereof in connection with its report. From January 1, 1998 through March
23, 2000, there have been no reportable events, as defined in Securities and
Exchange Commission Regulation S-K, Item 304(a). The reports of
PricewaterhouseCoopers LLP on the financial statements for the past two years
contained no adverse opinion or disclaimer of opinion and were not qualified or
modified as to uncertainty, audit scope or accounting principles. On March 23,
2000, the Company requested that PricewaterhouseCoopers LLP furnish them with a
letter addressed to the Securities and Exchange Commission stating whether
PricewaterhouseCoopers LLP agreed with these statements. A copy of
PricewaterhouseCoopers LLP's letter was filed as Exhibit 16 to the Company's
Current Report on Form 8-K filed with the Securities and Exchange Commission on
March 29, 2000.

Representatives of PricewaterhouseCoopers LLP are expected to be present at
the Annual Meeting with the opportunity to make a statement if they desire to do
so and they are expected to be available to respond to appropriate questions.
Representatives of Ernst & Young LLP are not expected to be present at the
Annual Meeting.

PROPOSALS FOR 2001 ANNUAL MEETING OF SHAREHOLDERS

Shareholders who intend to present proposals for consideration at next
year's annual meeting are advised that any such proposal must be received by the
Secretary of the Company no later than the close of business

16
<PAGE> 19

on December 12, 2000, if such proposal is to be considered for inclusion in the
proxy statement and form of proxy relating to that meeting.

In addition, the Company's bylaws provide that shareholder proposals,
including nominations of directors, may be considered at a meeting of
shareholders only if made by a shareholder of record entitled to vote at the
meeting who gives written notice of the proposal to the Secretary of the Company
that is received at the Company's principal offices not less than 45 days prior
to the anniversary of the date on which the Company first mailed its proxy
materials for the preceding year's annual meeting (for next years meeting,
February 25, 2001) provided, however, if no annual meeting was held in the
preceding year or the date of the annual meeting has been changed by more than
30 days from the date of the preceding year's annual meeting, notice by the
shareholder to be timely must be received not later than the close of business
on the later of 90 days in advance of the annual meeting or 10 days following
the date on which public announcement of the date of the meeting is first made.
Any written notice of a shareholder proposal by a shareholder to the Secretary
must include (a) a brief description of the business desired to be brought
before the meeting and the reasons for conducting such business at the meeting,
(b) the name and address, as they appear on the Company's books, of the
shareholder proposing such business, (c) the class and number of shares of stock
beneficially owned by the shareholder, (d) any material interest of the
shareholder in such business and (e) in the case of nominations of directors,
such other information regarding the nominee as may be required to be disclosed
in the proxy statement, and the written consent of the proposed nominee to his
nomination and to serve as director, if elected.

17
<PAGE> 20

APPENDIX A

THIRD AMENDMENT
TO STOCK INVESTMENT PLAN

THIS THIRD AMENDMENT TO STOCK INVESTMENT PLAN (this "Amendment"), dated
as of February 2, 2000, by RESOURCE BANCSHARES MORTGAGE GROUP, INC. (the
"Company").

W I T N E S S E T H:

WHEREAS, the Company maintains the Resource Bancshares Mortgage Group,
Inc. Stock Investment Plan, effective as of January 1, 1995, as amended by the
First Amendment made as of March 24, 1995, and the Second Amendment made as of
November 30, 1998 (the "Plan") for the benefit of its eligible employees; and

WHEREAS, in Section 15 of the Plan, the Company reserved the right by
action of its Board of Directors to amend the Plan; and

WHEREAS, the Company now desires to amend the Plan to authorize an
additional 300,000 shares of Common Stock to be acquired under the Plan;

NOW, THEREFORE, in consideration of the premises, the Plan is amended
as follows:

1. Effective February 2, 2000, Section 3 of the Plan shall be deleted
and the following inserted in its place:

"3. SCOPE OF THE PLAN. The maximum number of shares of Common
Stock which may be purchased under the Plan shall be 725,529 (the
original 100,000 shares as adjusted for changes in capitalization
pursuant to Section 14 plus an additional 300,000 shares added pursuant
to the Second Amendment to the Plan and an additional 300,000 shares
added pursuant to this Amendment) as such number may be adjusted after
February 2, 2000 pursuant to Section 14. Subject to the provisions in
Section 16, the Plan will continue in effect until the maximum number
of shares of Common Stock (described in the preceding sentence) have
been purchased by Participants pursuant to the Plan. Except as
otherwise provided in the Plan, all purchases of Common Stock pursuant
to the Plan shall be subject to the same terms, conditions, rights and
privileges. The shares of Common Stock acquired by the Custodian
pursuant to the Plan shall be acquired by the Custodian in open market
purchases, purchases of treasury stock from the Company or purchases of
original issue Common Stock from the Company as directed from time to
time by the Chief Executive Officer of the Company."

<PAGE> 21

2. This Amendment is conditioned upon obtaining the appropriate
approval by the stockholders of the Company and shall be submitted for approval
by the stockholders of the Company prior to February 1, 2001.

3. Except as expressly or by necessary implication amended hereby, the
Plan still continues in full force and effect.

IN WITNESS WHEREOF, the Company has caused this Amendment to be
executed by its duly authorized officers as of the day and year first above
written.

