<PAGE>
 
================================================================================
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM S-8

                             REGISTRATION STATEMENT
                                     UNDER
                           THE SECURITIES ACT OF 1933

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

                           STONE STREET BANCORP, INC.
             (Exact name of Registrant as specified in its charter)
        North Carolina                              56-1949352
 (State or other jurisdiction                    (I.R.S. Employer
of incorporation or organization)                 Identification No.)
                             232 South Main Street
                        Mocksville, North Carolina 27028
                    (Address of Principal Executive Offices)

                  STONE STREET BANCORP, INC. STOCK OPTION PLAN
                           (Full title of the Plans)

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

                           J. CHARLES DUNN, President
                           Stone Street Bancorp, Inc.
                             232 South Main Street
                        Mocksville, North Carolina 27028
                                 (704) 634-5936
  (Name and address, including zip code, and telephone number, including area
                          code, of agent for service)

                                  Copies to:
                             EDWARD C. WINSLOW III
                                JEAN C. BROOKS
                           Brooks, Pierce, McLendon,
                          Humphrey & Leonard, L.L.P.
                            2000 Renaissance Plaza
                             Post Office Box 26000
                       Greensboro, North Carolina 27420

                        CALCULATION OF REGISTRATION FEE
<TABLE> 
<CAPTION> 
===================================================================================================
     Title of Securities       Amount to be   Proposed Maximum   Proposed Maximum     Amount of
      to be Registered         Registered/1/   Offering Price   Aggregate Offering   Registration
                                                 Per Unit           Price/4/            Fee
===================================================================================================
<S>                           <C>            <C>                <C>                  <C>
Common Stock, no par value       182,505/2/      $25.625/3/        $4,676,690.60      $1,417.18
                                                 
==================================================================================================
</TABLE>

                            (Footnotes on Next Page)

     This Registration Statement shall become effective upon filing in
accordance with Section 8(a) of the Securities Act of 1933, as amended, and 17
C.F.R. (S)230.462.
<PAGE>
 
       /1/Together with an indeterminate number of additional shares which may
be necessary to adjust the number of shares reserved for issuance pursuant to
the Stone Street Bancorp, Inc. Stock Option Plan ("Stock Option Plan"), as a
result of a reclassification, reorganization, recapitalization, stock split,
stock dividend or similar occurrence which makes an adjustment of shares just
and appropriate.

       /2/Represents the total number of shares which may be issued pursuant to
options granted under the Stock Option Plan.

       /3/Assumes a value per share underlying options granted under the Stock
Option Plan equal to $25.625, which was the price per share paid on May 8,
1997, which was the closing market price of Stone Street Bancorp, Inc. common
stock on the American Stock Exchange on May 8, 1997.

       /4/Estimated total for the purposes of calculating the registration fee
in accordance with Rule 457(c) and (h).
================================================================================
<PAGE>
 
                                     Part I
              INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS

Item I.  Plan Information.

     This Registration Statement on Form S-8 relates to the registration of up
to 182,505 shares of common stock, no par value, of Stone Street Bancorp, Inc.
(the "Registrant") which are reserved for issuance pursuant to options which
have been granted under the Stone Street Bancorp, Inc. Stock Option Plan
("Stock Option Plan").  This Registration Statement also relates to an
indeterminent number of additional shares which may be necessary to adjust the
number of shares reserved for issuance pursuant to the Stock Option Plan as a
result of a reclassification, reorganization, recapitalization, stock split,
stock dividend or similar occurrence which makes an adjustment of shares just
and appropriate. Documents containing the information specified in Part I of
Form S-8 will be sent or given to the participants in the Stock Option Plan as
specified by Rule 428(b)(1).  Such documents are not filed with the Securities
and Exchange Commission (the "Commission") either as part of this Registration
Statement or as prospectuses or prospectus supplements pursuant to Rule 424 in
reliance on Rule 428.

Item 2.  Registration Information and Employee Plan Annual Information.

     The required statement is contained in the prospectus to be delivered
pursuant to Part I of this Registration Statement as specified by Rule
428(b)(1).

