FIRST CITIZENS BANCORPORATION OF SOUTH CAROLINA INC, 10-K, 1999-03-29

FIRST CITIZENS BANCORPORATION OF SOUTH CAROLINA INC
10-K, 1999-03-29
STATE COMMERCIAL BANKS

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FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

ANNUAL REPORT UNDER SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 1998 Commission File Number 0-11172

FIRST CITIZENS BANCORPORATION OF SOUTH CAROLINA, INC.
-----------------------------------------------------
(Exact name of registrant as specified in its charter)

State of South Carolina 57-0738665
----------------------- -------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)

1230 Main Street
Columbia, South Carolina 29201
- --------------------------------------- ----------
(Address of principal executive offices) (Zip Code)

Registrant's telephone number including area code (803) 733-3456

Securities Registered Pursuant to Section 12(b) of the Act:

None
- --------------------------------------------------------------------------------

Securities Registered Pursuant to Section 12 (g) of the Act:

Common Stock, $5.00 per value
- --------------------------------------------------------------------------------
(Title of Class)

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES [ X ] NO [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
Regulation S-K is not contained herein, and will not be contained, to be the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

The aggregate market value of the Registrant's Voting and Nonvoting Common Stock
held by non-affiliates as of March 12, 1999 was $108,980,640. The Registrant's
voting Preferred Stock is not regularly traded and has no quoted prices and
therefore has no readily ascertainable market value.

As of March 12, 1999, there were 882,766 outstanding shares of the Registrant's
Voting Common Stock, $5.00 par value per share, and 36,409 outstanding shares of
its Non-Voting Common Stock, $5.00 par value per share.

DOCUMENTS INCORPORATED BY REFERENCE
-----------------------------------

(1) Portions of the Registrant's Annual Report to Shareholders for the
fiscal year ended December 31, 1998, are incorporated by reference into Parts I
and II.

(2) Portions of the Registrant's definitive Proxy Statement for the Annual
Meeting of Shareholders to be held April 28, 1999, are incorporated by reference
into Part III.

<PAGE>

PART I.

ITEM 1. BUSINESS
First Citizens Bancorporation of South Carolina, Inc. ("Bancorporation" or
"Registrant"), a South Carolina corporation, is a bank holding company organized
in 1982 which owns all the outstanding stock of First-Citizens Bank and Trust
Company of South Carolina ("Bank"). The Bank, which is the principal asset and
source of income of Bancorporation, is engaged in the general banking business
throughout South Carolina and offers complete retail, commercial banking and
trust services. The net income of the Bank constituted approximately 106% of the
consolidated net income of Bancorporation for the year ended December 31, 1998,
and the assets of the Bank constituted approximately 100% of the consolidated
assets of Bancorporation at December 31, 1998. Wateree Enterprises, Inc., a
wholly-owned subsidiary of the Bank, through its wholly-owned subsidiary,
Wateree Life Insurance Company, a South Carolina corporation, issues credit
life, accident and health insurance on borrowers from the Bank. Another
wholly-owned subsidiary of Wateree Enterprises, Inc. is Wateree Agency, Inc., a
South Carolina corporation, which acts as agent for the sale of insurance to the
Bank's customers.

