FIRST UNION CORP, 424B1, 1997-09-19

FIRST UNION CORP
424B1, 1997-09-19
NATIONAL COMMERCIAL BANKS

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424B1
333-35363

PROSPECTUS

52,218,844 SHARES

FIRST UNION CORPORATION

[FIRST UNION LOGO APPEARS HERE]

COMMON STOCK

OF THE 52,218,844 SHARES (AS HEREINAFTER DEFINED) OF COMMON STOCK (AS
HEREINAFTER DEFINED) BEING OFFERED HEREBY, 7,500,000 SHARES ARE BEING SOLD BY
THE CORPORATION (AS HEREINAFTER DEFINED) AND 44,718,844 SHARES ARE BEING
SOLD BY THE SELLING STOCKHOLDER (AS HEREINAFTER DEFINED). SEE "SELLING
STOCKHOLDER". THE CORPORATION WILL NOT RECEIVE ANY OF THE PROCEEDS FROM
THE SALE OF SHARES OF COMMON STOCK BY THE SELLING STOCKHOLDER. OF THE
52,218,844 SHARES OF COMMON STOCK BEING OFFERED HEREBY, 10,443,769
SHARES ARE BEING OFFERED INITIALLY OUTSIDE THE UNITED STATES AND
CANADA BY THE INTERNATIONAL UNDERWRITERS (AS HEREINAFTER DEFINED)
AND 41,775,075 SHARES ARE BEING OFFERED INITIALLY IN THE UNITED
STATES AND CANADA BY THE U.S. UNDERWRITERS (AS HEREINAFTER
DEFINED). SEE "UNDERWRITERS". THE COMMON STOCK IS LISTED ON
THE NEW YORK STOCK EXCHANGE (THE "NYSE") UNDER THE SYMBOL
"FTU". ON SEPTEMBER 18, 1997, THE REPORTED LAST SALES PRICE
OF THE COMMON STOCK ON THE NYSE COMPOSITE TAPE (AS
HEREINAFTER DEFINED) WAS $48 3/8 PER SHARE.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

PRICE $48 3/8 A SHARE
<TABLE>
<CAPTION>
UNDERWRITING
PRICE DISCOUNTS AND PROCEEDS TO
TO PUBLIC COMMISSIONS ( 1 ) CORPORATION ( 2 )
<S> <C> <C> <C>
PER SHARE......................... $48.375 $.700 $47.675
TOTAL............................. $2,526,086,579 $36,553,191 $357,562,500

PROCEEDS TO SELLING
STOCKHOLDER
<S> <C>
PER SHARE......................... $47.675
TOTAL............................. $2,131,970,888
</TABLE>

(1) THE CORPORATION AND THE SELLING STOCKHOLDER HAVE AGREED TO INDEMNIFY THE
UNDERWRITERS AGAINST CERTAIN LIABILITIES, INCLUDING LIABILITIES UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). SEE
"UNDERWRITERS".

(2) BEFORE DEDUCTING ANY EXPENSES PAYABLE BY THE CORPORATION, IF ANY. SEE
"UNDERWRITERS".

THE SHARES OF COMMON STOCK ARE OFFERED, SUBJECT TO PRIOR SALE, WHEN, AS, AND
IF ACCEPTED BY THE UNDERWRITERS NAMED HEREIN AND SUBJECT TO THE RECEIPT OF AN
OPINION FROM COUNSEL FOR THE UNDERWRITERS AS TO THE VALIDITY OF THE SHARES
OFFERED BY THE CORPORATION. IT IS EXPECTED THAT DELIVERY OF THE SHARES WILL BE
MADE ON OR ABOUT SEPTEMBER 23, 1997, AT THE OFFICE OF MORGAN STANLEY & CO.
INCORPORATED, NEW YORK, N.Y., AGAINST PAYMENT THEREFOR IN IMMEDIATELY AVAILABLE
FUNDS.

JOINT GLOBAL COORDINATORS

<TABLE>
<CAPTION>
<S> <C> <C>
SANTANDER INVESTMENT SECURITIES MORGAN STANLEY DEAN WITTER GOLDMAN, SACHS & CO.
</TABLE>

MORGAN STANLEY DEAN WITTER
GOLDMAN, SACHS INTERNATIONAL
SANTANDER INVESTMENT
UBS LIMITED
WHEAT FIRST BUTCHER SINGER

SEPTEMBER 18, 1997

<PAGE>

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE COMMON STOCK OR
ANY OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH COMMON STOCK IN
ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE THEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE CORPORATION SINCE THE DATE HEREOF OR THEREOF OR THAT THE
INFORMATION CONTAINED HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO
ITS DATE.

FOR INVESTORS OUTSIDE THE UNITED STATES: NO ACTION HAS BEEN OR WILL BE
TAKEN IN ANY JURISDICTION BY THE CORPORATION, BY THE SELLING STOCKHOLDER OR BY
ANY UNDERWRITER THAT WOULD PERMIT A PUBLIC OFFERING OF THE COMMON STOCK OR
POSSESSION OR DISTRIBUTION OF THIS PROSPECTUS IN ANY JURISDICTION WHERE ACTION
FOR THAT PURPOSE IS REQUIRED, OTHER THAN IN THE UNITED STATES. PERSONS INTO
WHOSE POSSESSION THIS PROSPECTUS COMES ARE REQUIRED BY THE CORPORATION, THE
SELLING STOCKHOLDER AND THE UNDERWRITERS TO INFORM THEMSELVES ABOUT AND TO
OBSERVE ANY RESTRICTIONS AS TO THE OFFERING OF THE COMMON STOCK AND THE
DISTRIBUTION OF THIS PROSPECTUS.

THE COMMISSIONER OF INSURANCE OF THE STATE OF NORTH CAROLINA HAS NOT
APPROVED OR DISAPPROVED THE OFFERING OF THE SHARES NOR HAS SUCH COMMISSIONER
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.

TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Cautionary Statement Concerning Forward-Looking
Statements......................................... 2
Available Information................................ 3
Incorporation of Certain Documents
by Reference....................................... 3
Prospectus Summary................................... 4
The Corporation...................................... 5
Use of Proceeds...................................... 7
Dividends and Price Range of Common Stock............ 7
Capitalization....................................... 8
Selected Financial Data.............................. 9

PAGE
<S> <C>
Certain Regulatory Considerations.................... 11
Description of Common Stock.......................... 14
Selling Stockholder.................................. 17
Underwriters......................................... 18
Certain United States Tax Consequences to Non-U.S.
Holders of Common Stock............................ 21
Validity of Shares of Common Stock................... 22
Experts.............................................. 23
</TABLE>

CERTAIN PERSONS PARTICIPATING IN THE OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK.
SPECIFICALLY, THE UNDERWRITERS MAY OVER-ALLOT IN CONNECTION WITH THIS OFFERING,
AND MAY BID FOR, AND PURCHASE, SHARES OF THE COMMON STOCK IN THE OPEN MARKET.
FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITERS".

CAUTIONARY STATEMENT CONCERNING FOWARD-LOOKING STATEMENTS

Certain statements contained in documents incorporated by reference in this
Prospectus under "Prospectus Summary", "The Corporation", and "Use of Proceeds",
including, without limitation, those concerning the Corporation's strategy and
the Corporation's expansion plans, contain certain forward-looking statements
concerning the Corporation's operations, economic performance and financial
condition. Because such statements involve risks and uncertainties, actual
results may differ materially from those expressed or implied by such
forward-looking statements. Factors that could cause such differences include,
but are not limited to, those discussed herein under "Certain Regulatory
Considerations", in the Corporation's 1997 Second Quarter Report on Form 10-Q
and in the Corporation's Current Reports on Form 8-K dated July 21, 1997, and
August 20, 1997.

<PAGE>
AVAILABLE INFORMATION

The Corporation is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (together with the rules and
regulations thereunder, the "Exchange Act"), and in accordance therewith, files
reports, proxy statements and other information with the Securities and Exchange
Commission (the "Commission"). Reports, proxy statements and other information
filed by the Corporation can be inspected and copied at the public reference
facilities maintained by the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549 and at the Commission's Regional Offices in New York (7 World Trade
Center, 13th Floor, New York, New York 10048) and Chicago (Citicorp Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661) and copies of such
materials can be obtained from the Public Reference Section of the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. Certain of
such reports, proxy statements and other information is also available from the
Commission over the Internet at http://www.sec.gov. The Common Stock is listed
and traded on the NYSE. Reports, proxy statements and other information relating
to the Corporation can also be inspected at the offices of the NYSE, 20 Broad
Street, New York, New York 10005.

This Prospectus does not contain all of the information set forth in the
Registration Statement on Form S-3, of which this Prospectus is a part, and the
exhibits th ereto (together with any amendments or supplements thereto, the
"Registration Statement"), which has been filed by the Corporation with the
Commission under the Securities Act, certain portions of which have been omitted
pursuant to the rules and regulations of the Commission and to which portions
reference is hereby made for further information.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents filed by the Corporation with the Commission (File
No. 1-10000) under Section 13(a) or 15(d) of the Exchange Act are hereby
incorporated by reference in this Prospectus:

(i) the Corporation's Annual Report on Form 10-K for the year ended
December 31, 1996;

(ii) the Corporation's Quarterly Reports on Form 10-Q for the periods ended
March 31, 1997, and June 30, 1997; and

(iii) the Corporation's Current Reports on Form 8-K dated January 13, 1997,
July 21, 1997, and August 20, 1997.

All documents filed by the Corporation pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date hereof and prior to the
termination of the offering of the Shares are hereby incorporated by reference
into this Prospectus and shall be deemed a part hereof from the date of filing
of such documents.

Any statement contained herein, in any supplement hereto or in a document
incorporated or deemed to be incorporated by reference herein or therein shall
be deemed to be modified or superseded for purposes of the Registration
Statement, this Prospectus to the extent that a statement contained herein, in
any supplement hereto or in any subsequently filed document which also is or is
deemed to be incorporated by reference herein or therein 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 the
Registration Statement, this Prospectus or any supplement hereto.

THIS PROSPECTUS INCORPORATES CERTAIN DOCUMENTS BY REFERENCE WHICH ARE NOT
PRESENTED HEREIN OR DELIVERED HEREWITH. A COPY OF SUCH DOCUMENTS IS AVAILABLE
WITHOUT CHARGE (OTHER THAN CERTAIN EXHIBITS TO SUCH DOCUMENTS) TO EACH PERSON TO
WHOM THIS PROSPECTUS IS DELIVERED, UPON WRITTEN OR ORAL REQUEST TO: FIRST UNION
CORPORATION, INVESTOR RELATIONS, ONE FIRST UNION CENTER, CHARLOTTE, NORTH
CAROLINA 28288-0206 (TELEPHONE NUMBER: (704) 374-6782).