                                  Part II
             INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 3.  Incorporation of Documents by Reference.

     The following documents filed with the Commission are incorporated herein
by reference:

     (a)    The Registrant's Annual Report on Form 10 for the fiscal year ended
            December 31, 1996.

     (b)    The description of the Registrant's Common Stock contained in the
            Registrant's S-1 Registration Statement, Registration No. 33-80085,
            incorporated by reference in the Registration Statement on Form 8-A
            filed with the Commission under Section 12(b) of the Securities
            Exchange Act of 1934, as amended (the "Exchange Act"), on February
            22, 1996 (File No. 001-14230), including any amendment or report
            filed for the purpose of updating such description.

     All documents subsequently filed by the Registrant and the Stock Option
Plan pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act,
prior to the filing of a post-effective amendment which indicates that all
securities registered hereby have been sold or which deregisters all
securities then remaining unsold, shall be deemed incorporated by reference
herein and to be a part hereof from the date of the filing of such documents.
Any statement contained in this Registration Statement, or in a document
incorporated or deemed to be incorporated by reference herein, shall be deemed
to be modified or superseded for purposes of this Registration Statement to
the extent that a statement contained herein, or in any other subsequently
filed document which is also incorporated or deemed to be incorporated by
reference herein, modifies or supersedes such statement.  Any such
<PAGE>
 
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Registration Statement.

Item 4.  Description of Securities.

        Not applicable.

Item 5.  Interests of Named Experts and Counsel.

        Not applicable.

Item 6.  Indemnification of Directors and Officers.

        The Registrant's Articles of Incorporation provide that to the fullest
extent permitted by the North Carolina Business Corporation Act (the "NCBCA"),
no person who serves as a director shall be personally liable to the Registrant
or any of its stockholders or otherwise for monetary damages for breach of any
duty as director. The Registrant's Bylaws state that any person who at any time
serves or has served as a director or officer of the Registrant, or who, while
serving as a director or officer of the Registrant, serves or has served at the
request of the Registrant as a director, officer, partner, trustee, employer or
agent of another corporation, partnership, joint venture, trust or other
enterprise, or as a trustee or administrator under an employee benefit plan,
shall have a right to be indemnified by the Registrant to the fullest extent
permitted by law against liability and litigation expense arising out of such
status or activities in such capacity. "Liability and litigation expense" is
defined in the Bylaws as including costs and expenses of litigation (including
reasonable attorneys' fees), judgments, fines and amounts paid in settlement
which are actually and reasonably incurred in connection with or as a
consequence of any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, including appeals.

       Litigation expense, as described above, may be paid by the Registrant in
advance of the final disposition or termination of the litigation matter, if the
Registrant receives an undertaking, dated, in writing and signed by the person
to be indemnified, to repay all such sums unless such person is ultimately
determined to be entitled to be indemnified by the Registrant as provided in the
Registrant's Bylaws.

       Sections 55-8-50 through 55-8-58 of the NCBCA contain provisions
prescribing the extent to which directors and officers shall or may be
indemnified. Section 55-8-51 of the NCBCA permits a corporation, with certain
exceptions, to indemnify a present or former director against liability if (i)
the director conducted himself in good faith, (ii) the director reasonably
believed (x) that the director's conduct in the director's official capacity
with the corporation was in its best interests and (y) in all other cases the
director's conduct was at least not opposed to the corporation's best interests,
and (iii) in the case of any criminal proceeding, the director had no reasonable
cause to believe the director's conduct was unlawful. A corporation may not
indemnify a director in connection with a proceeding by or in the right of the
corporation in which the director was adjudged liable to the corporation or in
connection with a proceeding charging improper personal benefit to the director.
The above standard of conduct is determined by the board of directors, or a
committee or special legal counsel or the shareholders as prescribed in Section
55-8-55.

                                       2
<PAGE>
 
       Sections 55-8-52 and 55-8-56 of the NCBCA require a corporation to
indemnify a director or officer in the defense of any proceeding to which the
director or officer was a party against reasonable expenses when the director or
officer is wholly successful in the director's or officer's defense, unless the
articles of incorporation provide otherwise. Upon application, the court may
order indemnification of the director or officer if the director or officer is
adjudged fairly and reasonably so entitled under Section 55-8-54.

