SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934

FILED BY THE REGISTRANT [X]

FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]

CHECK THE APPROPRIATE BOX:

[ ] 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 SS. 240.14a-11(c) OR SS. 240.14a-12

LSB BANCSHARES, 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)(l) 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:

NOTICE OF ANNUAL MEETING OF THE SHAREHOLDERS OF
LSB BANCSHARES, INC.
ONE LSB PLAZA
LEXINGTON, NORTH CAROLINA 27292

To the Shareholders of LSB Bancshares, Inc.:

Notice is hereby given that the Annual Meeting of Shareholders of LSB
Bancshares, Inc. ("Bancshares"), called under authority of Article 2, Section 2,
of the Bylaws of Bancshares, will be held at Bancshares' headquarters, located
at One LSB Plaza, 5th Floor, Lexington, North Carolina, 27292, on Wednesday,
April 19, 2000 at 10:00 a.m. Shareholders of record at the close of business on
March 6, 2000 are entitled to notice of and to vote at the meeting and any
adjournment thereof. Following the Annual Meeting, shareholders of record are
cordially invited to a luncheon at the J. Smith Young YMCA, located at 119 West
Third Avenue, Lexington, North Carolina 27292, at 12:30 p.m.

The purposes of the meeting are to consider and act upon the following
proposals:

- To elect five members of the Board of Directors;

- To ratify the appointment of Turlington and Company, L.L.P.,
to conduct the independent audit for 2000;

- To consider and act upon a shareholder proposal by W. R.
Koontz relating to minimum share ownership requirements for
directors of Bancshares; and

- To consider such other business as may properly come before
the meeting.

We urge you to attend this meeting. It is extremely important that your
shares be represented regardless of the number you own. Please sign and return
your proxy to Bancshares in the enclosed envelope at your earliest convenience.
Unless you indicate to the contrary, your proxy will be cast FOR the nominees
for director named in the accompanying Proxy Statement, FOR the ratification of
the appointment of Turlington and Company, L.L.P. to conduct the independent
audit for 2000, and AGAINST the shareholder proposal relating to minimum share
ownership requirements for directors of Bancshares, each as described in more
detail in the accompanying Proxy Statement.

This 20th day of March, 2000.

Yours very truly,

Robert F. Lowe
Chairman, President and
Chief Executive Officer

LSB BANCSHARES, INC.
ONE LSB PLAZA
LEXINGTON, NORTH CAROLINA 27292

PROXY STATEMENT

The accompanying proxy is solicited by and on behalf of the Board of
Directors of LSB Bancshares, Inc. ( "Bancshares" ) for use at the Annual Meeting
of Shareholders to be held on Wednesday, April 19, 2000 at 10:00 a.m. at
Bancshares' headquarters, located at One LSB Plaza, 5th Floor, Lexington, North
Carolina, 27292, and at any adjournment thereof. Following the Annual Meeting,
shareholders of record are cordially invited to a luncheon at the J. Smith Young
YMCA, located at 119 West Third Avenue, Lexington, North Carolina 27292, at
12:30 p.m. The entire cost of this solicitation will be borne by Bancshares. In
addition, personal solicitation may be conducted by directors, officers and
employees of Bancshares and its subsidiary, Lexington State Bank (the "Bank").
This Proxy Statement and the accompanying proxy card were first mailed to
shareholders on or about March 20, 2000.

The shares of Bancshares common stock (the "Common Stock") represented
by the accompanying proxy card will be voted at the meeting if the proxy card is
properly signed, dated and received by Bancshares prior to the time of the
meeting. Where a choice is specified on the proxy card as to the vote on any
matter to come before the meeting, the proxy will be voted in accordance with
such specification. If no choice is specified, the proxy will be voted FOR the
nominees for director named herein, FOR the ratification of the appointment of
Turlington and Company, L.L.P. to conduct the independent audit for 2000, and
AGAINST the shareholder proposal relating to minimum share ownership
requirements for directors of Bancshares. Any shareholder giving a proxy has the
right to revoke it at any time before it is voted by delivering a written
revocation or an executed proxy bearing a later date to the Secretary of
Bancshares or by attending and voting in person at the meeting. If a shareholder
is a participant in the Shareholder Dividend Reinvestment and Stock Purchase
Plan, the proxy represents the number of shares of Common Stock in the
shareholder's dividend reinvestment account as well as shares held of record
directly by the shareholder.

VOTING PROCEDURES

Shareholders of record at the close of business on March 6, 2000 will
be entitled to vote at the Annual Meeting of Shareholders. At the close of
business on March 6, 2000, 8,463,511 shares of Common Stock were outstanding and
entitled to vote. There is no other class of voting stock outstanding. On all
matters considered at the meeting, shareholders are entitled to one vote for
each share held.

The laws of North Carolina, under which Bancshares is incorporated,
provide that, in connection with the election of directors, the persons
receiving a plurality of the votes cast will be elected as directors. The
proposal to ratify the appointment of Turlington and Company, L.L.P. to conduct
the independent audit of Bancshares for 2000, and the proposal relating to
minimum share ownership requirements for directors will be approved if the
number of votes cast "for" each such proposal exceeds the number of votes cast
"against" such proposal. Shares held of record by a broker or its nominee
("Broker Shares") and abstentions that are voted on any matter will be counted
for purposes of determining the existence of a quorum at the Annual Meeting.
Broker Shares that are not voted on any matter at the Annual Meeting will not be
included in determining whether a quorum is present at the Annual Meeting.
Abstentions and Broker Shares that are not voted on a particular proposal will
not be counted as votes for or against such proposals and will have the same
effect as negative votes.

PROPOSAL 1: ELECTION OF DIRECTORS

The Bylaws of Bancshares provide for a classified Board of Directors
consisting of not less than nine and not more than 24 directors, the number to
be determined by resolution of a majority of the Board of Directors or by
resolution of the shareholders at any meeting thereof. The Board of Directors,
by resolution, has set the number of directors at 14. Other than Lloyd G.
Walter, Jr. and Sue H. Hunter, the persons nominated by the Board of Directors
to serve as directors for a three-year term expiring at the 2003 Annual Meeting,
as set forth below, were elected as directors at the 1997 Annual Meeting. Mr.
Walter was initially appointed to the Board of Directors in connection with the
1997 acquisition of Old North State Bank and was subsequently elected by the
shareholders at the 1998 Annual Meeting to serve for a term expiring at the 2000
Annual Meeting. Ms. Hunter was appointed by the Board of Directors on January
12, 1999 to fill the vacancy left by the retirement of Margaret Lee Crowell and
was subsequently elected by the shareholders at the 1999 Annual Meeting to serve
for a term expiring at the 2000 Annual Meeting.

