=========================NOTES TO FINANCIAL
The Southeastern Thrift and Bank Fund, Inc.
and administer the Fund's investment program. In return, the Fund has agreed to pay the Adviser a monthly
advisory fee at an annual rate of 0.65% of the Fund's average net assets, or a flat annual fee of $50,000,
whichever is higher. In addition, if total Fund expenses exceed 2% of the Fund's average net assets in any one
year, the Fund may require the Adviser to reimburse the Fund for such excess, subject to a minimum fee of
The Fund has also entered into an administration agreement with the Adviser pursuant to which the Adviser
provides certain administrative services required by the Fund. In return, the Fund has agreed to pay a monthly
administration fee at an annual rate of 0.15% of the Fund's average net assets, or a flat annual fee of $22,000,
whichever is higher.
The Fund does not pay remuneration to its officers nor to any director who may be employed by an affiliate of
the Fund. Certain officers of the Fund are officers of the Adviser.
NOTE C -
Purchases and proceeds from sales of securities, other than obligations of the U.S. government and its agencies
and short-term securities, during the year ended December 31, 1997, aggregated $13,336,797 and
$15,793,335, respectively. There were no purchases or sales of obligations of the U.S. government and its
agencies during the year ended December 31, 1997.
The cost of investments owned at December 31,1997 (excluding deposits in mutual savings banks) for Federal
income tax purposes was $39,721,782. Gross unrealized appreciation and depreciation of investments
aggregated $74,004,188 and none, respectively, resulting in net unrealized appreciation of $74,004,188.
NOTE D --
RECLASSIFICATION OF CAPITAL ACCOUNTS
During the period ended December 31, 1997, the Fund has reclassified amounts to reflect a decrease in
accumulated net realized gain on investments of $86 and an incr