        In addition, Section 55-8-57 permits a corporation to provide for
indemnification of directors, officers, employees or agents, in its articles of
incorporation or bylaws or by contract or resolution, against liability in
various proceedings and to purchase and maintain insurance policies on behalf of
these individuals.

       The foregoing is only a general summary of certain aspects of North
Carolina law dealing with indemnification of directors and officers and does not
purport to be complete. It is qualified in its entirety by reference to the
relevant statutes, which contain detailed specific provisions regarding the
circumstances under which and the person for whose benefit indemnifications
shall or may be made.

Item 7.  Exemption from Registration Claimed.
 
        Not applicable.

Item 8.  Exhibits

        The following exhibits are filed with or incorporated by reference into
this Registration Statement on Form S-8 (numbering corresponds to Exhibit
Table in Item 601 of Regulation S-K):

<TABLE>
<CAPTION>
 
        Exhibit No.              Description of Document
        -----------              -----------------------              
        <S>            <C>
        (3)(i)         The Registrant's Articles of Incorporation
                       (incorporated by reference to Exhibit 3.1 of the
                       Registrant's S-1 Registration Statement,
                       Registration No. 33-80085)

        (3)(ii)        The Registrant's Bylaws (incorporated by reference
                       to Exhibit 3.2 of the Registrant's S-1 Registration
                       Statement, Registration No. 33-80085)

        (4)            Specimen Stock Certificate for the Registrant
                       (incorporated by reference to Exhibit 4.1 of the
                       Registrant's S-1 Registration Statement,
                       Registration No. 33-80085)

        (5)            Opinion of Brooks, Pierce, McLendon, Humphrey
                       & Leonard, L.L.P. as to legality of securities being
                       registered

        (10)           Stone Street Bancorp, Inc. Stock Option Plan
</TABLE>

                                       3
<PAGE>
 
<TABLE>
<CAPTION>

        <S>            <C>
        (23)(i)        Consent of Brooks, Pierce, McLendon, Humphrey
                       & Leonard, L.L.P. (included in Exhibit 5)

        (23)(ii)       Consent of Weir Smith Jones Miller & Elliott,
                       CPAs, PA

</TABLE>

Item 9.  Undertakings.

       The undersigned Registrant hereby undertakes:

       (1)   To file, during any period in which offers or sales are being made,
a post-effective amendment to the Registration Statement:

             (i)   To include any prospectus required by Section 10(a)(3) of the
                   1933 Act;

             (ii)  To reflect in the prospectus any facts or events arising
                   after the effective date of the Registration Statement (or
                   the most recent post-effective amendment thereof) which,
                   individually or in the aggregate, represent a fundamental
                   change in the information set forth in the Registration
                   Statement. Notwithstanding the foregoing, any increase or
                   decrease in volume of securities offered (if the total dollar
                   value of securities offered would not exceed that which was
                   registered) and any deviation from the low or high end of the
                   estimated maximum offering range may be reflected in the form
                   of prospectus filed with the Commission pursuant to Rule
                   424(b) if, in the aggregate, the changes in volume and price
                   represent no more than a 20% change in the maximum aggregate
                   offering price set forth in the "Calculation of Registration
                   Fee" table in the Registration Statement;

             (iii) To include any material information with respect to the plan
                   of distribution not previously disclosed in the Registration
                   Statement or any material change to such information in the
                   Registration Statement;

       Provided, however, that paragraphs (1)(i) and (1)(ii) above do not apply
       --------  -------                                                       
if the Registration Statement is on Form S-3 or Form S-8 and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the
Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in the Registration Statement.

       (2)   That, for the purpose of determining any liability under the 1933
Act, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.

       (3)   To remove from registration by means of a post-effective amendment
any of the securities being registered that remain unsold at the termination of
the offering.

