Newsouth Bancorp, Inc.
Ticker:NSBC 1311 Carolina Ave.
Exchange:NASDAQ-National Market Washington, NC 27889
Industry:Financial (SIC Code 6035) (919) 946-4178

Offering Information
Type of Shares:Common Shares Filing Date:11/18/96
U.S. Shares:2,910,000 Offer Date:4/8/97
Non-U.S. Shares:0 Filing Price:$15.00
Primary Shares:2,910,000 Offer Price:$15.00
Secondary Shares:0 Gross Spread:$0.49
Offering Amount: $43,650,000 Selling:
Expenses:$546,160 Reallowance:
Shares Out After: -

Primary Underwriting Group
ManagerTierPhone
Trident Securities, Inc.Lead Manager (919) 781-8900

Selected Financial Data

Dollar amounts in U.S. millions except for per share data
Full Year
Audited
Income
Latest
Unaudited
Income
Prior
Unaudited
Income
Balance
Sheet
9/30/96 9/30/96
Revenue:$17.18Assets:$194.14
Net Income:$0.82Curr Assets:
EPS:Liabilities:$175.79
Prior EPS:Curr Liabilities:
Cash Flow/Oper:Equity:$18.35
Cash Flow/Fin:Cash:
Cash Flow/Inv:

Business Description
The company was incorporated under the laws of the State Delaware in October 1996 at the direction of the Board of Directors of the Bank for the purpose of serving as a holding company of the Converted Bank upon its conversion from mutual to stock form. The company has received approval from the Administrator and the Board of Governors of the Federal Reserve System to acquire control of the Converted Bank and the Commercial Bank subject to satisfaction of certain conditions. Prior to the Conversion, the company has not engaged and will not engage in any material operations. Upon consummation of the Stock Conversion, the company will have no significant assets other than the outstanding capital stock of the Converted Bank, a portion of the net proceeds of the Stock Conversion and a note receivable from the ESOP.

Competition
The company faces strong competition in originating real estate, commercial business and consumer loans and in attracting deposits. The company competes for real estate and other loans princiaplly on the basis of interest rates, the types of loans it originates, the deposit products it offers and the quality of services it provides to borrowers. The company also competes by offering products which are tailored to the local community. Its competition in originating real estate loans comes primarily from other savings institutions, comercial banks, mortgage bankers and mortgage brokers. Commercial banks, credit unions and finance companies provide vigorous competition in consumer lending. Competition may increase as a result of the continuing reduction of restrictions on the interstate opeartions of financial institutions. The company attracts its deposits through its branch offices primarily from the local communities. Consequently, competition for deposits is principally from other savings institutions, commercial banks, credit unions and brokers in the company's primary market area. The company competes for desposits and loans by offering what it believes to be a variety of deposit accounts at competitive rates, convenient business hours, a commitment to outstanding customer service and a well-trained staff. The company believes it has developed strong reltionships with local realtors and the community in general. Management considers its primary market area for gathering deposits and originating loans to be Beaufort, Craven, Lenoir, Nash, Pasquotank and Pitt Counties in northeastern North Carolina, which are the counties in which the company's offices are located. The company originates loans throughout northeastern Carolina. Based on data provided by a private marketing firm, the company that at June 30, 1995, it had 3.85% of deposits held by all banks and savings institutions in its market area.

Use of Proceeds
The proceeds from the proposed offering will be used for general corporate purposes.

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