The persons named as proxies in the accompanying proxy card intend to
vote in favor of the nominees named below. Such nominees have consented to serve
as directors of Bancshares if elected. If, at the time of the meeting, any of
such nominees are unable or unwilling to serve, the discretionary authority
provided in the accompanying proxy card will be exercised to vote for such other
person or persons for the office of director as may be nominated by the Board of
Directors. Proxies cannot be voted for a greater number of nominees than the
number named in this Proxy Statement.

Additional information about each of the nominees and the continuing
directors is provided below. The number of years of service on the Board of
Directors indicated in the following table includes service on the Board of
Directors of the Bank prior to the incorporation of Bancshares.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL NOMINEES FOR ELECTION AS A
DIRECTOR TO SERVE UNTIL THE 2003 ANNUAL MEETING

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5

NOMINEES FOR ELECTION AS A DIRECTOR
TO SERVE UNTIL THE 2003 ANNUAL MEETING

DIRECTOR PRINCIPAL OCCUPATION
NAME AND AGE SINCE FOR PAST FIVE YEARS
- ------------ -------- --------------------

Robert F. Lowe (57) 1983 Chairman, President and CEO of Bancshares, the Bank and
Peoples Finance Company of Lexington, Inc., a subsidiary
of the Bank; President and a director of LSB Financial
Services, Inc., a subsidiary of the Bank

Roberts E. Timberlake (63) 1979 Artist/Designer; Chairman, President and CEO of Bob
Timberlake, Inc.

Lloyd G. Walter, Jr. (65) 1997 President, LGW Consulting, PC

Julius S. Young, Jr. (52) 1988 President, Jay Young Management, Inc.

Sue H. Hunter (64) 1999 President and Co-owner of Thomasville Emporium; Vice
President of Side Street Cafe; former Davidson County
Commissioner and Vice Chairperson

INCUMBENT DIRECTORS
SERVING UNTIL THE 2001 ANNUAL MEETING

DIRECTOR PRINCIPAL OCCUPATION
NAME AND AGE SINCE FOR PAST FIVE YEARS
- ------------------- --------- -------------------

Michael S. Albert (45) 1995 President, CEO and Director of Billings Freight Systems,
Inc.; Treasurer of Cargo Carriers, Inc.; Vice President of
Metro Motor Express, Inc.

Peggy B. Barnhardt (66) 1995 Retired since 1996; formerly Deputy Superintendent,
Davidson County Schools

Walter A. Hill, Sr. (60) 1983 President, Hill Oil Company, Inc.; Vice President and
Secretary, NorthCo, Inc. (construction development)

Robert B. Smith, Jr. (61) 1969 Attorney

3
6

INCUMBENT DIRECTORS
SERVING UNTIL THE 2002 ANNUAL MEETING

DIRECTOR PRINCIPAL OCCUPATION
NAME AND AGE SINCE FOR PAST FIVE YEARS
- ------------------- --------- -------------------

Leonard H. Beck (64) 1995 President, Green Printing Company; Director of the
National Association of Printers and Lithographers

Marvin D. Gentry (64) 1997 President and CEO of The New Fortis Corporation, a
wholly-owned subsidiary of K. Hovnanian Enterprises

Samuel R. Harris (58) 1990 Physician

David A. Smith (61) 1990 Owner, Red Acres Dairy Farm

Burr W. Sullivan (53) 1987 President, Dorsett Printing and Lithograph Corporation

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7

MANAGEMENT'S OWNERSHIP OF COMMON STOCK

The following table sets forth information concerning the beneficial
ownership of Common Stock by each director, nominee for director and each
executive officer named under the heading "Executive Compensation" herein, and
by all directors and executive officers as a group as of March 6, 2000.
Management is aware of no person who beneficially owns more than five percent of
the outstanding shares of Common Stock. According to rules promulgated by the
Securities and Exchange Commission (the "SEC"), a person is the "beneficial
owner" of securities if he or she has or shares the power to vote them or to
direct their investment, or has the right to acquire ownership of such
securities within 60 days through the exercise of an option, warrant, right of
conversion of a security or otherwise.

Amount and Nature of Beneficial Ownership of Common Stock

Sole Voting And Shared Voting And %
Name of Beneficial Owner Investment Power Investment Power Total Of Total
- ----------------------------- ------------------- -------------------- ---------------- ------------------

Michael S. Albert 7,298 (1) 5,563 12,861 *
Peggy B. Barnhardt 5,130 (2) -- 5,130 *
Leonard H. Beck 7,114 (3) -- 7,114 *
Marvin D. Gentry 13,407 (4) 11,266 24,673 *
Samuel R. Harris 9,701 (5) -- 9,701 *
Walter A. Hill, Sr. 19,322 (6) 8,468 27,790 *
Sue H. Hunter 1,859 (7) 250 2,109 *
Robert F. Lowe 132,225 (8) 39,493 171,718 2.0
David A. Smith 7,328 (9) 11,537 18,865 *
Robert B. Smith, Jr. 28,304 (10) -- 28,304 *
Burr W. Sullivan 11,411 (11) 3,910 15,321 *
Roberts E. Timberlake 16,805 (12) 15,643 (13) 32,448 *
Lloyd G. Walter, Jr. 8,458 (14) 1,288 9,746 *
Julius S. Young, Jr. 40,780 (15) -- 40,780 *
Monty J. Oliver 50,309 (16) 69 50,378 *
H. Franklin Sherron, Jr. 60,406 (17) 14,853 75,259 *
All directors and
executive officers as a
group (16 persons) 419,857 112,340 532,197 6.3

- ----------------------------------
* An asterisk indicates less than one percent.
(1) Includes 2,392 shares held in trust for such director under the Deferred
Plan (as defined below) and 2,500 shares underlying options exercisable
within 60 days of the record date.
(2) Includes 1,656 shares held in trust for such director under the Deferred
Plan and 2,125 shares underlying options exercisable within 60 days of the
record date.
(3) Includes 1,875 shares underlying options exercisable within 60 days of the
record date.
(4) Includes 1,355 shares held in trust for such director under the Deferred
Plan and 1250 shares underlying options exercisable within 60 days of the
record date.
(5) Includes 4,226 shares held in trust for such director under the Deferred
Plan and 3125 shares underlying options exercisable within 60 days of the
record date.
(6) Includes 5,620 shares held in trust for such director under the Deferred
Plan and 3125 shares underlying options exercisable within 60 days of the
record date.
(7) Includes 879 shares held in trust for such director under the Deferred Plan
and 625 shares underlying options exercisable within 60 days of the record
date.