RESOURCE BANCSHARES MORTGAGE GROUP, INC.

By: ___________________________________
Its: ___________________________________

ATTEST:

_________________________________
______________________, Secretary

<PAGE> 22
PROXY FOR HOLDERS OF COMMON STOCK OF
RESOURCE BANCSHARES MORTGAGE GROUP, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE
ANNUAL MEETING OF STOCKHOLDERS ON MAY 3, 2000

The undersigned hereby appoints John W. Currie and Boyd M. Guttery
and each of them, proxies, with full power of substitution and
resubstitution, for and in the name of the undersigned, to vote all shares
of Common Stock of Resource Bancshares Mortgage Group, Inc. (the
"Company") which the undersigned would be entitled to vote if personally
present at the Annual Meeting of Stockholders to be held on Wednesday, May
3, 2000, at 11:00 a.m., local time, at the offices of King & Spalding, 191
Peachtree Street, Atlanta, Georgia 30303, and at any adjournment or
adjournments thereof, upon the matters described in the accompanying
Notice of Annual Meeting of Stockholders and Proxy Statement, receipt of
which is hereby acknowledged, and upon any other business that may
properly come before the meeting or any adjournment or adjournments
thereof. Said proxies are directed to vote on the matters described in the
Notice of Annual Meeting of Stockholders and Proxy Statement as indicated
on the reverse side, and in their discretion upon such other business as
may properly come before the meeting or any adjournment or adjournments
thereof.

If the undersigned is a participant in the Employee Stock Ownership Plan
(the "ESOP") and/or the Stock Investment Plan, and this proxy card is
received on or prior to May 1, 2000, then this card also provides voting
instructions to the trustee of the ESOP and/or the custodian of the Stock
Investment Plan, to vote at the 2000 Annual Meeting, and any adjournment
or adjournments thereof, any and all shares of Common Stock of the Company
held in the undersigned's respective plan accounts as specified upon the
matters indicated on the reverse side and in the discretion of such
trustee and/or such custodian upon such other matters as may properly come
before the meeting.

PLEASE COMPLETE, DATE AND SIGN THIS PROXY AND RETURN IT PROMPTLY IN THE
ENCLOSED ENVELOPE, WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING.
IF YOU ATTEND THE ANNUAL MEETING, YOU MAY VOTE IN PERSON IF YOU WISH, EVEN
IF YOU HAVE PREVIOUSLY RETURNED YOUR PROXY.

*FOLD AND DETACH HERE IF YOU ARE RETURNING YOUR VOTED PROXY BY MAIL *

[LOGO]
RESOURCE
BANCSHARES
MORTGAGE GROUP, INC.

PLEASE SEE REVERSE SIDE FOR INFORMATION ON
VOTING YOUR PROXY BY TELEPHONE OR INTERNET

<PAGE> 23

[X] Please mark your 2354
votes as in this
example.

This proxy will be voted as directed. If no direction is made, this proxy will
be voted FOR the election of all nominees as directors and FOR the approval of
the amendment to the Company's Stock Investment Plan.

The Board of Directors recommends a vote FOR all the nominees for election
as directors and a vote FOR approval of the amendment to the Company's
Stock Investment Plan.

FOR ALL except as indicated below WITHHELD FOR ALL

1. ELECTION OF [ ] [ ] Nominees:
DIRECTORS: (01) Class I - Robin C. Kelton
(02) Class II - Boyd M. Guttery
(03) Class III - Douglas K. Freeman
(04) Class III - John O. Wolcott

To withhold authority to vote for any nominee(s), write the name(s) of the
nominee(s) on the line below.

FOR AGAINST ABSTAIN
2. To approve the amend- [ ] [ ] [ ]
ment to the Company's
Stock Investment Plan.

3. In the discretion of the proxies, on any other matter that may properly come
before the meeting or any adjournment or adjournments thereof.

Please sign your name or names exactly as printed hereon.
When shares are held by joint tenants, both should sign.
Trustees and other fiduciaries should so indicate when
signing.

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

----------------------------------------
SIGNATURE(S) DATE

*FOLD AND DETACH HERE *

RESOURCE BANCSHARES MORTGAGE GROUP, INC.

Dear Stockholder:

We encourage you to vote your shares electronically this year either by
telephone or via the Internet. This will eliminate the need to return your
proxy card. You will need your proxy card and Social Security number (where
applicable) when voting your shares electronically.The Voter Control Number
that appears in the box above, just below the perforation, must be used in
order to vote by telephone or via the Internet.

The EquiServe Vote by Telephone and Vote by Internet systems can be accessed
24-hours a day, seven days a week up until the day prior to the meeting.

To Vote by Telephone:
Using a touch-tone phone call Toll-free: 1-877-PRX-VOTE (1-877-779-8683)

To Vote by Internet:
Log on to the Internet and go to the website: http://www.eproxyvote.com/rbmg
Note: If you vote over the Internet, you may incur costs such as
telecommunication and Internet access charges for which you will be
responsible.

THANK YOU FOR VOTING YOUR SHARES.
YOUR VOTE IS IMPORTANT!

Do Not Return this Proxy Card if you are Voting by Telephone or the Internet.