<PAGE>
PROSPECTUS SUMMARY

THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED
INFORMATION APPEARING ELSEWHERE IN THIS PROSPECTUS AND IN THE DOCUMENTS
INCORPORATED BY REFERENCE IN THIS PROSPECTUS. UNLESS OTHERWISE INDICATED,
REFERENCES IN THIS PROSPECTUS TO THE "CORPORATION" AND "SELLING STOCKHOLDER"
REFER TO SUCH ORGANIZATIONS RESPECTIVELY, AND UNLESS THE CONTEXT OTHERWISE
REQUIRES, TO THEIR RESPECTIVE CONSOLIDATED SUBSIDIARIES.

THE CORPORATION

First Union Corporation (the "Corporation") is a North Carolina-based,
multi-bank holding company subject to the Bank Holding Company Act of 1956, as
amended, and the rules and regulations promulgated thereunder (the "BHCA").
Through its full-service banking subsidiaries the Corporation provides a wide
range of commercial and retail banking services and trust services in North
Carolina, Florida, South Carolina, Georgia, Tennessee, Virginia, Maryland,
Delaware, Pennsylvania, New Jersey, New York, Connecticut and Washington, D.C.
The Corporation also provides various other financial services, including
mortgage banking, home equity lending, credit cards, leasing, investment
banking, insurance and securities brokerage services, through other
subsidiaries. As of June 30, 1997, and for the six months then ended, the
Corporation reported assets of $142.9 billion, net loans of $96.4 billion,
deposits of $92.9 billion, stockholders' equity of $10.0 billion and net income
applicable to common stockholders of $956 million, and as of such date the
Corporation operated in 38 states, Washington, D.C. and six foreign countries.
The Corporation is the sixth largest bank holding company in the United States,
based on assets at June 30, 1997. The principal executive offices of the
Corporation are located at One First Union Center, Charlotte, North Carolina
28288-0013, and its telephone number is (704) 374-6565. See "The Corporation".

SELLING STOCKHOLDER

FFB Participacoes e Servicos, Sociedade Unipessoal, S.A. (the "Selling
Stockholder") is a company organized under the laws of Portugal. The Selling
Stockholder acquired the Shares of Common Stock offered by it hereunder upon the
Corporation's acquisition of FFB (as hereinafter defined) on January 1, 1996.
See "Selling Stockholder".

THE OFFERING

The offering hereby of 41,775,075 Shares of Common Stock, par value
$3.33 1/3 per share, of the Corporation (the "Common Stock") in the United
States and Canada (the "U.S. Offering") and the concurrent offering of
10,443,769 Shares of Common Stock outside of the United States and Canada (the
"International Offering") are collectively referred to as the "Offering." The
closing of each of the U.S. Offering and the International Offering is
conditioned upon the closing of the other.

<TABLE>
<S> <C>
Common Stock offered by the Corporation:
U.S. Offering....................................... 6,000,000 shares
International Offering.............................. 1,500,000 shares
Total....................................... 7,500,000 shares
Common Stock offered by the Selling Stockholder:
U.S. Offering....................................... 35,775,075 shares
International Offering.............................. 8,943,769 shares
Total....................................... 44,718,844 shares
Total Offering........................................ 52,218,844 shares
Common Stock outstanding after the Offering........... 567,969,397 shares(1)
Use of proceeds....................................... The Corporation will not receive any proceeds from the sale of the
Shares of Common Stock owned by the Selling Stockholder. The net
proceeds to the Corporation from the sale of Shares being sold by it
in the Offering will be used for general corporate purposes. See "Use
of Proceeds".
NYSE symbol........................................... FTU
</TABLE>

(1) Based upon the number of shares of Common Stock outstanding as of
August 31, 1997, plus the number of Shares of Common Stock offered by
the Corporation in the Offering.

<PAGE>
THE CORPORATION

GENERAL

Financial and other information relating to the Corporation, including
information relating to the Corporation's directors and executive officers, is
set forth in the Corporation's 1996 Annual Report on Form 10-K, 1997 Annual
Meeting Proxy Statement, 1997 Quarterly Reports on Form 10-Q, 1997 Current
Reports on Form 8-K, and such other documents filed by the Corporation under the
Exchange Act subsequent to the date hereof as specified under "Incorporation of
Certain Documents by Reference", copies of which may be obtained from the
Corporation as indicated under "Available Information".

HISTORY AND BUSINESS

The Corporation was incorporated under the laws of North Carolina in 1967
and is registered as a bank holding company under the BHCA. Pursuant to a
corporate reorganization in 1968, First Union National Bank, based in Charlotte,
North Carolina ("FUNB-NC"), and First Union Mortgage Corporation, a mortgage
banking firm acquired by FUNB-NC in 1964, became subsidiaries of the
Corporation.

In addition to North Carolina, the Corporation's full-service banking
subsidiaries also operate in Connecticut, Delaware, Florida, Georgia, Maryland,
New Jersey, New York, Pennsylvania, South Carolina, Tennessee, Virginia and
Washington, D.C. In addition to providing a wide range of commercial and retail
banking and trust services through its full-service banking subsidiaries, the
Corporation also provides various other financial services, including mortgage
banking, home equity lending, credit cards, leasing, investment banking,
insurance and securities brokerage services through other subsidiaries.

Since the 1985 Supreme Court decision upholding regional interstate banking
legislation, the Corporation has concentrated its efforts on building a large,
regional banking organization in what it perceives to be some of the better
banking markets in the eastern region of the United States. Since November 1985,
the Corporation has completed 72 banking-related acquisitions and has pending
three acquisitions, including the more significant acquisitions (I.E.,
acquisitions involving the acquisition of $3.0 billion or more in assets or
deposits) set forth in the following table.

<TABLE>
<CAPTION>
CONSIDERATION/
ASSETS/ ACCOUNTING
NAME HEADQUARTERS DEPOSITS (1)(2) TREATMENT COMPLETION DATE
<S> <C> <C> <C> <C>
Atlantic Bancorporation..................... Florida $ 3.8 billion common stock/pooling November 1985
Northwestern Financial Corporation.......... North Carolina 3.0 billion common stock/pooling December 1985
First Railroad & Banking Company of
Georgia................................... Georgia 3.7 billion common stock/pooling November 1986
Florida National Banks of Florida, Inc...... Florida 7.9 billion cash and preferred
stock/purchase January 1990
Southeast Banking Corporation subsidiary
banks ("Southeast")....................... Florida 9.9 billion cash, notes and preferred
stock/purchase September 1991
Resolution Trust Corporation ("RTC")
acquisitions.............................. Florida,
Georgia,
Virginia 5.3 billion cash/purchase 1991-1994
Dominion Bankshares Corporation............. Virginia 8.9 billion common and preferred
stock/pooling March 1993
Georgia Federal Bank, FSB................... Georgia 4.0 billion cash/purchase June 1993
First American Metro Corp................... Virginia 4.6 billion cash/purchase June 1993
American Savings of Florida, F.S.B.......... Florida 3.6 billion common stock/purchase July 1995
First Fidelity Bancorporation ("FFB")....... New Jersey 35.3 billion common and preferred
stock/pooling January 1996
Center Financial Corporation................ Connecticut 4.0 billion common stock/purchase November 1996
Signet Banking Corporation ("Signet")....... Virginia $ 11.9 billion common stock/pooling pending
</TABLE>

(1) The dollar amounts indicated represent the assets of the related
organization as of the last reporting period prior to acquisition, except
for (i) the dollar amount relating to RTC acquisitions, which represents
savings and loan deposits acquired from the RTC, and (ii) the dollar amount
relating to Southeast, which represents assets of the two banking
subsidiaries of Southeast Banking Corporation acquired from the Federal
Deposit Insurance Corporation ("FDIC").

<PAGE>
(2) In addition, the Corporation acquired (i) Lieber & Company, a mutual fund
advisory company with approximately $3.4 billion in assets under management,
in June 1994, and (ii) Keystone Investments, Inc., a mutual fund advisory
company with approximately $11.6 billion in assets under management, in
December 1996. The consideration paid by the Corporation in each acquisition
was Common Stock. The Lieber & Company acquisition was accounted for as a
pooling of interests, and the Keystone Investments, Inc. acquisition was
accounted for as a purchase.

The Corporation is continually evaluating acquisition opportunities and
frequently conducts due diligence activities in connection with possible
acquisitions. As a result, acquisition discussions and, in some cases,
negotiations frequently take place and future acquisitions involving cash, debt
or equity securities can be expected. Acquisitions typically involve the payment
of a premium over book and market values, and therefore, some dilution of the
Corporation's book value and net income per common share may occur in connection
with future transactions.

RECENT DEVELOPMENTS

SIGNET BANKING CORPORATION

On July 21, 1997, the Corporation entered into an agreement to acquire
Signet. As of and for the six months ended June 30, 1997, Signet had total
assets of $11.9 billion, net loans of $6.3 billion, deposits of $8.1 billion,
stockholders' equity of $936 million and net income of $31 million, and as of
such date, Signet operated in Virginia, Washington, D.C., and Maryland. The
acquisition agreement provides for the issuance of 1.10 shares of Common Stock
for each share of Signet common stock. As of June 30, 1997, Signet had 60.4
million shares of common stock outstanding. The transaction is subject to Signet
stockholder approval and regulatory approvals and other conditions of closing.
The Corporation is selling shares of Common Stock in the Offering in order for
the Signet acquisition to qualify for pooling of interests accounting treatment.
Additional information with respect to the proposed acquisition of Signet is set
forth in the Corporation's Current Report on Form 8-K dated July 21, 1997. See
"Incorporation of Certain Documents by Reference".

COVENANT BANCORP, INC.

On August 4, 1997, the Corporation entered into an agreement to acquire
Covenant Bancorp. Inc. ("Covenant"), a bank holding company based in
Haddonfield, New Jersey, which had assets of $454 million at June 30, 1997. The
acquisition agreement provides for the issuance of .3813 shares of Common Stock
for each share of Covenant common stock. Two issues of Covenant convertible
preferred stock also would be exchanged for Common Stock. The transaction, which
is subject to Covenant stockholder approval and regulatory approvals and other
conditions of closing, will be accounted for as a purchase. The Corporation
expects to issue approximately 1.7 million shares of Common Stock in the
Covenant acquisition. The Corporation has repurchased 1.65 million shares of
Common Stock in the open market in connection with the Covenant acquisition.

WHEAT FIRST BUTCHER SINGER, INC.

On August 20, 1997, the Corporation entered into an agreement to acquire
Wheat First Butcher Singer, Inc. ("WFBS"). WFBS is the parent corporation of
Wheat, First Securities, Inc., one of the Underwriters. WFBS is engaged in
retail brokerage, investment banking and mutual fund advisory businesses. The
acquisition agreement provides for the issuance of 10,267,029 shares of Common
Stock (as may be adjusted in certain circumstances) in exchange for the
outstanding shares of capital stock of WFBS. The transaction, which is subject
to WFBS stockholder approval and regulatory approvals and other conditions of
closing will be accounted for as a pooling of interests. Additional information
with respect to the proposed acquisition of WFBS is set forth in the
Corporation's Current Report on Form 8-K dated August 20, 1997. See
"Incorporation of Certain Documents by Reference" and "Underwriters".