SUPERVISION AND REGULATION
As a bank holding company, Bancorporation is subject to regulation by the
Federal Reserve Board ("FRB") under the Bank Holding Company Act of 1956, as
amended ("BHC Act"), and its examination and reporting requirements.
Bancorporation is likewise subject to the requirements of the BHC Act which
impose certain limitations and restrictions on the degree to which
Bancorporation may conduct non-banking activities and the extent to which
Bancorporation may engage in merger and acquisition activities. In addition to
the provisions of the BHC Act, state banking commissions serve in a supervisory
and regulatory capacity with respect to bank holding company activities.
Federal law regulates transactions among Bancorporation and its affiliates,
including the amount of its banking affiliate's loans to, or investment in,
non-banking affiliates. In addition, various requirements and restrictions under
federal and state laws regulate the operations of Bancorporation's banking
affiliate, requiring the maintenance of reserves against deposits, limiting the
nature of loans and interest that may be charged thereon, restricting
investments and other activities, and subjecting the banking affiliate to
regulation and examination by the state banking authorities and the Federal
Deposit Insurance Corporation ("FDIC").
There are various legal and regulatory limits on the extent to which
Bancorporation's subsidiary bank may pay dividends or otherwise supply funds to
Bancorporation. In addition, federal and state regulatory agencies have the
authority to prevent a bank or bank holding company from paying a dividend or
engaging in any activity that, in the opinion of the agency, would constitute an
unsafe or unsound practice.
Under FRB policy, Bancorporation is expected to act as a source of
financial strength to, and commit resources to support, its subsidiary bank. In
addition, under the Financial Institutions Reform, Recovery and Enforcement Act
("FIRREA"), a depository institution insured by the FDIC can be held liable for
any loss incurred by, or reasonably expected to be incurred by, the FDIC in
connection with the default of a commonly controlled FDIC insured depository
institution. Under the Federal Deposit Insurance Corporation Improvement Act of
1991 ("FDICIA"), federal banking regulators are required to take prompt
corrective action with respect to depository institutions that do not meet
minimum capital requirements. FDICIA generally prohibits a depository
institution from making any capital distribution or paying management fees to
its holding company if the depository institution would thereafter be
undercapitalized. In addition, undercapitalized institutions will be subject to
restrictions on borrowing from the Federal Reserve System, to growth limitations
and to obligations to submit capital restoration plans. In order for a capital
restoration plan to be acceptable, the depository institution's parent holding
company must guarantee the institution's compliance with the capital restoration
plan up to an amount not exceeding 5% of the depository institution's total
assets. Significantly undercapitalized institutions are subject to greater
restrictions, and critically undercapitalized institutions are subject to
appointment of a receiver.
FDICIA also substantially revises the bank regulatory insurance coverage
and funding provisions of the Federal Deposit Insurance Act and makes revisions
to several other federal banking statutes. FDICIA imposes substantial new
examination, audit and reporting requirements on insured depository
institutions. Under FDICIA, each federal banking agency must prescribe standards
for depository institutions and depository institution holding companies
relating to internal controls, information systems, internal audit systems, loan
documentation, credit underwriting, interest rate exposure, asset growth,
compensation, a maximum ratio of classified assets to capital, minimum earnings
sufficient to absorb losses, a minimum ratio of market value to book value for
publicly traded shares, and other standards as the agency deems appropriate.

2
<PAGE>

The FDIC has adopted or currently proposes to adopt rules pursuant to
FDICIA that include: (a) real estate lending standards for banks; (b) revision
of the risk-based capital rules; (c) rules requiring depository institutions to
develop and implement internal procedures to evaluate and control credit and
settlement exposure to their correspondent banks; (d) a rule restricting the
ability of depository institutions that are not well capitalized from accepting
brokered deposits; (e) rules addressing various "safety and soundness" issues,
including operations and managerial standards for asset quality, earnings and
stock valuations, and compensation standards for the officers, directors,
employees and principal shareholders of the depository institution; and (f)
rules mandating enhanced financial reporting and audit requirements.

FIRST-CITIZENS BANK AND TRUST COMPANY OF SOUTH CAROLINA
The Bank was organized as a state bank in 1964. Its predecessor, Anderson
Brothers Bank, was organized in 1936. As measured by deposits, the Bank is the
sixth largest commercial bank in South Carolina and has 132 offices throughout
South Carolina.
The Bank is an insured bank and is supervised, examined and regulated by
the FDIC and the South Carolina State Board of Financial Institutions.
For the year ended December 31, 1998, approximately 66.6% of the revenues of
the Bank were derived from interest and fees on loans, 17.2% from income on
investment securities, 1.3% from income on temporary investments, 0.8% from
trust fees, 8.4% from service charges on deposit accounts and 5.7% from other
sources.
During 1998, the Bank acquired branch locations in Hollywood and
Prosperity, South Carolina, from another financial institution. Further
information concerning these transactions is contained in the section entitled
"Management's Discussion and Analysis" of the Registrant's 1998 Annual Report to
Shareholders which is incorporated herein by reference.
Commercial Banking Services. The Bank provides a wide range of traditional
commercial banking and related financial services to customers engaged in
manufacturing, wholesaling, retailing, providing services, buying and selling
real estate, and agriculture, and to institutions and agencies of state
government. It makes commercial loans for various purposes, including working
capital, real estate financing and equipment financing. As of December 31, 1998,
commercial and real estate loans accounted for approximately 76% of the Bank's
total loans. Interest and fees on commercial and real estate loans constituted
47% of the Bank's operating revenues for the year ended December 31, 1998.
Consumer Services. The Bank provides a full range of consumer banking
services, including but not limited to checking accounts, savings programs,
installment lending services, real estate loans, trust accounts and safe deposit
facilities through its branch offices in South Carolina. The Bank provides
automated teller machines in over 127 locations and participates in an
electronic transfer network which presently gives customers access to their
accounts through automated teller machines worldwide. The Bank issues MasterCard
and VISA cards. As of December 31, 1998, consumer loans accounted for
approximately 21% of the Bank's total loan portfolio. Interest and fees for
consumer loans and services contributed 17% of the Bank's operating revenues for
the year ended December 31, 1998.
Trust Services. Through its trust department, the Bank offers a full range
of trust services. To individuals, the services offered include acting as
executor and administrator of decedents' estates, trustee of various types of
trusts, guardian of estates of minors and incompetents, portfolio management
service, investment counseling and assistance in estate planning. For
corporations, offered services include acting as registrar, transfer agent,
dividend paying agent for stock issues, and as trustee for bond and debenture
issues and pension and profit sharing plans. Fees for trust services contributed
0.8% of the Bank's operating revenues for the year ended December 31, 1998.