5
8

(8) Includes 5,189 shares held in trust for such director under the Deferred
Plan and 92,621 shares underlying options exercisable within 60 days of the
record date.
(9) Includes 3,795 shares held in trust for such director under the Deferred
Plan and 3,126 shares underlying options exercisable within 60 days of the
record date.
(10) Includes 5,620 shares held in trust for such director under the Deferred
Plan and 3,125 shares underlying options exercisable within 60 days of the
record date.
(11) Includes 5,189 shares held in trust for such director under the Deferred
Plan and 3,125 shares underlying options exercisable within 60 days of the
record date.
(12) Includes 5,189 shares held in trust for such director under the Deferred
Plan and 3,125 shares underlying options exercisable within 60 days of the
record date.
(13) Includes: (a) 5,118 shares held by the Bank as trustee of certain trusts
for the benefit of Mr. Timberlake's wife, over which Mr. Timberlake shares
investment power but has no voting power and (b) 8,438 shares held in
trusts for Mr. Timberlake's benefit, over which Mr. Timberlake shares
investment power with the Bank as trustee and over which the Bank has
exclusive voting power.
(14) Includes 1,355 shares held in trust for such director under the Deferred
Plan and 1,250 shares underlying options exercisable within 60 days of the
record date.
(15) Includes 5,127 shares held in trust for such director under the Deferred
Plan and 3,125 shares underlying options exercisable within 60 days of the
record date.
(16) Includes 35,998 shares underlying options exercisable within 60 days of the
record date.
(17) Includes 38,498 shares underlying options exercisable within 60 days of the
record date.

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9

CORPORATE GOVERNANCE

The Board of Directors of Bancshares has standing Executive, Stock
Option and Compensation, and Audit Committees. There are no other committees of
the Board of Directors of Bancshares. The entire Board of Directors of
Bancshares nominates persons to serve as directors.

The Executive Committee of Bancshares reviews various matters and
submits proposals or recommendations to Bancshares' Board of Directors. The
Executive Committee is empowered to act and does act for Bancshares' Board of
Directors on strategic matters. The Executive Committee was comprised of Messrs.
Robert F. Lowe, Michael S. Albert, David A. Smith, Robert B. Smith, Jr., Burr W.
Sullivan and Julius S. Young, Jr. The Executive Committee did not meet during
1999.

The Stock Option and Compensation Committee administers the 1986
Employee Incentive Stock Option Plan, the 1996 Omnibus Stock Incentive Plan and
the Management Incentive Plan (the "Incentive Plan") and the Old North State
Bank 1990 Incentive Stock Option Plan and the Piedmont BancShares Corporation
Stock Option Plan, both of which were assumed by Bancshares in connection with
its acquisition of Old North State Bank. The Stock Option and Compensation
Committee selects employees for participation in such plans and determines the
timing, pricing and amount of stock options granted and the amount of incentive
compensation earned pursuant to the plans within the terms of the plans. The
Stock Option and Compensation Committee is also responsible for administering
the 1994 Director Stock Option Plan. The Stock Option and Compensation Committee
was comprised of Messrs. Albert, Robert B. Smith, Jr., Sullivan, Roberts E.
Timberlake, Young and Lloyd G. Walter, Jr. The committee met seven times during
1999.

Bancshares' Audit Committee reviews and approves various audit
functions and is responsible for reviewing and approving the Bank's internal
audits and the separate examinations of the Bank by the Federal Deposit
Insurance Corporation and the North Carolina Commissioner of Banks. Bancshares'
Audit Committee was comprised of Messrs. Sullivan, Albert, Walter A. Hill, Sr.,
Robert B. Smith, Jr., Marvin D. Gentry and Young. Bancshares' Audit Committee
met twice during 1999.

The Board of Directors of the Bank has a standing Executive Committee.
The Executive Committee of the Bank reviews various matters and submits
proposals and recommendations to the Bank's Board of Directors. The Executive
Committee is empowered to and does act for the Bank's Board of Directors on
strategic matters. The Bank's Executive Committee was comprised of Messrs. Lowe,
Albert, David A. Smith, Robert B. Smith, Jr., Sullivan and Young. The Bank's
Executive Committee met 21 times in 1999.

During 1999, the Board of Directors of Bancshares met 13 times and the
Board of Directors of the Bank met 12 times. All directors attended at least 75
percent of the aggregate of the total number of meetings of the Board of
Directors of Bancshares and the Bank (held during the period for which each
person was a director) and the total number of meetings held by all committees
of the Boards on which such directors served during 1999, with the exception of
Mr. Timberlake, who

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10

attended 58 percent of the aggregate of the total number of meetings held by all
committees of the Boards on which he served during 1999.

Shareholders entitled to vote in the election of directors may nominate
candidates for consideration by the Board of Directors of Bancshares. Pursuant
to the Bylaws of Bancshares, notice of nominations made by shareholders with
respect to the 2001 annual meeting must be received in writing by the Secretary
of Bancshares no earlier than January 6, 2001 and no later than January 31, 2001
and must set forth (i) the name, age, business address and, if known, residence
address of the nominee, (ii) the principal occupation or employment of the
nominee, (iii) the nominee's qualifications to serve as a director, (iv) the
number of shares of Common Stock beneficially owned by the nominee, (v) a
representation that the nominee has consented to his name being placed in
nomination, (vi) the name and record address of the shareholder making the
nomination, (vii) the number of shares of Common Stock owned of record and
beneficially by such shareholder, and (viii) any material interest of such
shareholder in the proposed nomination.