                                       4
<PAGE>
 
       The undersigned Registrant hereby undertakes, that, for purposes of
determining any liability under the 1933 Act, each filing of the Registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act
(and, where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference
in the Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

       Insofar as indemnification for liabilities arising under the 1933 Act may
be permitted to directors, officers, and controlling persons of the Registrant
pursuant to the provisions discussed in Item 6 thereof, or otherwise, the
Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the 1933 Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit, or proceeding) is asserted by such
director, officer, or controlling person in connection with the securities being
registered hereby, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the 1933 Act and will be governed by the
final adjudication of such issue.

                                       5
<PAGE>
 
                                   SIGNATURES


       The Registrant. Pursuant to the requirements of the Securities Act of
1933, the Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Mocksville, State of North Carolina, on the 8th
day of May, 1997.

                                      STONE STREET BANCORP, INC.
                                      Registrant


                                      By:  /s/ J. Charles Dunn
                                         ---------------------------------------
                                         J. Charles Dunn, President


       Each person whose individual signature appears below hereby makes,
constitutes and appoints J. Charles Dunn to sign for such person and in such
person's name and capacity indicated below, any and all amendments to this
Registration Statement, including any and all post-effective amendments.
<PAGE>
 
       Pursuant to the requirements of the Securities Act of 1933, this
  Registration Statement has been signed by the following persons in the
  capacities and on the dates indicated.

<TABLE>
<S>                                 <C> 
Date: May 8, 1997                          By:  /s/ J. Charles Dunn
                                                -------------------------------------------
                                                J. Charles Dunn, President and Director
                                                (Principal Executive Officer)
                               
Date: May 8, 1997                          By:  /s/ Marjorie D. Foster
                                                -------------------------------------------
                                                Marjorie D. Foster, Controller (Principal
                                                Financial Officer and Principal Accounting
                                                Officer)
                               
Date: May 8, 1997                          By:  /s/ Donald G. Bowles
                                                -------------------------------------------
                                                Donald G. Bowles, Director
                               
Date: May 8, 1997                          By:  /s/ Robert B. Hall
                                                -------------------------------------------
                                                Robert B. Hall, Director
                               
Date: May 8, 1997                          By:  /s/ J. Roy Harris
                                                -------------------------------------------
                                                J. Roy Harris, Director
                               
Date: May 8, 1997                          By:  /s/ Claude R. Horn, Jr.
                                                -------------------------------------------
                                                Claude R. Horn, Jr., Director
                               
Date: May 8, 1997                          By:  /s/ William F. Junker
                                                -------------------------------------------
                                                William F. Junker, Director
                               
Date: May 8, 1997                          By:  /s/ George W. Martin
                                                -------------------------------------------
                                                George W. Martin, Director
                               
Date: May 8, 1997                          By:  /s/ Terry L. Bralley
                                                -------------------------------------------
                                                Terry L. Bralley, Director  
                               
Date: May 8, 1997                          By:  /s/ Ronald H. Vogler
                                                -------------------------------------------
                                                Ronald H. Vogler, Director
</TABLE>
<PAGE>
 
                                 EXHIBIT INDEX
<TABLE>
<CAPTION> 
                                                                     Method of
Exhibit No.                 Description                               Filing
----------                  -----------                             -----------
   <S>          <C>                                              <C>            
   (3)(i)       The Registrant's Articles of Incorporation        Incorporated by
                                                                  Reference

   (3)(ii)      The Registrant's Bylaws                           Incorporated by
                                                                  Reference
                                                                              
   (4)          Specimen Stock Certificate for the Registrant     Incorporated by
                                                                  Reference

   (5)          Opinion of Brooks, Pierce, McLendon,              Filed Herewith
                Humphrey & Leonard, L.L.P. as to legality of
                securities being registered

   (10)         Stone Street Bancorp, Inc. Stock Option Plan      Filed Herewith

   (23)(i)      Consent of Brooks, Pierce, McLendon,              Filed Herewith
                Humphrey & Leonard, L.L.P. (included in
                Exhibit 5)

   (23)(ii)     Consent of Weir Smith Jones Miller & Elliott,     Filed Herewith
                CPAs, PA
</TABLE>