<PAGE>
USE OF PROCEEDS

The Corporation will not receive any proceeds from the sale of the Shares
of Common Stock offered by the Selling Stockholder in the Offering. The net
proceeds from the sale of the Shares of the Common Stock offered by the
Corporation in the Offering are estimated to be approximately $357.6 million,
after deduction of underwriting discounts and commissions. The Corporation will
use such proceeds for general corporate purposes, which may include the
reduction of indebtedness, investments at the holding company level, investments
in, or extensions of credit to, its banking and other subsidiaries and other
banks and companies engaged in other financial service activities and possible
acquisitions. Pending such use, the net proceeds may be temporarily invested.
The precise amounts and timing of the application of proceeds will depend upon
the funding requirements of the Corporation and its subsidiaries and the
availability of other funds.

Based upon the historical and anticipated future growth of the Corporation
and the financial needs of the Corporation and its subsidiaries, the Corporation
may engage in additional financings of a character and amount to be determined
as the need arises.

DIVIDENDS AND PRICE RANGE OF COMMON STOCK

The Common Stock (including the Shares of Common Stock offered by the
Selling Stockholder) is, and the Shares of Common Stock offered by the
Corporation in the Offering will be, listed on the NYSE and traded on certain
other stock exchanges. The following table sets forth, for the periods
indicated, the high and low reported closing sale prices per share of the Common
Stock on the NYSE Composite Transactions Tape (the "NYSE Composite Tape") and
cash dividends paid per share of Common Stock. The prices and dividends have
been adjusted, where applicable, to reflect the two-for-one Common Stock split
paid on July 31, 1997, to holders of record on July 1, 1997 (the "Stock Split").
<TABLE>
<CAPTION>
MARKET PRICE
CALENDAR PERIOD HIGH LOW
<S> <C> <C>
1995
First Quarter................................................................................. $ 22 1/2 20 5/8
Second Quarter................................................................................ 24 7/8 21 3/8
Third Quarter................................................................................. 25 5/8 22 5/8
Fourth Quarter................................................................................ 29 3/8 24 3/4
1996
First Quarter................................................................................. 31 3/8 25 3/4
Second Quarter................................................................................ 32 1/4 28 3/4
Third Quarter................................................................................. 33 7/8 30 1/2
Fourth Quarter................................................................................ 38 1/2 33 1/2
1997
First Quarter................................................................................. 47 3/4 36 5/8
Second Quarter................................................................................ 47 7/8 39 1/8
Third Quarter (through September 18, 1997).................................................... $ 50 11/16 45 7/8

CALENDAR PERIOD DIVIDENDS
<S> <C>
1995
First Quarter................................................................................. .23
Second Quarter................................................................................ .23
Third Quarter................................................................................. .26
Fourth Quarter................................................................................ .26
1996
First Quarter................................................................................. .26
Second Quarter................................................................................ .26
Third Quarter................................................................................. .29
Fourth Quarter................................................................................ .29
1997
First Quarter................................................................................. .29
Second Quarter................................................................................ .29
Third Quarter (through September 18, 1997).................................................... .32(1)
</TABLE>

(1) The third quarter dividend was paid on September 15, 1997, to stockholders
of record as of the close of business on August 29, 1997.

On September 18, 1997, the reported last sales price of the Common Stock on
the NYSE Composite Tape was $48.375 per share. Prospective purchasers of Shares
are urged to obtain current quotations for the market price of the Common Stock.

The timing and amount of future dividends will depend upon the earnings,
cash requirements and financial condition of the Corporation and its
subsidiaries, applicable government regulations and other factors. As described
under "Certain Regulatory Considerations -- Payment of Dividends", federal law
limits the ability of the Corporation's subsidiary national banks to pay
dividends to the Corporation.

<PAGE>
CAPITALIZATION

The following table sets forth the consolidated capitalization of the
Corporation and its subsidiaries as of June 30, 1997, and as adjusted to give
effect to (i) the Stock Split and (ii) the issuance and sale of the Shares of
Common Stock offered by the Corporation in the Offering. The following data
should be read in conjunction with the consolidated financial statements and
notes thereto of the Corporation and its subsidiaries incorporated herein by
reference. See "Incorporation of Certain Documents by Reference". Also shown
below are certain consolidated regulatory capital ratios of the Corporation and
its subsidiaries at June 30, 1997. For an additional discussion of regulatory
capital requirements applicable to the Corporation, see "Certain Regulatory
Considerations -- Capital Adequacy".

<TABLE>
<CAPTION>
JUNE 30, 1997
(DOLLARS IN MILLIONS) HISTORICAL AS ADJUSTED

<S> <C> <C>
LONG-TERM DEBT....................................................................................... $ 7,258 7,258
GUARANTEED PREFERRED BENEFICIAL INTERESTS IN CORPORATION'S JUNIOR SUBORDINATED DEFERRABLE INTEREST
DEBENTURES......................................................................................... 990 990
STOCKHOLDERS' EQUITY (1)
Preferred stock....................................................................................
Preferred stock, no-par value per share, authorized 10,000,000 shares, none issued.............. -- --
Class A, no-par value per share, authorized 40,000,000 shares, none issued...................... -- --
Common stock, $3.33 1/3 par value; authorized 750,000,000 shares, outstanding 560,977,408 shares... 1,870 1,895(2)
Paid-in capital.................................................................................... 715 1,056(2)
Retained earnings.................................................................................. 7,355 7,355
Unrealized gain on debt and equity securities...................................................... 40 40
Total stockholders' equity.................................................................... 9,980 10,346
Total capitalization.......................................................................... $ 18,228 18,594
</TABLE>

<TABLE>
<CAPTION>
THE
CORPORATION REGULATORY
HISTORICAL MINIMUM
<S> <C> <C>
CONSOLIDATED REGULATORY CAPITAL RATIOS (as of June 30, 1997)
Tier 1 capital to risk-adjusted assets (3)........................................................ 7.55% 4.00
Total capital to risk-adjusted assets (4)......................................................... 12.64 8.00
Leverage (5)...................................................................................... 6.23% 3.00(6)
</TABLE>

(1) See "Description of Common Stock".

(2) Adjusted to reflect the sale of the Common Stock offered by the Corporation
in the Offering, at the September 8, 1997, closing sale price on the NYSE
Composite Tape ($48.75), without reduction for underwriters' discounts and
any other expenses, if any. See "Underwriters".

(3) Tier 1 capital consists of common equity, retained earnings and a limited
amount of qualifying perpetual preferred stock less certain intangibles.

(4) Total capital consists of tier 1 capital and subordinated debt, qualifying
preferred stock and a limited amount of the loan loss allowance. At least
half of a bank holding company's total capital is to be composed of tier 1
capital.

(5) The leverage ratio is defined as the ratio of tier 1 capital divided by
adjusted average quarterly assets.

(6) Federal Reserve Board (as hereinafter defined) guidelines provide for a
minimum leverage ratio of three percent for bank holding companies that meet
certain specified criteria, including that they have the highest regulatory
rating. All other bank holding companies will be required to maintain a
leverage ratio of three percent plus an additional amount of at least 100 to
200 basis points. The guidelines also provide that banking organizations
experiencing internal growth or making acquisitions will be expected to
maintain strong capital positions substantially above the minimum
supervisory levels, without significant reliance on intangible assets.

<PAGE>
SELECTED FINANCIAL DATA

The following sets forth certain unaudited historical consolidated selected
financial information for the Corporation. The Corporation's net income
applicable to common stockholders amounts as of and for the year ended December
31, 1996, include (i) $181 million, or $.32 per share of Common Stock, in
after-tax FFB merger-related restructuring charges, and (ii) $86 million, or
$.16 per share of Common Stock, in after-tax charges relating to the
recapitalization of the Savings Association Insurance Fund ("SAIF"). See "The
Corporation -- History and Business" and "Certain Regulatory Considerations".
This information should be read in conjunction with the historical financial
statements of the Corporation, including the notes thereto, and the other
documents incorporated herein by reference. See "Available Information" and
"Incorporation of Certain Documents by Reference". Interim unaudited historical
data of the Corporation reflects, in the opinion of management, all adjustments
(consisting only of normal recurring adjustments) necessary to a fair
presentation of such data.

<PAGE>
THE CORPORATION (HISTORICAL)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, YEARS ENDED DECEMBER 31,
(IN MILLIONS, EXCEPT PER SHARE DATA) 1997 1996 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C> <C>
CONSOLIDATED SUMMARIES OF INCOME
Interest income.......................................... $ 4,977 4,770 9,628 8,687 7,231 6,602
Interest expense........................................ 2,350 2,294 4,632 4,052 2,793 2,482
Net interest income..................................... 2,627 2,476 4,996 4,635 4,438 4,120
Provision for loan losses............................... 310 150 375 220 179 370
Net interest income after provision for loan losses..... 2,317 2,326 4,621 4,415 4,259 3,750
Securities available for sale transactions.............. 9 18 31 44 6 33
Investment security transactions........................ 1 3 4 5 4 7
Noninterest income...................................... 1,498 1,051 2,322 1,848 1,566 1,542
Merger-related restructuring charges.................... -- 281 281 -- -- --
SAIF special assessment................................. -- -- 133 -- -- --
Noninterest expense..................................... 2,351 2,063 4,254 4,093 3,747 3,536
Income before income taxes.............................. 1,474 1,054 2,310 2,219 2,088 1,796
Income taxes............................................ 518 372 811 789 712 579
Net income.............................................. 956 682 1,499 1,430 1,376 1,217
Dividends on preferred stock............................ -- 7 9 26 46 46
Net income applicable to common stockholders before
redemption premium.................................... 956 675 1,490 1,404 1,330 1,171
Redemption premium on preferred stock................... -- -- -- -- 41 --
Net income applicable to common stockholders after
redemption premium.................................... $ 956 675 1,490 1,404 1,289 1,171
PER COMMON SHARE DATA (a)
Net income before redemption premium.................... $ 1.70 1.20 2.67 2.52 2.36 2.15
Net income after redemption premium..................... 1.70 1.20 2.67 2.52 2.29 2.15
Cash dividends.......................................... 0.58 0.52 1.10 0.98 0.86 0.75
Book value.............................................. 17.79 16.23 17.41 15.94 14.10 13.36
CASH DIVIDENDS PAID ON COMMON STOCK....................... 329 291 611 336 298 244
CONSOLIDATED PERIOD-END BALANCE SHEET ITEMS
Assets.................................................. 142,942 139,886 140,127 131,880 113,529 104,550
Loans, net of unearned income........................... 96,411 91,339 95,858 90,563 77,831 68,263
Deposits................................................ 92,934 91,453 94,815 92,555 87,865 81,885
Long-term debt.......................................... 7,258 7,807 7,660 7,121 4,242 3,675
Guaranteed preferred beneficial interests............... 990 -- 495 -- -- --
Preferred stockholders' equity.......................... -- 163 -- 183 230 262
Common stockholders' equity............................. 9,980 9,153 10,008 8,860 8,044 7,432
Total stockholders' equity.............................. $ 9,980 9,316 10,008 9,043 8,274 7,946
Preferred shares outstanding (IN THOUSANDS)............. -- 2,599 -- 3,388 5,213 11,560
Common shares outstanding (IN THOUSANDS)................ 560,977 563,895 574,697 555,692 570,721 556,408
CONSOLIDATED AVERAGE BALANCE SHEET ITEMS
Assets.................................................. $137,390 133,597 134,127 118,142 106,413 99,610
Loans, net of unearned income........................... 94,959 89,546 90,660 83,265 70,726 62,996
Deposits................................................ 92,837 91,367 91,320 87,274 80,760 76,830
Long-term debt.......................................... 7,482 7,429 7,565 5,707 4,009 3,598
Guaranteed preferred beneficial interests............... 951 -- 47 -- -- --
Common stockholders' equity (b)......................... 9,767 9,049 9,079 8,412 7,870 6,782
Total stockholders' equity (b).......................... $ 9,767 9,221 9,187 8,623 8,372 7,302
Common shares outstanding (IN THOUSANDS)................ 563,003 562,950 557,624 557,354 563,325 544,876
CONSOLIDATED PERCENTAGES
Net income applicable to common stockholders before
redemption premium to average common stockholders'
equity (b)............................................. 19.74%(c) 14.99(c) 16.41 16.69 16.91 17.26
Net income applicable to common stockholders after
redemption premium to average common stockholders'
equity (b)............................................ 19.74(c) 14.99(c) 16.41 16.69 16.38 17.26
Net income to
Average total stockholders' equity (b)................ 19.74(c) 14.88(c) 16.32 16.59 16.44 16.66
Average assets........................................ 1.40(c) 1.03(c) 1.12 1.21 1.29 1.22
Average stockholders' equity to average assets (d)...... 7.06 6.90 6.82 7.23 7.52 7.11
Allowance for loan losses to
Net loans............................................. 1.42 1.55 1.42 1.66 2.03 2.38
Nonaccrual and restructured loans..................... 223 195 204 233 248 151
Nonperforming assets.................................. 194 169 179 182 178 115
Net charge-offs to average net loans.................... 0.64(c) 0.56(c) 0.63 0.41 0.40 0.78
Nonperforming assets to loans, net and foreclosed
properties............................................ 0.73 0.91 0.80 0.91 1.14 2.06
Capital ratios (d)
Tier 1 capital........................................ 7.55 7.11 7.33 6.70 7.76 9.14
Total capital......................................... 12.64 11.94 12.33 11.45 12.94 14.64
Leverage.............................................. 6.23 5.60 6.13 5.49 6.12 6.13
Net interest margin..................................... 4.36%(c) 4.18(c) 4.21 4.46 4.75 4.82