EXECUTIVE COMPENSATION

The following table sets forth the total compensation awarded, paid to
or earned by the executive officers of Bancshares during each of the years ended
December 31, 1999, December 31, 1998 and December 31, 1997:

SUMMARY COMPENSATION TABLE

Annual Long-Term
Compensation Compensation
------------ ------------
Awards
-------------
Securities All Other
Name and Salary Bonus Underlying Compensation
Principal Position Year ($) ($) Options (#)(1) ($)(2)
------------------ ---- ------ ------ -------------- ------------

Robert F. Lowe
President and CEO 1999 225,000 85,012 10,000 88,774
1998 204,000 57,253 10,000 51,055
1997 187,000 71,433 12,500 34,353

Monty J. Oliver
Secretary and Treasurer 1999 140,000 32,298 5,000 45,034
1998 128,500 21,733 5,000 38,800
1997 116,500 24,683 6,250 30,182

H. Franklin Sherron, Jr.
Vice President 1999 130,000 49,006 5,000 10,941
1998 115,700 30,558 5,000 8,313
1997 103,000 38,493 6,250 6,465

- ---------------------------------
(1) The information concerning options gives effect to the 25% stock split in
the form of a stock dividend paid on February 16, 1998.
(2) Compensation set forth in this column represents the following (i) amounts
contributed by the Bank for the account of the executive officers under the
Lexington State Bank Employees Savings Plus Plan for each of 1999,

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11

1998 and 1997 as follows: Mr. Lowe, $4,800, $4,800 and $4,750; Mr. Oliver,
$4,214, $3,918 and $3,957; and Mr. Sherron, $4,493, $4,447 and $2,760; and
(ii) life insurance premiums paid by Bancshares for each of 1999, 1998 and
1997 as follows: Mr. Lowe, $83,974, $46,255 and $29,603; Mr. Oliver,
$40,820, $34,882 and $26,225; and Mr. Sherron, $6,448, $3,866 and $2,705.

The following table sets forth certain information regarding the stock
options granted to the executive officers of Bancshares in 1999. Bancshares has
no outstanding stock appreciation rights ("SARs") and granted no SARs during
1999. In addition, in accordance with the rules of the SEC, the table sets forth
the hypothetical gains or "option spreads" that would exist for the respective
options based on assumed rates of annually compounded Common Stock price
appreciation of 5% and 10% from the date the options were granted over the full
option term.

OPTION GRANTS IN LAST FISCAL YEAR(1)

Individual Grants
----------------- Potential Realizable
Value at Assumed
Percent of Annual Rates of
Number of Total Stock Price
Securities Options Exercise Appreciation for
Underlying Granted to or Base Option Term
Options Employees in Price Expiration --------------------
Name Granted Fiscal Year ($/Sh) Date(1) 5% ($) 10% ($)
----- -------- ------------- ---------- ---------- ---------- -------

Robert F. Lowe 10,000 17.8 $20.00 05/11/09 125,779 318,748
Monty J. Oliver 5,000 8.9 $20.00 05/11/09 62,889 159,374
H. Franklin Sherron, Jr. 5,000 8.9 $20.00 05/11/09 62,889 159,374

- --------------------
(1) Options become exercisable in installments of 20% on each anniversary date
following the date of grant, and thereafter may be exercised in whole or in
part at any time prior to the expiration date.

The following table sets forth certain information regarding stock options
exercised during 1999 by the executive officers of Bancshares, including the
aggregate value of gains on the date of exercise. In addition, this table
includes the number of shares of Common Stock subject to exercisable and
unexercisable stock options as of December 31, 1999. The table also sets forth
the values for "in-the-money" options based on the positive spread between the
exercise price of such stock options and the closing sale price of a share of
Bancshares Common Stock on the Nasdaq National Market on December 31, 1999.

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12

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

Number of Value of
Securities Unexercised
Underlying In-the-Money
Options at Options
FY-End (#) at FY-End ($)
Shares ------------- -------------
Acquired on Value Exercisable/ Exercisable/
Name Exercise (#) Realized ($) Unexercisable Unexercisable
----- ------------ ------------ --------------- ----------------

Robert F. Lowe 0 0 88,714 / 34,407 432,295 / 34,401
Monty J. Oliver 0 0 34,435 / 16,813 167,878 / 15,549
H. Franklin Sherron, Jr. 0 0 36,935 / 16,813 175,253 / 15,549

PENSION PLAN

The Bank's Employees' Pension Plan is a non-contributory plan that covers
all employees who work at least 1,000 hours annually, are at least 21 years old
and have completed one year of service. The plan is a defined benefit plan,
providing for benefits equal to .8% of final average monthly compensation,
multiplied by years of credited service, plus .65% of final average monthly
compensation in excess of the social security compensation amount, multiplied by
years of credited service not to exceed 35 years. Final average compensation is
the average of the five highest consecutive calendar years of compensation paid
during the ten calendar years preceding retirement. The compensation covered by
the plan consists of base salary. A participant's accrued benefit is fully
vested and non-forfeitable upon reaching age 65. If a participant terminates
employment for any reason other than death, disability or retirement, the
participant's accrued benefits will vest after five years of service. Benefits
can be paid in a lump sum only if the distribution is $10,000 or less.
Distributions over $10,000 must be paid in monthly payments. Benefits also are
provided for early retirement, deferred retirement, disability retirement and
death.

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13

The following table shows estimated annual benefits payable upon retirement
at age 65 to participants under the plan.

PENSION PLAN TABLE

ESTIMATED YEARS OF CREDITED SERVICE
ANNUAL BENEFIT PAYABLE ON RETIREMENT(1)

Five-Year Average 15 20 25 30 35
Salary at Retirement Years Years Years Years Years
-------------------- ----------- ----------- ----------- ----------- ---------

225,000 31,577 42,102 52,628 63,153 73,679
200,000 31,577 42,102 52,628 63,153 73,679
175,000 31,577 42,102 52,628 63,153 73,679
150,000 29,402 39,202 49,003 58,803 68,604
125,000 23,964 31,952 39,940 47,928 55,916
100,000 18,527 24,702 30,878 37,053 43,229
75,000 13,089 17,452 21,815 26,178 30,541
50,000 7,652 10,202 12,753 15,303 17,854

- -----------------------------
(1) Some of the amounts shown exceed the limits imposed by federal law for
qualified plans.