                                       7
[{"type": "S-8", "sequence": "1", "description": "REGISTRATION STATEMENT", "secsgml_size_bytes": 24252}]
{"company-data": {"conformed-name": "STONE STREET BANCORP INC", "cik": "0001004643", "assigned-sic": "6036", "irs-number": "561949352", "state-of-incorporation": "NC", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "333-26771", "film-number": "97598955"}, "business-address": {"street1": "232 S MAIN ST", "city": "MOCKSVILLE", "state": "NC", "zip": "27028", "phone": "7046345936"}, "mail-address": {"street1": "232 SOUTH MAIN STREET", "city": "MOCKSVILLE", "state": "NC", "zip": "27028"}}
================================================================================
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM S-8

                             REGISTRATION STATEMENT
                                     UNDER
                           THE SECURITIES ACT OF 1933

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

                           STONE STREET BANCORP, INC.
             (Exact name of Registrant as specified in its charter)
        North Carolina                              56-1949352
 (State or other jurisdiction                    (I.R.S. Employer
of incorporation or organization)                 Identification No.)
                             232 South Main Street
                        Mocksville, North Carolina 27028
                    (Address of Principal Executive Offices)

                  STONE STREET BANCORP, INC. STOCK OPTION PLAN
                           (Full title of the Plans)

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

                           J. CHARLES DUNN, President
                           Stone Street Bancorp, Inc.
                             232 South Main Street
                        Mocksville, North Carolina 27028
                                 (704) 634-5936
  (Name and address, including zip code, and telephone number, including area
                          code, of agent for service)

                                  Copies to:
                             EDWARD C. WINSLOW III
                                JEAN C. BROOKS
                           Brooks, Pierce, McLendon,
                          Humphrey & Leonard, L.L.P.
                            2000 Renaissance Plaza
                             Post Office Box 26000
                       Greensboro, North Carolina 27420

                        CALCULATION OF REGISTRATION FEE
===================================================================================================
     Title of Securities       Amount to be   Proposed Maximum   Proposed Maximum     Amount of
      to be Registered         Registered/1/   Offering Price   Aggregate Offering   Registration
                                                 Per Unit           Price/4/            Fee
===================================================================================================
Common Stock, no par value       182,505/2/      $25.625/3/        $4,676,690.60      $1,417.18
                                                 
==================================================================================================
(Footnotes on Next Page)

     This Registration Statement shall become effective upon filing in
accordance with Section 8(a) of the Securities Act of 1933, as amended, and 17
C.F.R. (S)230.462.
/1/Together with an indeterminate number of additional shares which may
be necessary to adjust the number of shares reserved for issuance pursuant to
the Stone Street Bancorp, Inc. Stock Option Plan ("Stock Option Plan"), as a
result of a reclassification, reorganization, recapitalization, stock split,
stock dividend or similar occurrence which makes an adjustment of shares just
and appropriate.

       /2/Represents the total number of shares which may be issued pursuant to
options granted under the Stock Option Plan.

       /3/Assumes a value per share underlying options granted under the Stock
Option Plan equal to $25.625, which was the price per share paid on May 8,
1997, which was the closing market price of Stone Street Bancorp, Inc. common
stock on the American Stock Exchange on May 8, 1997.

       /4/Estimated total for the purposes of calculating the registration fee
in accordance with Rule 457(c) and (h).
================================================================================
Part I
              INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS

Item I.  Plan Information.

     This Registration Statement on Form S-8 relates to the registration of up
to 182,505 shares of common stock, no par value, of Stone Street Bancorp, Inc.
(the "Registrant") which are reserved for issuance pursuant to options which
have been granted under the Stone Street Bancorp, Inc. Stock Option Plan
("Stock Option Plan").  This Registration Statement also relates to an
indeterminent number of additional shares which may be necessary to adjust the
number of shares reserved for issuance pursuant to the Stock Option Plan as a
result of a reclassification, reorganization, recapitalization, stock split,
stock dividend or similar occurrence which makes an adjustment of shares just
and appropriate. Documents containing the information specified in Part I of
Form S-8 will be sent or given to the participants in the Stock Option Plan as
specified by Rule 428(b)(1).  Such documents are not filed with the Securities
and Exchange Commission (the "Commission") either as part of this Registration
Statement or as prospectuses or prospectus supplements pursuant to Rule 424 in
reliance on Rule 428.