(IN MILLIONS, EXCEPT PER SHARE DATA) 1992
<S> <C>
CONSOLIDATED SUMMARIES OF INCOME
Interest income.......................................... 6,609
Interest expense........................................ 2,942
Net interest income..................................... 3,667
Provision for loan losses............................... 643
Net interest income after provision for loan losses..... 3,024
Securities available for sale transactions.............. 39
Investment security transactions........................ (3)
Noninterest income...................................... 1,360
Merger-related restructuring charges.................... --
SAIF special assessment................................. --
Noninterest expense..................................... 3,443
Income before income taxes.............................. 977
Income taxes............................................ 278
Net income.............................................. 699
Dividends on preferred stock............................ 53
Net income applicable to common stockholders before
redemption premium.................................... 646
Redemption premium on preferred stock................... --
Net income applicable to common stockholders after
redemption premium.................................... 646
PER COMMON SHARE DATA (a)
Net income before redemption premium.................... 1.26
Net income after redemption premium..................... 1.26
Cash dividends.......................................... 0.64
Book value.............................................. 11.68
CASH DIVIDENDS PAID ON COMMON STOCK....................... 168
CONSOLIDATED PERIOD-END BALANCE SHEET ITEMS
Assets.................................................. 95,308
Loans, net of unearned income........................... 60,301
Deposits................................................ 76,156
Long-term debt.......................................... 3,733
Guaranteed preferred beneficial interests............... --
Preferred stockholders' equity.......................... 277
Common stockholders' equity............................. 6,187
Total stockholders' equity.............................. 6,717
Preferred shares outstanding (IN THOUSANDS)............. 12,158
Common shares outstanding (IN THOUSANDS)................ 529,790
CONSOLIDATED AVERAGE BALANCE SHEET ITEMS
Assets.................................................. 90,621
Loans, net of unearned income........................... 58,700
Deposits................................................ 71,947
Long-term debt.......................................... 3,528
Guaranteed preferred beneficial interests............... --
Common stockholders' equity (b)......................... 5,724
Total stockholders' equity (b).......................... 6,280
Common shares outstanding (IN THOUSANDS)................ 510,768
CONSOLIDATED PERCENTAGES
Net income applicable to common stockholders before
redemption premium to average common stockholders'
equity (b)............................................. 11.28
Net income applicable to common stockholders after
redemption premium to average common stockholders'
equity (b)............................................ 11.28
Net income to
Average total stockholders' equity (b)................ 11.13
Average assets........................................ 0.77
Average stockholders' equity to average assets (d)...... 6.89
Allowance for loan losses to
Net loans............................................. 2.57
Nonaccrual and restructured loans..................... 105
Nonperforming assets.................................. 76
Net charge-offs to average net loans.................... 1.03
Nonperforming assets to loans, net and foreclosed
properties............................................ 3.36
Capital ratios (d)
Tier 1 capital........................................ 9.22
Total capital......................................... 14.31
Leverage.............................................. 6.55
Net interest margin..................................... 4.73
</TABLE>

(a) Per common share data has been restated to reflect the Stock Split.

(b) Average common stockholders' equity and total stockholders' equity exclude
net unrealized gains and (losses) on debt and equity securities in 1994
through 1997.

(d) The average stockholders' equity to average assets ratios and all capital
ratios for 1992-1994 are not restated for pooling of interests acquisitions.
Risk-based capital ratio guidelines require a minimum ratio of tier 1
capital to risk-weighted assets of four percent and total capital to
risk-weighted assets of eight percent. The minimum leverage ratio of tier 1
capital to adjusted average quarterly assets is from three to five percent.

<PAGE>
CERTAIN REGULATORY CONSIDERATIONS

AS A BANK HOLDING COMPANY, THE CORPORATION IS SUBJECT TO REGULATION UNDER
THE BHCA AND TO ITS EXAMINATION AND REPORTING REQUIREMENTS. THE FOLLOWING
DISCUSSION SETS FORTH CERTAIN OF THE MATERIAL ELEMENTS OF THE REGULATORY
FRAMEWORK APPLICABLE TO BANK HOLDING COMPANIES AND THEIR SUBSIDIARIES AND
PROVIDES CERTAIN SPECIFIC INFORMATION RELEVANT TO THE CORPORATION. THIS
REGULATORY FRAMEWORK IS INTENDED PRIMARILY FOR THE PROTECTION OF DEPOSITORS AND
THE FEDERAL DEPOSIT INSURANCE FUNDS AND NOT FOR THE PROTECTION OF SECURITY
HOLDERS. TO THE EXTENT THAT THE FOLLOWING INFORMATION DESCRIBES STATUTORY AND
REGULATORY PROVISIONS, IT IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE
PARTICULAR STATUTORY AND REGULATORY PROVISIONS. A CHANGE IN APPLICABLE STATUTES,
REGULATIONS OR REGULATORY POLICY MAY HAVE A MATERIAL EFFECT ON THE BUSINESS OF
THE CORPORATION.

GENERAL

As a bank holding company, the Corporation is subject to regulation under
the BHCA and to its examination and reporting requirements. Under the BHCA, bank
holding companies may not directly or indirectly acquire the ownership or
control of more than five percent of the voting shares or substantially all of
the assets of any company, including a bank, without the prior approval of, or a
waiver of the requirement for such approval by, the Board of Governors of the
Federal Reserve System (the "Federal Reserve Board"). In addition, bank holding
companies are generally prohibited under the BHCA from engaging in nonbanking
activities, subject to certain exceptions.

The earnings of the Corporation are affected by the legislative and
governmental actions of various regulatory authorities, including the Federal
Reserve Board, the Comptroller of the Currency (the "OCC") and the FDIC. In
addition, there are numerous governmental requirements and regulations which
affect the activities of the Corporation.

PAYMENT OF DIVIDENDS

The Corporation is a legal entity separate and distinct from its banking
and other subsidiaries. A major portion of the Corporation's revenues result
from amounts paid as dividends to the Corporation by its national bank
subsidiaries. The prior approval of the OCC is required for the payment of any
dividend by a national bank if the total of all dividends declared by the board
of directors of such bank in any calendar year will exceed the sum of such
bank's net profits for that year and its retained net profits for the preceding
two calendar years, less any required transfers to surplus. Federal law also
prohibits any national bank from paying dividends which would be greater than
such bank's undivided profits after deducting statutory bad debt in excess of
such bank's allowance for loan losses.

In addition to its national bank subsidiaries, the Corporation has one
state-chartered bank subsidiary which is subject to dividend limitations under
applicable state laws.

Under the foregoing dividend restrictions and certain restrictions
applicable to certain of the Corporation's nonbanking subsidiaries, as of June
30, 1997, the Corporation's subsidiaries, without obtaining affirmative
governmental approvals, could pay aggregate dividends of $717 million to the
Corporation. In the first six months of 1997, the Corporation's subsidiaries
paid $603 million in cash dividends to the Corporation. In addition, a corporate
reorganization of the Corporation's subsidiary banks in Georgia and Florida into
FUNB-NC on June 5, 1997, resulted in a reduction of capital in the amount of
$400 million, which was paid to the Corporation.

In addition, the Corporation and its bank subsidiaries are subject to
various general regulatory policies and requirements relating to the payment of
dividends, including requirements to maintain adequate capital above regulatory
minimums. The appropriate federal regulatory authority is authorized to
determine, under certain circumstances relating to the financial condition of a
national bank or bank holding company, that the payment of dividends would be an
unsafe or unsound practice and to prohibit payment thereof. The OCC (the
appropriate agency with respect to the Corporation's national bank subsidiaries)
and the FDIC (the appropriate agency with respect to the Corporation's
state-chartered bank subsidiary) have indicated that paying dividends that
deplete a bank's capital base to an inadequate level would be an unsound and
unsafe banking practice. The OCC, the FDIC and the Federal Reserve Board have
each indicated that banking organizations should generally pay dividends only
out of current operating earnings.

BORROWINGS

There are also various legal restrictions on the extent to which each of
the Corporation and certain of its nonbank subsidiaries can borrow or otherwise
obtain credit from its bank subsidiaries. In general, these restrictions require
that any such extensions of credit must be secured by designated amounts of
specified collateral and are limited, as to any one of the

<PAGE>
Corporation or such nonbank subsidiaries, to ten percent of the lending bank's
capital stock and surplus, and as to the Corporation and all such nonbank
subsidiaries in the aggregate, to 20 percent of such lending bank's capital
stock and surplus.