Benefits payable as shown in the table are computed on a straight-life
annuity basis. Such amounts are not subject to deduction for social security
benefits or other amounts received by participants. Years of credited service
for the persons named in the summary compensation table above are as follows:
Mr. Lowe (29); Mr. Oliver (21); and Mr. Sherron (9).

PERFORMANCE GRAPH

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14

The foregoing graph and the following table compare, for the five-year
period ended December 31, 1999, the cumulative return to shareholders of
Bancshares with the Standard & Poor's 500 Stock Index and an index consisting of
500 major regional banks, assuming investment of $100 at the beginning of the
period and the reinvestment of dividends.

12/31/94 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99
-------- -------- -------- -------- -------- --------

LSB Bancshares, Inc. $100.00 $112.48 $142.22 $193.57 $183.08 $154.54
S&P 500 Composite $100.00 $137.58 $169.17 $225.60 $290.08 $351.12
Major Regional Banks $100.00 $157.46 $215.15 $323.51 $357.44 $306.69

REPORT OF THE STOCK OPTION AND COMPENSATION COMMITTEE

The following report of the Stock Option and Compensation Committee of
the Board of Directors of Bancshares provides information with respect to the
compensation paid to Bancshares' Chief Executive Officer, Robert F. Lowe, and to
its other executive officers, Messrs. Sherron and Oliver.

Bancshares' executive compensation program is administered by the Stock
Option and Compensation Committee (the "Committee") of the Board of Directors of
Bancshares. The Committee is comprised of the individuals listed below, each of
whom is a non-employee director of Bancshares and the Bank. Bancshares'
compensation program for executive officers consists of the following elements:
annual salary; performance-based cash awards under the Management Incentive Plan
(the "Incentive Plan"); annual grants of options under the 1996 Omnibus Stock
Incentive Plan (the "1996 Plan"); annual matching contributions under the
Lexington State Bank Employees Savings Plus Plan (the "Bank Savings Plan"); and
Employment Continuity Agreements. The Committee grants stock options under the
1996 Plan to the executive officers. Under the Incentive Plan, the Committee
recommends to Bancshares' Board of Directors certain corporate and financial
performance objectives and recommends to the Bank's Board of Directors the
related incentive compensation amounts for executive officers. The Committee
recommends to the Bank's Board of Directors the salary levels for executive
officers, and the Bank's Board of Directors determines matching contributions
under the Bank Savings Plan.

Bancshares' executive compensation program is designed to enable
Bancshares to attract, retain and reward executive officers. The Committee
intends to keep compensation levels competitive with a representative sample of
the Bank's peer groups. The Committee's strategy is to maintain a structure
within the executive compensation program which strengthens the link between
executive compensation, Bancshares' performance, individual performances of the
executive officers and shareholder interests. In accordance with this strategy,
in February 1996, Bancshares' Board of Directors adopted the Incentive Plan.
Under the Incentive Plan, executive officers recommended by the Committee and
approved by the Bank's Board of Directors can earn incentive compensation if
Bancshares achieves the operating performance objectives

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recommended by the Committee and approved by Bancshares' Board of Directors, and
the executive officers achieve individual performance objectives. The Committee
believes that the Incentive Plan motivates Bancshares' executive officers to
achieve Bancshares' business goals and objectives.

The following sections of this Report describe the compensation program
for executive officers in effect in 1999.

BASE SALARY

Base salaries for executive officers are reviewed and approved by the
Bank's Board of Directors based upon recommendations by the Committee. The
Committee recommends salaries based upon a review of the range of salaries
earned by executive officers within a representative peer group, although there
is no predetermined point within such range at which the Committee targets
salaries. In determining base salaries, the Committee does not establish
performance thresholds or other measures that directly relate base salaries to
operating performance.

The base salary paid to Bancshares' Chief Executive Officer, Robert F.
Lowe, during 1999 reflects the base salary policies described above. Mr. Lowe's
1999 salary was at the midpoint of the range of salaries paid to the chief
executive officers of the Bank's peer group. The Committee believes that Mr.
Lowe's 1999 base salary, which is a 10.3% increase over his 1998 base salary, is
modest in relation to Bancshares' corporate and financial performance and
consistent with the salaries paid to executives of the Bank's peer group.

The base salaries paid to Bancshares' other executive officers, Messrs.
Sherron and Oliver, are recommended by Mr. Lowe to the Committee. The 1999 base
salary paid to Mr. Sherron was at the 49th percentile of the range of salaries
paid to executive officers of the Bank's peer group and is based on years of
experience. Mr. Sherron's base salary during 1999 reflects a 12.4% increase over
his 1998 base salary. During 1999, Mr. Oliver's base salary was at the 102nd
percentile of the range of salaries paid to executive officers of the Bank's
peer group and is based on years of experience. Mr. Oliver's base salary during
1999 reflects a 9% increase over his 1998 base salary. Furthermore, the
Committee believes that the base salaries paid to Messrs. Sherron and Oliver
give fair consideration to their individual contributions and are competitive
with the Bank's peer group.

INCENTIVE COMPENSATION

Incentive compensation awards for executive officers of Bancshares
granted under the Incentive Plan are recommended by the Committee and approved
by the Bank's Board of Directors based on each executive officer's achievement
of his individual performance objectives. These objectives are tied to
measurements of corporate objectives, such as return on average equity, return
on average assets, asset growth, deposit growth, efficiency ratio and

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delinquency and charge off percentages, and, in some instances, other objectives
that are specific to the executive officer's job function. The criteria for
determining the maximum cash incentive award under the Incentive Plan is based
on net income and reflects the Committee's commitment to maintaining a strong
incentive compensation plan that is directly related to maximizing long-term
shareholder value.