Item 2.  Registration Information and Employee Plan Annual Information.

     The required statement is contained in the prospectus to be delivered
pursuant to Part I of this Registration Statement as specified by Rule
428(b)(1).

                                  Part II
             INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 3.  Incorporation of Documents by Reference.

     The following documents filed with the Commission are incorporated herein
by reference:

     (a)    The Registrant's Annual Report on Form 10 for the fiscal year ended
            December 31, 1996.

     (b)    The description of the Registrant's Common Stock contained in the
            Registrant's S-1 Registration Statement, Registration No. 33-80085,
            incorporated by reference in the Registration Statement on Form 8-A
            filed with the Commission under Section 12(b) of the Securities
            Exchange Act of 1934, as amended (the "Exchange Act"), on February
            22, 1996 (File No. 001-14230), including any amendment or report
            filed for the purpose of updating such description.

     All documents subsequently filed by the Registrant and the Stock Option
Plan pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act,
prior to the filing of a post-effective amendment which indicates that all
securities registered hereby have been sold or which deregisters all
securities then remaining unsold, shall be deemed incorporated by reference
herein and to be a part hereof from the date of the filing of such documents.
Any statement contained in this Registration Statement, or in a document
incorporated or deemed to be incorporated by reference herein, shall be deemed
to be modified or superseded for purposes of this Registration Statement to
the extent that a statement contained herein, or in any other subsequently
filed document which is also incorporated or deemed to be incorporated by
reference herein, modifies or supersedes such statement.  Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Registration Statement.

Item 4.  Description of Securities.

        Not applicable.

Item 5.  Interests of Named Experts and Counsel.

        Not applicable.

Item 6.  Indemnification of Directors and Officers.

        The Registrant's Articles of Incorporation provide that to the fullest
extent permitted by the North Carolina Business Corporation Act (the "NCBCA"),
no person who serves as a director shall be personally liable to the Registrant
or any of its stockholders or otherwise for monetary damages for breach of any
duty as director. The Registrant's Bylaws state that any person who at any time
serves or has served as a director or officer of the Registrant, or who, while
serving as a director or officer of the Registrant, serves or has served at the
request of the Registrant as a director, officer, partner, trustee, employer or
agent of another corporation, partnership, joint venture, trust or other
enterprise, or as a trustee or administrator under an employee benefit plan,
shall have a right to be indemnified by the Registrant to the fullest extent
permitted by law against liability and litigation expense arising out of such
status or activities in such capacity. "Liability and litigation expense" is
defined in the Bylaws as including costs and expenses of litigation (including
reasonable attorneys' fees), judgments, fines and amounts paid in settlement
which are actually and reasonably incurred in connection with or as a
consequence of any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, including appeals.

       Litigation expense, as described above, may be paid by the Registrant in
advance of the final disposition or termination of the litigation matter, if the
Registrant receives an undertaking, dated, in writing and signed by the person
to be indemnified, to repay all such sums unless such person is ultimately
determined to be entitled to be indemnified by the Registrant as provided in the
Registrant's Bylaws.

       Sections 55-8-50 through 55-8-58 of the NCBCA contain provisions
prescribing the extent to which directors and officers shall or may be
indemnified. Section 55-8-51 of the NCBCA permits a corporation, with certain
exceptions, to indemnify a present or former director against liability if (i)
the director conducted himself in good faith, (ii) the director reasonably
believed (x) that the director's conduct in the director's official capacity
with the corporation was in its best interests and (y) in all other cases the
director's conduct was at least not opposed to the corporation's best interests,
and (iii) in the case of any criminal proceeding, the director had no reasonable
cause to believe the director's conduct was unlawful. A corporation may not
indemnify a director in connection with a proceeding by or in the right of the
corporation in which the director was adjudged liable to the corporation or in
connection with a proceeding charging improper personal benefit to the director.
The above standard of conduct is determined by the board of directors, or a
committee or special legal counsel or the shareholders as prescribed in Section
55-8-55.