The Federal Deposit Insurance Act, as amended (the "FDIA") imposes
liability on an institution the deposits of which are insured by the FDIC, such
as the Corporation's subsidiary banks, for certain potential losses of the FDIC
incurred in connection with other FDIC-insured institutions under common control
with such institution.

Under the National Bank Act, if the capital stock of a national bank is
impaired by losses or otherwise, the OCC is authorized to require payment of the
deficiency by assessment upon the bank's stockholders, pro rata and, to the
extent necessary, if any such assessment is not paid by any stockholder after
three months notice, to sell the stock of such stockholder to make good the
deficiency.

Under Federal Reserve Board policy, the Corporation is expected to act as a
source of financial strength to each of its subsidiary banks and to commit
resources to support each of such subsidiaries. This support may be required at
times when, absent such Federal Reserve Board policy, the Corporation may not
find itself willing or able to provide it.

Any capital loans by a bank holding company to any of its subsidiary banks
are subordinate in right of payment to deposits and to certain other
indebtedness of such subsidiary banks. In the event of a bank holding company's
bankruptcy, any commitment by the bank holding company to a federal bank
regulatory agency to maintain the capital of a subsidiary bank will be assumed
by the bankruptcy trustee and entitled to a priority of payment.

CAPITAL ADEQUACY

The Federal Reserve Board, the FDIC and the OCC have adopted substantially
similar risk-based and leverage capital guidelines for United States banking
organizations. Under these risked-based capital standards, the minimum
consolidated ratio of total capital to risk-weighted assets (including certain
off-balance sheet activities, such as standby letters of credit) is eight
percent. At least half of the total capital is to be composed of common
stockholder's equity, retained earnings, a limited amount of qualifying
perpetual preferred stock and minority interests in the equity accounts of
consolidated subsidiaries, less goodwill and certain intangibles ("tier 1
capital" and, together with tier 2 capital, "total capital"). The remainder of
total capital may consist of mandatory convertible debt securities and a limited
amount of subordinated debt, qualifying preferred stock and loan loss allowance
("tier 2 capital"). At June 30, 1997, the Corporation's tier 1 and total capital
ratios were 7.55 percent and 12.64 percent, respectively. See "Capitalization".

In addition, the Federal Reserve Board has established minimum leverage
ratio guidelines for bank holding companies. These guidelines provide for a
minimum leverage ratio of tier 1 capital to adjusted average quarterly assets
less certain amounts ("leverage ratio") equal to three percent for bank holding
companies that meet certain specified criteria, including having the highest
regulatory rating. All other bank holding companies will generally be required
to maintain a leverage ratio of from at least four to five percent. The
Corporation's leverage ratio at June 30, 1997, was 6.23 percent. See
"Capitalization". The guidelines also provide that bank holding companies
experiencing internal growth or making acquisitions will be expected to maintain
strong capital positions substantially above the minimum supervisory levels
without significant reliance on intangible assets. Furthermore, the guidelines
indicate that the Federal Reserve Board will continue to consider a "tangible
tier 1 leverage ratio" (deducting all intangibles) in evaluating proposals for
expansion or new activity. The Federal Reserve Board has not advised the
Corporation of any specific minimum leverage ratio or tangible tier 1 leverage
ratio applicable to it.

Each of the Corporation's subsidiary banks is subject to similar capital
requirements adopted by the OCC or the FDIC. Each of the Corporation's
subsidiary banks had a leverage ratio in excess of 5.47 percent as of June 30,
1997. The federal banking agencies have not advised any of the subsidiary banks
of any specific minimum leverage ratio applicable to it.

PROMPT CORRECTIVE ACTION

The FDIA, among other things, requires the federal banking agencies to take
"prompt corrective action" in respect of depository institutions that do not
meet minimum capital requirements. The FDIA establishes five capital tiers:
"well capitalized"; "adequately capitalized"; "undercapitalized"; "significantly
undercapitalized"; and "critically undercapitalized". A depository institution's
capital tier will depend upon how its capital levels compare to various relevant
capital measures and certain other factors, as established by regulation.

The federal bank regulatory agencies have adopted regulations establishing
relevant capital measures and relevant capital levels applicable to FDIC-insured
banks. The relevant capital measures are the total capital ratio, tier 1 capital
ratio and

<PAGE>
the leverage ratio. Under the regulations, a FDIC-insured bank will be (i) "well
capitalized" if it has a total capital ratio of ten percent or greater, a tier 1
capital ratio of six percent or greater and a leverage ratio of five percent or
greater and is not subject to any order or written directive by the OCC to meet
and maintain a specific capital level for any capital measure; (ii) "adequately
capitalized" if it has a total capital ratio of eight percent or greater, a tier
1 capital ratio of four percent or greater and a leverage ratio of four percent
or greater (three percent in certain circumstances) and is not "well
capitalized"; (iii) "undercapitalized" if it has a total capital ratio of less
than eight percent, a tier 1 capital ratio of less than four percent or a
leverage ratio of less than four percent (three percent in certain
circumstances); (iv) "significantly undercapitalized" if it has a total capital
ratio of less than six percent, a tier 1 capital ratio of less than three
percent or a leverage ratio of less than three percent; and (v) "critically
undercapitalized" if its tangible equity is equal to or less than two percent of
average quarterly tangible assets. An institution may be downgraded to, or
deemed to be in, a capital category that is lower than is indicated by its
capital ratios if it is determined to be in an unsafe or unsound condition or if
it receives an unsatisfactory examination rating with respect to certain
matters. As of June 30, 1997, all of the Corporation's deposit-taking subsidiary
banks had capital levels that qualify them as being "well capitalized" under
such regulations.

The FDIA generally prohibits a FDIC-insured depository institution from
making any capital distribution (including payment of a dividend) or paying any
management fee to its holding company if the depository institution would
thereafter be "undercapitalized". "Undercapitalized" depository institutions are
subject to growth limitations and are required to submit a capital restoration
plan. The federal banking agencies may not accept a capital plan without
determining, among other things, that the plan is based on realistic assumptions
and is likely to succeed in restoring the depository institution's capital. In
addition, for a capital restoration plan to be acceptable, the depository
institution's parent holding company must guarantee that the institution will
comply with such capital restoration plan. The aggregate liability of the parent
holding company is limited to the lesser of: (i) an amount equal to five percent
of the depository institution's total assets at the time it became
"undercapitalized"; and (ii) the amount which is necessary (or would have been
necessary) to bring the institution into compliance with all capital standards
applicable with respect to such institution as of the time it fails to comply
with the plan. If a depository institution fails to submit an acceptable plan,
it is treated as if it is "significantly undercapitalized".

"Significantly undercapitalized" insured depository institutions may be
subject to a number of requirements and restrictions, including orders to sell
sufficient voting stock to become "adequately capitalized", requirements to
reduce total assets, and cessation of receipt of deposits from correspondent
banks. "Critically undercapitalized" institutions are subject to the appointment
of a receiver or conservator. A bank that is not "well capitalized" is subject
to certain limitations relating to so-called "brokered" deposits.

DEPOSITOR PREFERENCE STATUTE

Under federal law, deposits and certain claims for administrative expenses
and employee compensation against an insured depository institution would be
afforded a priority over other general unsecured claims against such an
institution, including federal funds and letters of credit, in the "liquidation
or other resolution" of such an institution by any receiver.

INTERSTATE BANKING AND BRANCHING LEGISLATION

The Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994
(the "IBBEA") authorized interstate acquisitions of banks and bank holding
companies without geographic limitation beginning one year after enactment. In
addition, it authorized, beginning June 1, 1997, a bank to merge with a bank in
another state as long as neither of the states has opted out of interstate
branching between the date of enactment of the IBBEA and May 31, 1997. In
addition, a bank may establish and operate a DE NOVO branch in a state in which
the bank does not maintain a branch if that state expressly permits DE NOVO
interstate branching. It was pursuant to authority from IBBEA that FUNB-NC
completed reorganizations in June 1997 (which merged the Corporation's
subsidiary banks in Georgia and Florida into FUNB-NC) and July 1997 (which
merged the Corporation's subsidiary banks in South Carolina, Tennessee,
Virginia, Maryland, Connecticut and Washington, D.C. into FUNB-NC). In addition,
First Union National Bank, based in Avondale, Pennsylvania, which conducts
banking operations in New York, New Jersey and Pennsylvania, is to be merged
with FUNB-NC in February 1998, pending regulatory approval.

FDIC INSURANCE ASSESSMENTS; DIFA

Effective January 1, 1996, the FDIC reduced the insurance premiums it
currently charges on bank deposits insured by the Bank Insurance Fund ("BIF") to
the statutory minimum of $2,000 for "well capitalized" banks. The Deposit
Insurance Funds Act of 1996, which was enacted on September 30, 1996 ("DIFA"),
reduced the amount of semi-annual FDIC insurance premiums for savings
association deposits acquired by banks and insured by SAIF to the same levels
assessed for deposits insured by BIF. DIFA also provided for a special one-time
assessment imposed on deposits insured by SAIF, including such

<PAGE>
deposits held by banks, to bring the SAIF up to statutorily required levels. The
Corporation accrued for the one-time assessment in the third quarter of 1996 in
the amount of $86 million after tax in connection with the SAIF
recapitalization.

DIFA further provides for assessments to be imposed on insured depository
institutions with respect to deposits insured by the BIF, and continues the
assessments currently imposed on depository institutions with respect to
SAIF-insured deposits, to pay for the cost of Financing Corporation funding.

DESCRIPTION OF COMMON STOCK

The following summary of certain provisions of the Corporation's Articles
of Incorporation, as amended (the "Articles"), the Corporation's Bylaws (the
"Bylaws") and the Rights Agreement (as defined below) does not purport to be
complete and is qualified in its entirety by reference to such instruments, each
of which is an exhibit to the Registration Statement of which this Prospectus is
a part.

AUTHORIZED CAPITAL

The authorized capital stock of the Corporation consists of 750,000,000
shares of Common Stock, 10,000,000 shares of Preferred Stock and 40,000,000
shares of Class A Preferred Stock. Each outstanding share of Common Stock
currently has attached to it one right (a "Right") issued pursuant to an Amended
and Restated Shareholder Protection Rights Agreement (the "Rights Agreement").
Each Right entitles its registered holder to purchase one one-hundredth of a
share of a junior participating series of Class A Preferred Stock, as described
under " -- Rights Plan" below.

As of August 31, 1997, there were 560,469,397 shares of Common Stock, no
shares of Preferred Stock and no shares of Class A Preferred Stock issued and
outstanding. The number of shares of Common Stock outstanding on August 31,
1997, reflects the payment on July 31, 1997, of the Stock Split.

GENERAL

Subject to the prior rights of the holders of any Preferred Stock and Class
A Preferred Stock then outstanding, holders of Common Stock are entitled to
receive such dividends as may be declared by the Board of Directors out of funds
legally available therefor and, in the event of liquidation or dissolution, to
receive the net assets of the Corporation remaining after payment of all
liabilities and after payment to holders of all shares of Preferred Stock and
Class A Preferred Stock of the full preferential amounts to which such holders
are respectively entitled, in proportion to their respective holdings.