For performance during 1999, Bancshares awarded cash incentive
compensation under the Incentive Plan totaling $470,147 to 35 officers, which
amount includes an aggregate of $166,316 paid to Bancshares' executive officers.
In 1999, other participants in the Incentive Plan were key employees who, in the
judgment of the Committee, made a substantial contribution to the success of
Bancshares and its subsidiaries and who the Committee believes should
participate in that success and be motivated to contribute to future success.
The incentive compensation awards granted to Messrs. Lowe and Sherron were based
solely upon Bancshares' performance as measured by the corporate objectives set
forth above and represent a payment of 98.51% of their respective 1999 maximum
cash incentive awards under the Incentive Plan. The incentive compensation award
granted to Mr. Oliver was based on similar corporate objectives and his
management of the annual budget process, investor and analyst relations and
compliance with regulations promulgated by the SEC and The Nasdaq Stock Market,
Inc. In addition to the corporate objectives set forth above, Mr. Oliver met all
other performance objectives established for him in 1999 which were specific to
his job function.

STOCK OPTIONS

The Committee awards stock options to executive officers as a long-term
incentive to align the executives' interests with those of other shareholders
and to encourage significant stock ownership. Under the 1996 Plan, the Committee
grants to selected key employees options to purchase Bancshares' Common Stock at
a price equal to the fair market value of Bancshares' Common Stock on the date
of grant. Employees under the 1996 Plan are those key employees who, in the
judgment of the Committee, are in a position to materially affect the overall
success of Bancshares and its subsidiaries by reason of the nature and extent of
their duties.

In 1999, pursuant to the 1996 Plan, the Committee granted options for
56,250 shares of Bancshares' Common Stock to employees of Bancshares and the
Bank, including options for 10,000 shares granted to Mr. Lowe and 5,000 shares
granted to each of Messrs. Oliver and Sherron. The Committee has not adopted any
objective criteria that relates the level of options granted to the executive
officers to performance of Bancshares or the individuals. In approving the grant
to Mr. Lowe, the Committee considered numerous factors, including Bancshares'
operating performance, Mr. Lowe's prior contributions and potential to
contribute in the future and practices within the Bank's peer group with respect
to granting options, although none of these factors was individually
determinative.

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The stock options granted under the 1996 Plan become exercisable in
twenty percent (20%) installments on each of the first five anniversaries of the
date of grant. The option recipients, including Mr. Lowe, will receive value
from these grants only to the extent that the price of Bancshares' Common Stock
exceeds the grant price.

MATCHING CONTRIBUTIONS

The Bank Savings Plan is a voluntary defined contribution benefit plan
designed to provide additional incentive and retirement security for eligible
employees of the Bank. All Bank employees over the age of 21 are eligible to
participate in the Bank Savings Plan. The executive officers of Bancshares
participate in the Bank Savings Plan on the same basis as all other eligible
employees of the Bank. Under the Bank Savings Plan, each eligible employee of
the Bank may elect to contribute on a pre-tax basis to the Bank Savings Plan 2%
to 15% of his or her compensation, subject to certain limitations that may lower
the maximum contributions of more highly compensated participants.

At the beginning of each year, the Bank determines the amount of its
matching contributions to be made during the year. In 1999, the Bank's matching
contributions totaled $193,434.05, including $4,800 contributed to Mr. Lowe,
$4,214 contributed to Mr. Oliver and $4,493 contributed to Mr. Sherron.

EMPLOYMENT CONTINUITY AGREEMENTS

In 1998, the Committee recommended to Bancshares' Board of Directors
approval of Employment Continuity Agreements (the " Agreements") for Messrs.
Lowe, Oliver and Sherron, together with seven other key management employees,
and all Agreements were approved by the Bancshares' Board of Directors during
1998.

The Board believes that Bancshares, as a publicly held corporation, is
subject to the possibility of a change in control and that such possibility may
generate uncertainty on the part of the executive officers and other key
management employees, which could result in their departure from Bancshares or
their distraction from their operating responsibilities. Both the Committee and
Bancshares' Board of Directors recognize that outstanding and committed
management is essential to advancing the best interests of Bancshares and its
shareholders. The Board of Directors believes that the Agreements will give
Bancshares' executive officers and key management employees certain employment
security, which the Board of Directors will secure their continued services in
the performance of both regular duties and any extra duties required of them
during periods of uncertainty. Mr. Lowe's Agreement has a two-year rolling term
and the other Agreements have a one-year rolling term. Additionally, each
Agreement provides for severance benefits in the event of a change of control.
Under these provisions, Mr. Lowe would be entitled to an amount equal to three
times his then current salary payable in

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thirty-six monthly installments. The executives, other than Mr. Lowe, would be
entitled an amount equal to their then current salary payable in monthly
installments over twelve months.

This report is submitted by the Stock Option and Compensation Committee
of the Board of Directors of Bancshares.

STOCK OPTION AND COMPENSATION COMMITTEE:

Robert B. Smith, Jr., Chairman
Michael S. Albert
Burr W. Sullivan
Roberts E. Timberlake
Lloyd G. Walter, Jr.
Julius S. Young, Jr.

COMPENSATION OF DIRECTORS

Each member of the Board of Directors of Bancshares receives a fee of
$300 for each Board meeting attended, plus an annual retainer of $4,000. Each
non-management director receives a fee of $200 for each committee meeting of
Bancshares and the Bank that he or she attends. Each year Bancshares also grants
each non-management director a five-year option to purchase 625 shares of Common
Stock. The exercise price of each option is the fair market value of the Common
Stock on the date of grant. The option is granted on the date of the annual
shareholders' meeting.

In addition, directors have an opportunity to participate in
Bancshares' Deferred Compensation Plan for Directors (the "Deferred Plan"),
under which a director may defer a designated amount of his or her annual
compensation until he or she retires, dies while still a director, becomes
permanently disabled or otherwise discontinues service as a director. Interest
on each director's deferred account is credited at the end of each month at a
rate of six percent per annum. Each director's interest in the Deferred Plan is
nonassignable, although each director may name a beneficiary to receive his or
her deferred compensation in the event of the director's death. During the last
fiscal year, each director allocated 100% of his or her 1999 director's fees to
his or her deferred account.