                                       2
Sections 55-8-52 and 55-8-56 of the NCBCA require a corporation to
indemnify a director or officer in the defense of any proceeding to which the
director or officer was a party against reasonable expenses when the director or
officer is wholly successful in the director's or officer's defense, unless the
articles of incorporation provide otherwise. Upon application, the court may
order indemnification of the director or officer if the director or officer is
adjudged fairly and reasonably so entitled under Section 55-8-54.

        In addition, Section 55-8-57 permits a corporation to provide for
indemnification of directors, officers, employees or agents, in its articles of
incorporation or bylaws or by contract or resolution, against liability in
various proceedings and to purchase and maintain insurance policies on behalf of
these individuals.

       The foregoing is only a general summary of certain aspects of North
Carolina law dealing with indemnification of directors and officers and does not
purport to be complete. It is qualified in its entirety by reference to the
relevant statutes, which contain detailed specific provisions regarding the
circumstances under which and the person for whose benefit indemnifications
shall or may be made.

Item 7.  Exemption from Registration Claimed.
 
        Not applicable.

Item 8.  Exhibits

        The following exhibits are filed with or incorporated by reference into
this Registration Statement on Form S-8 (numbering corresponds to Exhibit
Table in Item 601 of Regulation S-K):
Exhibit No.              Description of Document
        -----------              -----------------------
(3)(i)         The Registrant's Articles of Incorporation
                       (incorporated by reference to Exhibit 3.1 of the
                       Registrant's S-1 Registration Statement,
                       Registration No. 33-80085)

        (3)(ii)        The Registrant's Bylaws (incorporated by reference
                       to Exhibit 3.2 of the Registrant's S-1 Registration
                       Statement, Registration No. 33-80085)

        (4)            Specimen Stock Certificate for the Registrant
                       (incorporated by reference to Exhibit 4.1 of the
                       Registrant's S-1 Registration Statement,
                       Registration No. 33-80085)

        (5)            Opinion of Brooks, Pierce, McLendon, Humphrey
                       & Leonard, L.L.P. as to legality of securities being
                       registered

        (10)           Stone Street Bancorp, Inc. Stock Option Plan
3
(23)(i)        Consent of Brooks, Pierce, McLendon, Humphrey
                       & Leonard, L.L.P. (included in Exhibit 5)

        (23)(ii)       Consent of Weir Smith Jones Miller & Elliott,
                       CPAs, PA
Item 9.  Undertakings.

       The undersigned Registrant hereby undertakes:

       (1)   To file, during any period in which offers or sales are being made,
a post-effective amendment to the Registration Statement:

             (i)   To include any prospectus required by Section 10(a)(3) of the
                   1933 Act;

             (ii)  To reflect in the prospectus any facts or events arising
                   after the effective date of the Registration Statement (or
                   the most recent post-effective amendment thereof) which,
                   individually or in the aggregate, represent a fundamental
                   change in the information set forth in the Registration
                   Statement. Notwithstanding the foregoing, any increase or
                   decrease in volume of securities offered (if the total dollar
                   value of securities offered would not exceed that which was
                   registered) and any deviation from the low or high end of the
                   estimated maximum offering range may be reflected in the form
                   of prospectus filed with the Commission pursuant to Rule
                   424(b) if, in the aggregate, the changes in volume and price
                   represent no more than a 20% change in the maximum aggregate
                   offering price set forth in the "Calculation of Registration
                   Fee" table in the Registration Statement;

             (iii) To include any material information with respect to the plan
                   of distribution not previously disclosed in the Registration
                   Statement or any material change to such information in the
                   Registration Statement;

       Provided, however, that paragraphs (1)(i) and (1)(ii) above do not apply
       --------  -------                                                       
if the Registration Statement is on Form S-3 or Form S-8 and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the
Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in the Registration Statement.