See "Certain Regulatory Considerations -- Payment of Dividends" for
information relating to certain regulatory restrictions on the payment of
dividends by banks, including the Corporation's subsidiary banks.

Pursuant to an indenture dated as of November 27, 1996, between the
Corporation and Wilmington Trust Company, as trustee, under which certain of the
Corporation's outstanding junior subordinated debt securities have been issued,
the Corporation has covenanted that it generally will not declare or pay any
dividends or distributions on, or redeem, repurchase, acquire or make a
liquidation payment with respect to, any of the Corporation's capital stock,
including the Common Stock, Preferred Stock and Class A Preferred Stock, if, at
such time, certain defaults have occurred under such indenture or a related
guarantee of the Corporation or the Corporation shall have exercised its right
under such indenture to defer interest payments on the securities issued
thereunder.

Subject to the rights of the holders of any Preferred Stock and Class A
Preferred Stock then outstanding, all voting rights are vested in the holders of
the shares of Common Stock, each share being entitled to one vote on all matters
requiring stockholder action and in the election of directors. Holders of Common
Stock have no preemptive, subscription or conversion rights. All of the
outstanding shares of Common Stock are, and any issued and sold hereunder will
be, fully paid and nonassessable.

FUNB-NC is the Transfer Agent, Registrar and Dividend Disbursement Agent
for the Common Stock.

RIGHTS PLAN

Each outstanding share of Common Stock currently has attached to it one
Right issued pursuant to the Rights Agreement. Each Right entitles its
registered holder to purchase one one-hundredth of a share of a junior
participating series of Class A Preferred Stock designed to have economic and
voting terms similar to those of one share of Common Stock, for $105, subject to
adjustment (the "Rights Exercise Price"), but only after the earlier to occur
of: (i) the tenth business day

<PAGE>
(subject to extension) after any person (an "Acquiring Person") (x) commences a
tender or exchange offer, which, if consummated, would result in a person
becoming the beneficial owner of 15 percent or more of the outstanding shares of
Common Stock, or (y) is determined by the Federal Reserve Board to "control" the
Corporation within the meaning of the BHCA (see " -- Other Provisions" below),
subject to certain exceptions; and (ii) the tenth business day after the first
date (the "Flip-in Date") of a public announcement by the Corporation that a
person has become an Acquiring Person (in either case, the "Separation Time").
The Rights will not trade separately from the shares of Common Stock unless and
until the Separation Time occurs.

The Rights Agreement provides that a person will not become an Acquiring
Person under the BHCA control test described above if either (i) the Federal
Reserve Board's control determination would not have been made but for such
person's failure to make certain customary passivity commitments, or such
person's violation of such commitments made, to the Federal Reserve Board, so
long as the Federal Reserve Board determines that such person no longer controls
the Corporation within 30 days (or 60 days in certain circumstances), or (ii)
the Federal Reserve Board's control determination was not based on such a
failure or violation and such person (x) obtains a noncontrol determination
within three years, and (y) is using its best efforts to allow the Corporation
to make any acquisition or engage in any legally permissible activity
notwithstanding such person's being deemed to control the Corporation for
purposes of the BHCA.

The Rights will not be exercisable until the business day following the
Separation Time. The Rights will expire on the earliest of: (i) the Exchange
Time (as defined below); (ii) the close of business on December 28, 2000; and
(iii) the date on which the Rights are redeemed or terminated as described below
(in any such case, the "Expiration Time"). The Rights Exercise Price and the
number of Rights outstanding, or in certain circumstances the securities
purchasable upon exercise of the Rights, are subject to adjustment upon the
occurrence of certain events.

In the event that prior to the Expiration Time a Flip-in Date occurs, the
Corporation will take such action as shall be necessary to ensure and provide
that each Right (other than Rights beneficially owned by an Acquiring Person or
any affiliate, associate or transferee thereof, which Rights shall become void)
shall constitute the right to purchase, from the Corporation, shares of Common
Stock having an aggregate market price equal to twice the Rights Exercise Price
for an amount in cash equal to the then current Rights Exercise Price. In
addition, the Board of Directors of the Corporation may, at its option, at any
time after a Flip-in Date, elect to exchange all of the then outstanding Rights
for shares of Common Stock, at an exchange ratio of two shares of Common Stock
per Right, appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the Separation Time (the "Rights Exchange
Rate"). Immediately upon such action by the Board of Directors (the "Exchange
Time"), the right to exercise the Rights will terminate, and each Right will
thereafter represent only the right to receive a number of shares of Common
Stock equal to the Rights Exchange Rate. If the Corporation becomes obligated to
issue shares of Common Stock upon exercise of or in exchange for Rights, the
Corporation, at its option, may substitute therefor shares of junior
participating Class A Preferred Stock upon exercise of each Right at a rate of
two one-hundredths of a share of junior participating Class A Preferred Stock
upon the exchange of each Right.

The Rights may be canceled and terminated without any payment to holders
thereof at any time prior to the date that they become exercisable, and are
redeemable by the Corporation at $0.01 per Right, subject to adjustment upon the
occurrence of certain events, at any date between the date on which they become
exercisable and the Flip-in Date. The Rights have no voting rights, and they are
not entitled to dividends.

The Rights will not prevent a takeover of the Corporation. The Rights,
however, may cause substantial dilution to a person or group that acquires 15
percent or more of Common Stock unless the Rights are first redeemed or
terminated by the Board of Directors of the Corporation. Nevertheless, the
Rights should not interfere with a transaction that is in the best interests of
the Corporation and its stockholders because the Rights can be redeemed or
terminated, as hereinabove described, before the consummation of such
transaction.

The complete terms of the Rights are set forth in the Rights Agreement. The
Rights Agreement is incorporated by reference as an exhibit to the Registration
Statement of which this Prospectus is a part, and the foregoing description is
qualified in its entirety by reference thereto. A copy of the Rights Agreement
can be obtained upon written request to the Rights Agent, First Union National
Bank, 1525 West W.T. Harris Blvd., Charlotte, North Carolina 28288-1153.

OTHER PROVISIONS

In addition to the Rights Plan, the Articles and Bylaws of the Corporation
contain a number of provisions which may be deemed to have the effect of
discouraging or delaying attempts to gain control of the Corporation, including
provisions in the Articles: (i) classifying the Board of Directors into three
classes with each class to serve for three years, with one class being

<PAGE>
elected annually; (ii) authorizing the Board of Directors to fix the size of the
Board of Directors between nine and 30 directors; (iii) authorizing directors to
fill vacancies on the Board of Directors that occur between annual meetings,
except that vacancies resulting from a removal of a director by a stockholder
vote may only be filled by a stockholder vote; (iv) providing that directors may
be removed only for cause and only by affirmative vote of the majority of shares
entitled to be voted in the election of directors, voting as a single class; (v)
authorizing only the Board of Directors, the Chairman of the Board or the
President to call a special meeting of stockholders (except for special meetings
called under specified circumstances for holders of classes or series of stock
ranking superior to the Common Stock); and (vi) requiring an 80 percent vote of
stockholders entitled to vote in the election of directors, voting as a single
class, to alter any of the foregoing provisions.

The Bylaws include provisions setting forth specific conditions under
which: (i) business may be transacted at an annual meeting of stockholders; and
(ii) persons may be nominated for election as directors of the Corporation at an
annual meeting of stockholders.

The Change in Bank Control Act prohibits a person or group of persons from
acquiring "control" of a bank holding company unless the Federal Reserve Board
has been given 60 days' prior written notice of such proposed acquisition, and
within that time period, the Federal Reserve Board has not issued a notice
disapproving the proposed acquisition or extending for up to another 30 days the
period during which such a disapproval may be issued, or unless the acquisition
is subject to Federal Reserve Board approval under the BHCA. An acquisition may
be made prior to the expiration of the disapproval period if the Federal Reserve
Board issues written notice of its intent not to disapprove the action. Under a
rebuttable presumption established by the Federal Reserve Board, the acquisition
of more than ten percent of a class of voting stock of a bank holding company
with a class of securities registered under Section 12 of the Exchange Act, such
as the Corporation, would, under the circumstances set forth in the presumption,
constitute the acquisition of control.

In addition, any "company" would be required to obtain the approval of the
Federal Reserve Board under the BHCA before acquiring 25 percent (five percent
in the case of an acquiror that is a bank holding company) or more of the
outstanding shares of Common Stock, or otherwise obtaining "control" over the
Corporation. Under the BHCA, "control" generally means (i) the ownership or
control of 25 percent or more of any class of voting securities of the bank
holding company, (ii) the ability to elect a majority of the bank holding
company's directors, or (iii) the ability otherwise to exercise a controlling
influence over the management and policies of the bank holding company.

Two North Carolina "anti-takeover" statutes adopted in 1987, The North
Carolina Shareholder Protection Act and The North Carolina Control Share
Acquisition Act, allowed North Carolina corporations to elect to either be
covered or not be covered by such statutes. The Corporation elected not to be
covered by such statutes.

In addition to the foregoing, in certain instances the issuance of
authorized but unissued shares of Common Stock, Preferred Stock or Class A
Preferred Stock may have an anti-takeover effect.

The existence of the foregoing provisions could result in (i) the
Corporation being less attractive to a potential acquiror, and (ii) the
Corporation's stockholders receiving less for their shares of Common Stock than
otherwise might be available in the event of a take-over attempt.

<PAGE>
SELLING STOCKHOLDER

The following table sets forth certain information as of the date of this
Prospectus with respect to the Selling Stockholder's holdings of Common Stock.
<TABLE>
<CAPTION>
SHARES OF
COMMON
STOCK OWNED
PRIOR TO SHARES TO BE
THE OWNED AFTER
NAME AND ADDRESS OFFERING THE OFFERING
OF SELLING STOCKHOLDER (1) (2) PERCENTAGE (3) (2)
<S> <C> <C> <C>
FFB Participacoes e Servicos, Sociedade
Unipessoal, S.A.
Avenida Arriaga n.30
Funchal Madeira
Portugal 44,718,844 7.98% --

NAME AND ADDRESS
OF SELLING STOCKHOLDER (1) PERCENTAGE
<S> <C>
FFB Participacoes e Servicos, Sociedade
Unipessoal, S.A.
Avenida Arriaga n.30
Funchal Madeira
Portugal -- %
</TABLE>

(1) The Selling Stockholder is a wholly-owned subsidiary of Banco Santander,
S.A. ("Banco Santander"), a bank holding company organized under the laws of
Spain.

(2) Excludes shares of Common Stock owned by Mr. Juan R. Inciarte, an Executive
Vice President and member of the Board of Directors of Banco Santander and a
director of the Corporation. Also, excludes shares of Common Stock owned by
B.F. Dolan, a director of Banco Santander and the Corporation.

(3) Based on shares of Common Stock outstanding on August 31, 1997.