In July 1999, the Stock Option and Compensation Committee (the
"Committee"), with assistance of a benefits management consulting firm and
advice of legal counsel, began an extensive study and review of Bancshares'
compensation policies and practices for directors. The Committee believes in the
importance of maintaining Bancshares' policies and practices in a manner
consistent with current trends in director compensation. The Committee
determined that compensation paid to the directors should be comprised of three
elements: (i) a quarterly retainer for services; (ii) monthly meeting fees; and
(iii) fees for serving on committees. In November

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1999, upon recommendation by the Committee, the Bancshares' Board of Directors
adopted resolutions amending and restating the Deferred Plan effective January
1, 2000, by changing the manner in which the directors defer their compensation.
The amended Deferred Plan requires that the quarterly retainer for services and
the monthly meeting fees be paid in shares of Common Stock of the Company at
their then current fair market value and that the fees paid for serving on
committees shall be paid currently to the directors in cash.

Prior to the beginning of each calendar year, the directors will be
entitled to elect to receive currently the shares of Common Stock that he or she
would earn in the coming year for the quarterly retainer and the monthly meeting
fees or to defer the receipt of those shares for credit to his or her deferred
account. In connection with the establishment of the amended Deferred Plan, each
director was given the opportunity to make a one-time election to receive the
current balance of his or her existing deferral account, in lieu of converting
his or her existing deferral account into credit for shares of Common Stock.
Each director's benefit under the Deferred Plan is nonassignable, although each
director may name a beneficiary to receive his or her deferred benefit in the
event of the director's death.

The Board believes that the amended Deferred Plan provides an
opportunity to strengthen the alignment of shareholders' and directors'
interests and reflects the current trends in director compensation. The amended
Deferred Plan also offers the Company a means to provide for the financial
security of its directors so that their services may be retained. The Board also
believes that receiving shares of the Company's Common Stock as compensation
will be recognized by shareholders as a commitment to maximize long-term
shareholder value.

The Committee will continue to study and evaluate the amount and type
of compensation paid to directors in order to maximize the alignment of the
long-term interests of Bancshares' shareholders with those of the directors.

SECTION 16 REPORTING DELINQUENCIES

Section 16(a) of the Securities Exchange Act of 1934 requires the
executive officers and directors of Bancshares and persons who beneficially own
more than ten percent of the outstanding shares of Common Stock to file with the
SEC reports disclosing their initial ownership of Common Stock, as well as
subsequent reports disclosing changes in such ownership. To Bancshares'
knowledge, based solely on a review of copies of such reports furnished to
Bancshares and written representations that no other reports were required
during the year ended December 31, 1999, the executive officers and directors of
Bancshares complied with all Section 16 (a) filing requirements.

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CERTAIN TRANSACTIONS

Certain directors and officers of Bancshares and companies with which
directors or officers are associated are customers of the Bank and as such may
from time to time borrow from the Bank within prescribed limitations. Any such
loans and commitments are made in the ordinary course of business, on terms no
more favorable, including interest rates and collateral, than those prevailing
at the time for comparable transactions with other persons, and do not involve
more than the normal risk of collectability or present other unfavorable
features. The indebtedness of all directors and officers as a group represents
13.3% of Bancshares' shareholders' equity.

PROPOSAL 2: INDEPENDENT PUBLIC ACCOUNTANTS

The Board of Directors of Bancshares has appointed the firm of
Turlington and Company, L.L.P., for the purpose of auditing the financial
statements of Bancshares and its subsidiaries for the fiscal year ended December
31, 2000, and shareholders are being asked to ratify this appointment.
Turlington and Company, L.L.P., has been employed in this capacity by Bancshares
since 1982. Fees charged by this firm are furnished at rates and upon terms that
are customarily charged by other independent auditing firms. A representative of
the firm will be present at the Annual Meeting and will have an opportunity to
make a statement if he desires to do so and to respond to appropriate questions.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE
RATIFICATION OF THE APPOINTMENT OF TURLINGTON AND COMPANY L.L.P.
AS INDEPENDENT ACCOUNTANTS AND AUDITORS.

PROPOSAL 3: SHAREHOLDER PROPOSAL RELATING TO
MINIMUM SHARE OWNERSHIP BY DIRECTORS

Bancshares has been advised that W. R. Koontz, 4630 W. Old U.S. 64,
Lexington, North Carolina 27295, has proposed the following resolution to be
considered by the shareholders of Bancshares:

"RESOLVED: That the shareholders of LSB Bancshares, Inc. recommend that
the Board of Directors take the necessary steps to amend the company's
governing instruments to adopt the following:

"Beginning on the 2000 LSB Bancshares Annual Shareholders
meeting, excluding those directors elected in 1998, 1999,
2000, each director before qualifying as a director of LSB
Bancshares and at all times while serving as a director,
excluding stock options, convertible securities and warrants,
shall own 500 shares of

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common LSB Bancshares, Inc. Should any director fail to comply
with this ownership requirement, such director shall have
sixty (60) days from the date of non-compliance to again
comply. Failure to again comply, shall result in
disqualification and such director's position shall be
declared vacant."

"REASONS: One of the most important issues before the American people
today is accountability. In our government, our schools, our legal
system and our corporations, we have lost accountability. Every one
wants to be under the umbrella of tenure, seniority, guarantee, and
Golden Parachutes. Why would management or the Board of Directors
object to its directors being mandated to own 500 shares? Generally
speaking, corporate management has created a monopoly. It does not
matter if a director knows anything about banking or financial matters,
just as long as he/she has a degree from a prestigious school or a
relationship with the officers or other directors. I am not suggesting
that the Board of Directors invest in 500 shares in some new or
unproven company, but a company with solid assets. If the Board of
Directors does not have confidence in themselves to direct LSB
profitably, surely they should not serve on the Board of Directors of
LSB Bancshares.

"If you AGREE, please mark your proxy FOR a beginning to
Accountability."

STATEMENT OF OPPOSITION

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE AGAINST THIS PROPOSAL.

Mr. Koontz's resolution is substantially identical to the resolution
that he has introduced at each Annual Meeting since 1993. Shares representing
less than 21% of the outstanding Common Stock were voted in favor of Mr.
Koontz's resolution at each of the seven previous shareholders' meetings.

The Board of Directors of Bancshares does not believe that minimum
share ownership requirements for directors of Bancshares will serve any useful
purpose. Under North Carolina law, each director of Bancshares who is also a
director of the Bank is required to own shares of Common Stock having an
aggregate book value of at least $1,000, or 119 shares at December 31, 1999. The
Board of Directors of Bancshares continues to believe that minimum share
ownership requirements for directors, over and above those imposed by North
Carolina law, would not benefit Bancshares but would unnecessarily restrict
Bancshares' ability to attract and retain qualified candidates to serve as
directors of Bancshares.