       (2)   That, for the purpose of determining any liability under the 1933
Act, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.

       (3)   To remove from registration by means of a post-effective amendment
any of the securities being registered that remain unsold at the termination of
the offering.

                                       4
The undersigned Registrant hereby undertakes, that, for purposes of
determining any liability under the 1933 Act, each filing of the Registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act
(and, where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference
in the Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

       Insofar as indemnification for liabilities arising under the 1933 Act may
be permitted to directors, officers, and controlling persons of the Registrant
pursuant to the provisions discussed in Item 6 thereof, or otherwise, the
Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the 1933 Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit, or proceeding) is asserted by such
director, officer, or controlling person in connection with the securities being
registered hereby, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the 1933 Act and will be governed by the
final adjudication of such issue.

                                       5
SIGNATURES

       The Registrant. Pursuant to the requirements of the Securities Act of
1933, the Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Mocksville, State of North Carolina, on the 8th
day of May, 1997.

                                      STONE STREET BANCORP, INC.
                                      Registrant

                                      By:  /s/ J. Charles Dunn
                                         ---------------------------------------
                                         J. Charles Dunn, President

       Each person whose individual signature appears below hereby makes,
constitutes and appoints J. Charles Dunn to sign for such person and in such
person's name and capacity indicated below, any and all amendments to this
Registration Statement, including any and all post-effective amendments.
Pursuant to the requirements of the Securities Act of 1933, this
  Registration Statement has been signed by the following persons in the
  capacities and on the dates indicated.
Date: May 8, 1997                          By:  /s/ J. Charles Dunn
                                                -------------------------------------------
                                                J. Charles Dunn, President and Director
                                                (Principal Executive Officer)
                               
Date: May 8, 1997                          By:  /s/ Marjorie D. Foster
                                                -------------------------------------------
                                                Marjorie D. Foster, Controller (Principal
                                                Financial Officer and Principal Accounting
                                                Officer)
                               
Date: May 8, 1997                          By:  /s/ Donald G. Bowles
                                                -------------------------------------------
                                                Donald G. Bowles, Director
                               
Date: May 8, 1997                          By:  /s/ Robert B. Hall
                                                -------------------------------------------
                                                Robert B. Hall, Director
                               
Date: May 8, 1997                          By:  /s/ J. Roy Harris
                                                -------------------------------------------
                                                J. Roy Harris, Director
                               
Date: May 8, 1997                          By:  /s/ Claude R. Horn, Jr.
                                                -------------------------------------------
                                                Claude R. Horn, Jr., Director
                               
Date: May 8, 1997                          By:  /s/ William F. Junker
                                                -------------------------------------------
                                                William F. Junker, Director
                               
Date: May 8, 1997                          By:  /s/ George W. Martin
                                                -------------------------------------------
                                                George W. Martin, Director
                               
Date: May 8, 1997                          By:  /s/ Terry L. Bralley
                                                -------------------------------------------
                                                Terry L. Bralley, Director  
                               
Date: May 8, 1997                          By:  /s/ Ronald H. Vogler
                                                -------------------------------------------
                                                Ronald H. Vogler, Director
EXHIBIT INDEX
Method of
Exhibit No.                 Description                               Filing
----------                  -----------                             -----------
(3)(i)       The Registrant's Articles of Incorporation        Incorporated by
                                                                  Reference

   (3)(ii)      The Registrant's Bylaws                           Incorporated by
                                                                  Reference
                                                                              
   (4)          Specimen Stock Certificate for the Registrant     Incorporated by
                                                                  Reference

   (5)          Opinion of Brooks, Pierce, McLendon,              Filed Herewith
                Humphrey & Leonard, L.L.P. as to legality of
                securities being registered

   (10)         Stone Street Bancorp, Inc. Stock Option Plan      Filed Herewith

   (23)(i)      Consent of Brooks, Pierce, McLendon,              Filed Herewith
                Humphrey & Leonard, L.L.P. (included in
                Exhibit 5)

   (23)(ii)     Consent of Weir Smith Jones Miller & Elliott,     Filed Herewith
                CPAs, PA
7