The Selling Stockholder is the beneficial owner as of the date of this
Prospectus of 44,718,844 shares of Common Stock. Such shares were acquired by
the Selling Stockholder in exchange for shares of common stock of FFB, in
connection with the Corporation's acquisition of FFB on January 1, 1996. Mr.
Juan R. Inciarte, an Executive Vice President and member of the Board of
Directors of Banco Santander, is a member of the Board of Directors of the
Corporation. His current term as a director of the Corporation expires in 1999.
Mr. B.F. Dolan, a member of the Board of Directors of the Corporation, is a
member of the Board of Directors of Banco Santander. His current term as a
director of Banco Santander expires in 1998.

<PAGE>
UNDERWRITERS

Under the terms and subject to the conditions contained in an Underwriting
Agreement dated the date hereof (the "Underwriting Agreement"), the U.S.
Underwriters named below for whom Morgan Stanley & Co. Incorporated, Goldman,
Sachs & Co., Santander Investment Securities Inc., UBS Securities LLC and Wheat,
First Securities, Inc., are acting as U.S. Representatives, and the
International Underwriters named below for whom Morgan Stanley & Co.
International Limited, Goldman Sachs International, Banco Santander de Negocios,
S.A., UBS Limited and Wheat, First Securities, Inc., are acting as International
Representatives, have severally agreed to purchase, and the Selling Stockholder
and the Corporation have agreed to sell to them, severally, the respective
number of Shares of Common Stock set forth opposite the names of such
Underwriters below:

<TABLE>
<CAPTION>
NUMBER OF
NAME SHARES
<S> <C>
U.S. Underwriters:
Morgan Stanley & Co. Incorporated............................................................................. 6,035,015
Goldman, Sachs & Co........................................................................................... 6,035,015
Santander Investment Securities Inc........................................................................... 6,035,015
UBS Securities LLC............................................................................................ 6,035,015
Wheat, First Securities, Inc.................................................................................. 6,035,015
Bear, Stearns & Co. Inc....................................................................................... 800,000
Sanford C. Bernstein & Co., Inc............................................................................... 800,000
BT Alex. Brown Incorporated................................................................................... 800,000
Credit Suisse First Boston Corporation........................................................................ 800,000
A.G. Edwards & Sons, Inc...................................................................................... 800,000
Friedman, Billings, Ramsey & Co., Inc......................................................................... 400,000
Interstate/Johnson Lane Corporation........................................................................... 400,000
Edward D. Jones & Co., L.P.................................................................................... 400,000
Legg Mason Wood Walker, Incorporated.......................................................................... 400,000
Lehman Brothers Inc........................................................................................... 800,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated............................................................ 800,000
Montgomery Securities......................................................................................... 800,000
J.P. Morgan Securities Inc.................................................................................... 800,000
Raymond James & Associates, Inc............................................................................... 400,000
The Robinson-Humphrey Company, Inc............................................................................ 400,000
SBC Warburg Dillon Read Inc................................................................................... 800,000
Scott & Stringfellow, Inc..................................................................................... 400,000
Smith Barney Inc.............................................................................................. 800,000
Subtotal...................................................................................................... 41,775,075
International Underwriters:
Morgan Stanley & Co. International Limited.................................................................... 1,878,769
Goldman Sachs International................................................................................... 1,878,750
Banco Santander de Negocios, S.A. ............................................................................ 1,878,750
UBS Limited................................................................................................... 1,878,750
Wheat, First Securities, Inc. ................................................................................ 1,878,750
Barclays de Zoete Wedd Limited................................................................................ 150,000
Commerzbank Aktiengesellschaft................................................................................ 150,000
Credit Commercial de France................................................................................... 150,000
Istituto Bancario San Paolo di Torino S.p.A................................................................... 150,000
Merrill Lynch International................................................................................... 150,000
RBC Dominion Securities Inc................................................................................... 150,000
Societe Generale.............................................................................................. 150,000
Subtotal...................................................................................................... 10,443,769
Total...................................................................................................... 52,218,844
</TABLE>

<PAGE>
The U.S. Underwriters and the International Underwriters, and the U.S.
Representatives and the International Representatives, are collectively referred
to as the "Underwriters" and the "Representatives", respectively. The
Underwriting Agreement provides that the obligations of the several Underwriters
to pay for and accept delivery of the Shares of Common Stock offered hereby are
subject to the approval of certain legal matters by their counsel and to certain
other conditions. The Underwriters are obligated to take and pay for all of the
Shares of Common Stock offered hereby if any such Shares are taken.

Pursuant to the Agreement between U.S. and International Underwriters, each
U.S. Underwriter has represented and agreed that, with certain exceptions, (i)
it is not purchasing any Shares for the account of anyone other than a United
States or Canadian Person (as defined herein), and (ii) it has not offered or
sold, and will not offer or sell, directly or indirectly, any Shares or
distribute any prospectus relating to the Shares outside the United States or
Canada or to anyone other than a United States or Canadian Person. Pursuant to
the Agreement between U.S. and International Underwriters, each International
Underwriter has represented and agreed that, with certain exceptions, (i) it is
not purchasing any Shares for the account of any United States or Canadian
Person, and (ii) it has not offered or sold, and will not offer or sell,
directly or indirectly, any Shares or distribute any prospectus relating to the
Shares in the United States or Canada or to any United States or Canadian
Person. With respect to any Underwriter that is a U.S. Underwriter and an
International Underwriter, the foregoing representations and agreements (i) made
by it in its capacity as a U.S. Underwriter apply only to it in its capacity as
a U.S. Underwriter, and (ii) made by it in its capacity as an International
Underwriter apply only to it in its capacity as an International Underwriter.
The foregoing limitations do not apply to stabilization transactions or to
certain other transactions specified in the Agreement between U.S. and
International Underwriters. As used herein, "United States or Canadian Person"
means any national or resident of the United States or Canada, or any
corporation, pension, profit-sharing or other trust or other entity organized
under the laws of the United States or Canada or of any political subdivision
thereof (other than a branch located outside the United States and Canada of any
United States or Canadian Person), and includes any United States or Canadian
branch of a person who is otherwise not a United States or Canadian Person. All
shares of Common Stock to be purchased by the Underwriters under the
Underwriting Agreement are referred to herein as the "Shares".

Pursuant to the Agreement between U.S. and International Underwriters,
sales may be made between the U.S. Underwriters and International Underwriters
of any number of Shares as may be mutually agreed. The per share price of any
Shares so sold shall be the public offering price set forth on the cover page
hereof, in United States dollars, less an amount not greater than the per share
amount of the concession to dealers set forth below.

Pursuant to the Agreement between U.S. and International Underwriters, each
U.S. Underwriter has represented that it has not offered or sold, and has agreed
not to offer or sell, any Shares, directly or indirectly, in any province or
territory of Canada or to, or for the benefit of, any resident of any province
or territory of Canada in contravention of the securities laws thereof and has
represented that any offer or sale of Shares in Canada will be made only
pursuant to an exemption from the requirement to file a prospectus in the
province or territory of Canada in which such offer or sale is made. Each U.S.
Underwriter has further agreed to send to any dealer who purchases from it any
of the Shares a notice stating in substance that, by purchasing such Shares,
such dealer represents and agrees that it has not offered or sold, and will not
offer or sell, directly or indirectly, any of such Shares in any province or
territory of Canada or to, or for the benefit of, any resident of any province
or territory of Canada in contravention of the securities laws thereof and that
any offer or sale of Shares in Canada will be made only pursuant to an exemption
from the requirement to file a prospectus in the province or territory of Canada
in which such offer or sale is made, and that such dealer will deliver to any
other dealer to whom it sells any of such Shares a notice containing
substantially the same statement as is contained in this sentence.

Pursuant to the Agreement between U.S. and International Underwriters, each
International Underwriter has represented and agreed that (i) it has not offered
or sold and, prior to the date six months after the closing date for the sale of
the Shares to the International Underwriters, will not offer or sell, any Shares
to persons in the United Kingdom except to persons whose ordinary activities
involve them in acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of their businesses or otherwise in
circumstances which have not resulted and will not result in an offer to the
public in the United Kingdom within the meaning of the Public Offers of
Securities Regulations 1995; (ii) it has complied and will comply with all
applicable provisions of the Financial Services Act 1986 with respect to
anything done by it in relation to the Shares in, from or otherwise involving
the United Kingdom; and (iii) it has only issued or passed on and will only
issue or pass on in the United Kingdom any document received by it in connection
with the offering of the Shares to a person who is of a kind described in
Article 11(3) of the Financial Services Act 1986 (Investment
Advertisements)(Exemptions) Order 1996 or is a person to whom such document may
otherwise lawfully be issued or passed on.

<PAGE>
Pursuant to the Agreement between U.S. and International Underwriters, each
International Underwriter has further represented that it has not offered or
sold, and has agreed not to offer or sell, directly or indirectly, in Japan or
to or for the account of any resident thereof, any of the Shares acquired in
connection with the distribution contemplated hereby, except for offers or sales
to Japanese International Underwriters or dealers and except pursuant to any
exemption from the registration requirements of the Securities and Exchange Law
and otherwise in compliance with applicable provisions of Japanese law. Each
International Underwriter has further agreed to send to any dealer who purchases
from it any of the Shares a notice stating in substance that, by purchasing such
Shares, such dealer represents and agrees that it has not offered or sold, and
will not offer or sell, any of such Shares, directly or indirectly, in Japan or
to or for the account of any resident thereof except for offers or sales to
Japanese International Underwriters or dealers and except pursuant to any
exemption from the registration requirements of the Securities and Exchange Law
and otherwise in compliance with applicable provisions of Japanese law, and that
such dealer will send to any other dealer to whom it sells any of such Shares a
notice containing substantially the same statement as is contained in this
sentence.

The Underwriters initially propose to offer part of the Shares directly to
the public at the public offering price set forth on the cover page hereof and
part to certain dealers at a price that represents a concession not in excess of
$.45 a Share under the public offering price. Any Underwriter may allow, and
such dealers may reallow, a concession not in excess of $.10 a Share to other
Underwriters or to certain dealers. After the initial offering of the Shares,
the offering price and other selling terms may from time to time be varied by
the Representatives.

The Corporation has agreed that, without the prior written consent of
Morgan Stanley & Co. Incorporated on behalf of the Underwriters, it will not,
during the period ending 90 days after the date of this Prospectus, (i) offer,
pledge, sell , contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase or otherwise transfer, lend or dispose of, directly or indirectly, any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or (ii) enter into any swap or other arrangement
that transfers to another, in whole or in part, any of the economic consequences
of ownership of the Common Stock, whether any such transaction described in
clause (i) or (ii) above is to be settled by delivery of Common Stock or such
other securities, in cash or otherwise. The restrictions described in this
paragraph do not apply to (a) the sale of Shares to the Underwriters, (b) the
issuance by the Corporation of shares of Common Stock upon the exercise of an
option or a warrant or the conversion of a security outstanding on the date of
this Prospectus of which the Underwriters have been advised in writing, (c)
private placements of shares of Common Stock by the Corporation, (d) the
issuance or grant of shares of Common Stock or options or rights to purchase
shares of Common Stock pursuant to benefit and compensation plans, (e)
transactions in shares of Common Stock in connection with the Corporation's
Dividend Reinvestment and Stock Purchase Plan, (f) the issuance or sale of
shares of Common Stock pursuant to acquisition agreements entered into prior to
the date of this Prospectus, (g) agreements or arrangements in connection with
acquisition transactions involving the issuance or sale of shares of Common
Stock or relating to options, rights, warrants or any securities convertible
into or exercisable or exchangeable for Common Stock, where the acquisition
transactions are consummated more than 90 days after the date of this
Prospectus, and (h) transactions under the Rights Agreement.