Furthermore, the Board believes that Mr. Koontz's resolution has been
substantially implemented. As of the record date, each director owned a number
of shares of Common Stock well in excess of the proposed 500 shares, the lowest
being more than 4 times the proposed

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ownership level. Additionally, under the amended Deferred Plan, certain director
compensation is required to be paid in shares of Common Stock. The Board
believes that each director's current share ownership and participation in the
amended Deferred Plan reflects each director's confidence in Bancshares.

Finally, the Board of Directors believes that the reasons given by Mr.
Koontz in support of his proposal are untrue as applied to the members of the
Board of Directors of Bancshares. The Board of Directors believes that
historically there has been no relationship between a director's contributions
to Bancshares and the level of his or her investment in Common Stock. Moreover,
contrary to Mr. Koontz's statements, directors of Bancshares are not selected on
the basis of their relationships with other directors or officers, the schools
they attended or any other improper factors. Directors are nominated by the
Board of Directors, and elected by the shareholders of Bancshares, on the basis
of their experience, individual accomplishments, knowledge, ability, judgment
and a number of other factors that may or may not include a special knowledge of
the banking industry. Bancshares has for a number of years sought to maintain
diversity on its Board of Directors, and the current composition of the Board
reflects this policy. Bancshares believes a diverse group of directors will
enhance the perspectives and collective talents of Board members and enable the
Board to better manage all facets of the business and affairs of Bancshares.
Accordingly, based on these facts, the Board of Directors strongly believes Mr.
Koontz's proposal is without merit and should not be supported by the
shareholders.

SHAREHOLDER PROPOSALS

Any shareholder proposal to be included in the proxy materials relating
to the 2001 Annual Meeting must be received by the Secretary of Bancshares, One
LSB Plaza, Lexington, North Carolina 27292, by November 22, 2000.

In addition to any other applicable requirements, for business to be
properly brought before the 2001 Annual Meeting by a shareholder, even if the
proposal is not to be included in Bancshares' proxy statement, pursuant to
Bancshares' Bylaws, the shareholder must give notice in writing to the Secretary
of Bancshares not later than January 21, 2001. As to each matter, the notice
must contain (i) a brief description of the business desired to be brought
before the annual meeting and the reasons for addressing it at the annual
meeting, (ii) the name and record address of the shareholder proposing such
business, (iii) the number of shares of Common Stock owned of record and
beneficially by such shareholder and (iv) any material interest of the
shareholder in such business.

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OTHER MATTERS

The Board of Directors of Bancshares knows of no other matters intended
to be presented for consideration at the meeting. If, however, any other matters
properly come before the meeting, it is the intention of the persons named in
the accompanying proxy to vote on such matters in accordance with their best
judgment.

Robert F. Lowe, President
March 20, 2000

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FORM OF PROXY CARD

LSB BANCSHARES, INC.
ONE LSB PLAZA
LEXINGTON, NORTH CAROLINA 27292

This Proxy is solicited on behalf of the Board of Directors.

The undersigned hereby appoints Burr W. Sullivan and Robert B. Smith, Jr., and
each of them, as proxies (and if the undersigned is a proxy, as substitute
proxies), with power of substitution, and hereby authorizes each of them to
represent and to vote, as designated on the reverse, all the shares of LSB
BANCSHARES, INC. held of record by the undersigned at the close of business on
March 6, 2000, at the Annual Meeting of Shareholders to be held on April 19,
2000, at 10:00 a.m., at the headquarters of LSB Bancshares, Inc., and at any
adjournments thereof.

This proxy, when properly executed, will be voted in the manner directed herein
by the undersigned shareholder. If no direction is made, this proxy will be
voted for all nominees for Director, for Proposal 2 and against Proposal 3.

If the shareholder is a participant in the Shareholders Dividend Reinvestment
and Stock Purchase Plan, the proxy card represents the number of shares in the
dividend reinvestment account as well as shares owned of record directly by the
shareholder.

-------------------------------------------------------------
PLEASE VOTE, DATE AND SIGN ON THE REVERSE AND RETURN PROMPTLY
IN THE ENCLOSED ENVELOPE
-------------------------------------------------------------

Please sign exactly as your name(s) appear(s) on the reverse. When shares are
held by joint owners, both should sign. When signing as an executor,
administrator, trustee, or guardian, please give full title as such. If a
corporation, please sign in full corporate name by the president or other
authorized officer. If a partnership, please sign in the partnership name by an
authorized person.

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

HAS YOUR ADDRESS CHANGED?

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

[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE

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

LSB BANCSHARES, INC.

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

Mark box at right if an address change has been noted on the [ ]
reverse side of this card.
CONTROL NUMBER:
RECORD DATE SHARES:

----------------------------
Please be sure to sign and date this Proxy Date
- --------------------------------------------------------------------------------

- ----------------------------- -----------------------------
Shareholder sign above Co-owner sign above
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR ALL NOMINEES."
- --------------------------------------------------------------------------------
For All For All
1. Election of Directors: Nominees Withhold Except

(1) Robert F. Lowe [ ] [ ] [ ]
(2) Roberts E. Timberlake
(3) Lloyd G. Walter, Jr.
(4) Julius S. Young, Jr.
(5) Sue H. Hunter

INSTRUCTION: To withhold authority to vote for any individual nominee, mark the
"For All Except" box and strike a line through the names(s) of the nominee(s) in
the list provided above. Your shares will be voted for the remaining nominee(s).

- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL 2.
- --------------------------------------------------------------------------------

For Against Abstain

2. Proposal to ratify the appointment of [ ] [ ] [ ]
Turlington and Company, L.L.P., Certified
Public Accountants, for the year ending
December 31, 2000.

- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" PROPOSAL 3.
- --------------------------------------------------------------------------------

For Against Abstain

3. Shareholder proposal by W. R. Koontz [ ] [ ] [ ]
relating to minimum share ownership
requirement for directors.

4. In their discretion, the proxies are authorized to vote upon such other
business and matters as may properly come before the meeting or at any
adjournment(s) thereof.

DETACH CARD