In order to facilitate the offering of the Common Stock, the Underwriters
may engage in transactions that stabilize, maintain or otherwise affect the
price of the Common Stock. Specifically, the Underwriters may over-allot in
connection with the offering, creating a short position in the Common Stock for
their own account. In addition, to cover over-allotments or to stabilize the
price of the Common Stock, the Underwriters may bid for, and purchase, shares of
Common Stock in the open market. Finally, the underwriting syndicate may reclaim
selling concessions allowed to an Underwriter or a dealer for distributing the
Common Stock in the offering, if the syndicate repurchases previously
distributed Common Stock in transactions to cover syndicate short positions, in
stabilization transactions or otherwise. Any of these activities may stabilize
or maintain the market price of the Common Stock above independent market
levels. The Underwriters are not required to engage in these activities, and may
end any of these activities at any time.

WFBS, the parent corporation of Wheat, First Securities, Inc., and the
Corporation have entered into an Agreement and Plan of Merger dated August 20,
1997, pursuant to which the Corporation will acquire WFBS upon the satisfaction
of certain conditions. See "The Corporation -- Recent Developments". The
participation of Wheat, First Securities, Inc., which is deemed to be an
"affiliate" or "subsidiary" of the Corporation pursuant to certain rules of the
National Association of Securities Dealers, Inc. (the "NASD"), and the
participation of Santander Investment Securities Inc., which may be deemed to be
an "affiliate" of the Corporation pursuant to such NASD rules, in the offer and
sale of the Shares will comply with the requirements of Rule 2720 of the NASD
regarding underwriting securities of an "affiliate". No NASD member
participating in the offers and sales will execute a transaction in the Shares
in a discretionary account without the prior written specific approval of the
member's customer.

<PAGE>
The Underwriters and certain of their affiliates and associates are
customers of, including borrowers from, engage in transactions with, and/or
perform services for, the Corporation and its subsidiaries in the ordinary
course of business. Also, in the ordinary course of their respective businesses,
affiliates of Santander Investment Securities Inc. and UBS Securities LLC
engage, and may in the future engage, in commercial banking and investment
banking transactions with the Corporation and its subsidiaries. The Underwriters
have performed investment banking services for the Corporation in the last two
years and have received fees in connection therewith.

The Corporation, the Selling Stockholder and the Underwriters have agreed
to indemnify each other against certain liabilities, including liabilities under
the Securities Act. The Underwriters have agreed to pay the expenses of the
Corporation and the Selling Stockholder in connection with the offering of the
Shares.

CERTAIN UNITED STATES TAX CONSEQUENCES
TO NON-U.S. HOLDERS OF COMMON STOCK

The following is a general discussion of certain United States federal
income and estate tax consequences of the ownership and disposition of Common
Stock by a person that, for United States federal income tax purposes, is a
non-resident alien individual, a foreign corporation, a foreign partnership or
an estate or trust, in each case not subject to United States federal income tax
on a net income basis in respect of income or gain from Common Stock (a
"non-U.S. holder"). This discussion does not consider the specific facts and
circumstances that may be relevant to particular holders and does not address
the treatment of non-U.S. holders of Common Stock under the laws of any state,
local or foreign taxing jurisdiction. Further, the discussion is based on
provisions of the United States Internal Revenue Code of 1986, as amended (the
"Code"), Treasury regulations thereunder, and administrative and judicial
interpretations thereof, all as in effect on the date hereof and all of which
are subject to change on a possibly retroactive basis. Each prospective holder
is urged to consult a tax advisor with respect to the United States federal tax
consequences of acquiring, holding and disposing of Common Stock, as well as any
tax consequences that may arise under the laws of any state, local or foreign
taxing jurisdiction.

DIVIDENDS

Dividends paid to a non-U.S. holder of Common Stock will be subject to
withholding of United States federal income tax at a 30 percent rate or such
lower rate as may be specified by an applicable income tax treaty, unless the
dividends are effectively connected with the conduct of a trade or business
within the United States (and are attributable to a United States permanent
establishment of such holder, if an applicable income tax treaty so requires as
a condition for the non-U.S. holder to be subject to United States income tax on
a net income basis in respect of such dividends). Such "effectively connected"
dividends are subject to tax at rates applicable to United States citizens,
resident aliens and domestic United States corporations, and are not generally
subject to withholding. Any such effectively connected dividends received by a
non-United States corporation may also, under certain circumstances, be subject
to an additional "branch profits tax" at a 30 percent rate or such lower rate as
may be specified by an applicable income tax treaty.

Under current United States Treasury regulations, dividends paid to an
address in a foreign country are presumed to be paid to a resident of that
country (unless the payor has knowledge to the contrary) for purposes of the
withholding discussed above and, under the current interpretation of United
States Treasury regulations, for purposes of determining the applicability of a
tax treaty rate. Under proposed United States Treasury regulations (the
"Proposed Regulations"), however, a non-U.S. holder of Common Stock who wishes
to claim the benefit of an applicable treaty rate would be required to satisfy
applicable certification requirements. In addition, under the Proposed
Regulations, in the case of Common Stock held by a foreign partnership, (x) the
certification requirement would generally be applied to the partners of the
partnership and (y) the partnership would be required to provide certain
information, including a United States taxpayer identification number. The
Proposed Regulations also provide look-through rules for tiered partnerships. It
is not certain whether, or in what form, the Proposed Regulations will be
adopted as final regulations.

A non-U.S. holder of Common Stock that is eligible for a reduced rate of
United States withholding tax pursuant to a tax treaty may obtain a refund of
any excess amounts currently withheld by filing an appropriate claim for refund
with the United States Internal Revenue Service.

GAIN ON DISPOSITION OF COMMON STOCK

A non-U.S. holder generally will not be subject to United States federal
income tax in respect of gain recognized on a disposition of Common Stock except
in the following circumstances: (i) the gain is effectively connected with a
trade or business conducted by the non-U.S. holder in the United States (and is
attributable to a permanent establishment maintained

<PAGE>
in the United States by such non-U.S. holder if an applicable income tax treaty
so requires as a condition for such non-U.S. holder to be subject to United
States taxation on a net income basis in respect of gain from the sale or other
disposition of the Common Stock); (ii) in the case of a non-U.S. holder who is
an individual and holds the Common Stock as a capital asset, such holder is
present in the United States for 183 or more days in the taxable year of the
sale and certain other conditions exist; or (iii) the Corporation is or has been
a "United States real property holding corporation" for federal income tax
purposes and the non-U.S. holder held, directly or indirectly at any time during
the five-year period ending on the date of disposition, more than 5 percent of
the Common Stock (and is not eligible for any treaty exemption). Effectively
connected gains realized by a corporate non-U.S. holder may also, under certain
circumstances, be subject to an additional "branch profits tax" at a 30 percent
rate or such lower rate as may be specified by an applicable income tax treaty.
The Corporation has not been, is not, and does not anticipate becoming a "United
States real property holding corporation" for federal income tax purposes.

FEDERAL ESTATE TAXES

Common Stock held by a non-U.S. holder at the time of death will be
included in such holder's gross estate for United States federal estate tax
purposes, unless an applicable estate tax treaty provides otherwise.

INFORMATION REPORTING AND BACKUP WITHHOLDING

Under current law, United States information reporting requirements (other
than reporting of dividend payments for purposes of the withholding tax noted
above) and backup withholding tax generally will not apply to dividends paid to
non-U.S. holders that are either subject to the 30 percent withholding discussed
above or that are not so subject because an applicable tax treaty reduces such
withholding. Otherwise, backup withholding of United States federal income tax
at a rate of 31 percent may apply to dividends paid with respect to Common Stock
to holders that are not "exempt recipients" and that fail to provide certain
information (including the holder's United States taxpayer identification
number). Generally, unless the payor of dividends has definite knowledge that
the payee is a United States person, the payor may treat dividend payments to a
payee with a foreign address as exempt from information reporting and backup
withholding. However, under the Proposed Regulations, dividend payments
generally will be subject to information reporting and backup withholding unless
applicable certification requirements are satisfied. See the discussion above
with respect to the rules applicable to foreign partnerships under the Proposed
Regulations.

In general, United States information reporting and backup withholding
requirements also will not apply to a payment made outside the United States of
the proceeds of a sale of Common Stock through an office outside the United
States of a non-United States broker. However, United States information
reporting (but not backup withholding) requirements will apply to a payment made
outside the United States of the proceeds of a sale of Common Stock through an
office outside the United States of a broker that is a United States person,
that derives 50 percent or more of its gross income for certain periods from the
conduct of a trade or business in the United States, or that is a "controlled
foreign corporation" as to the United States, unless the broker has documentary
evidence in its records that the holder or beneficial owner is a non-United
States person or the holder or beneficial owner otherwise establishes an
exemption. Payment of the proceeds of the sale of Common Stock to or through a
United States office of a broker is currently subject to both United States
backup withholding and information reporting unless the holder certifies its
non-United States status under penalties of perjury or otherwise establishes an
exemption.

A non-United States holder generally may obtain a refund of any excess
amounts withheld under the backup withholding rules by filing the appropriate
claim for refund with the United States Internal Revenue Service.

VALIDITY OF SHARES OF COMMON STOCK

The validity of the Shares in the Offering will be passed upon for the
Corporation by Marion A. Cowell, Jr., Esq., Executive Vice President, Secretary
and General Counsel of the Corporation, and, as to the Shares being offered by
the Corporation, for the Underwriters by Sullivan & Cromwell, 125 Broad Street,
New York, New York. Sullivan & Cromwell will rely upon the opinion of Mr. Cowell
as to matters of North Carolina law, and Mr. Cowell will rely upon the opinion
of Sullivan & Cromwell as to matters of New York law. Mr. Cowell owns shares of
Common Stock and holds options to purchase additional shares of Common Stock.
Sullivan & Cromwell regularly performs legal services for the Corporation and
its subsidiaries. Certain members of Sullivan & Cromwell performing these legal
services own shares of Common Stock.

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EXPERTS

The consolidated balance sheets of the Corporation as of December 31, 1996
and 1995, and the related consolidated statements of income, changes in
stockholders' equity and cash flows for each of the years in the three-year
period ended December 31, 1996, included in the Corporation's 1996 Annual Report
to Stockholders which is incorporated by reference in the Corporation's 1996
Annual Report on Form 10-K and incorporated by reference herein, have been
incorporated by reference herein in reliance upon the report of KPMG Peat
Marwick LLP, independent certified public accountants, incorporated by reference
herein, and upon the authority of said firm as experts in accounting and
auditing.

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