STATISTICAL DATA
Certain statistical disclosures for bank holding companies required by
Guide 3 are included in the section entitled "Management's Discussion and
Analysis" on pages 3 through 19 of the Registrant's 1998 Annual Report to
Shareholders which is incorporated herein by reference.

NON-BANKING SUBSIDIARY
Wateree Life Insurance Company issues credit life insurance to
borrowers from the Bank. All policies in excess of $30,000 and individual
accident and health policies are insured by another insurance company. The
company had earned premiums of $1,296,032 or 0.7% of Bancorporation's
consolidated operating revenues for the year ended December 31, 1998. For the
year ended December 31, 1998, Wateree had income of $687,154. Total insurance in
force amounted to $84,019,000 at December 31, 1998.

3
<PAGE>

Wateree Agency, Inc. acts as agent for the sale of insurance to the
Bank's customers. Net income for the year ended December 31, 1998 was not
material.

EMPLOYEES OF BANCORPORATION
Bancorporation has no salaried employees. As of December 31, 1998, the Bank
and its subsidiaries had 1,147 full-time equivalent employees. Bancorporation
and its subsidiaries are not parties to any collective bargaining agreement and
relations with employees are considered to be good.

COMPETITION
Because South Carolina allows statewide branch banking, the Bank must
compete in local markets throughout the state with other depository
institutions. The Bank is subject to intense competition from various financial
institutions and other companies or firms that engage in similar activities,
both for local business in individual communities and for business in the
national market. The Bank competes for deposits with other commercial banks,
savings and loan associations, credit unions and with the issuers of commercial
paper and other securities, such as shares in money market funds. In making
loans, the Bank competes with other commercial banks, savings and loan
associations, consumer finance companies, credit unions, leasing companies and
other lenders. In addition, competition for personal and corporate trust
services is offered by insurance companies, other businesses and individuals.
A factor which also has increased competition in the Bank's local markets
is reciprocal interstate banking legislation. Prior to adoption of the federal
"Interstate Banking Law" described below, South Carolina law allowed bank
holding companies in 12 other Southeastern states and the District of Columbia
to acquire banks and bank holding companies in South Carolina, provided that
reciprocal legislation had been passed in such other state or district. As a
result, a number of large bank holding companies located in other states and
having consolidated resources greater than those of Bancorporation (among them
four of the largest in the Southeastern United States) acquired banks located in
South Carolina with which the Bank competes in its local markets. The Bank is
the sixth largest bank in South Carolina in terms of assets and the second
largest bank owned by a South Carolina based holding company.
During September 1994, Congress adopted new legislation which, subject to
certain limitations, permits adequately capitalized and managed bank holding
companies to acquire control of a bank in any state (the "Interstate Banking
Law"). Also, beginning June 1, 1997 and subject to certain limitations, the
Interstate Banking Law permitted banks to merge with one another across state
lines. Each state was allowed to authorize mergers earlier than that date and
also choose to permit out-of-state banks to open branch offices within that
state's borders. Alternatively, a state could opt out of interstate branching by
adopting legislation before June 1, 1997. As of March 1999, South Carolina has
not adopted any such legislation in response to the Interstate Banking Law.

ITEM 2. PROPERTIES
Bancorporation owns in fee simple one piece of property having a book value
at December 31, 1998 of $47,054. To the limited extent necessary, it occupies
space owned by the Bank. Bancorporation's and the Bank's principal office is
located at 1230 Main Street in Columbia, South Carolina.
The Bank owns in fee simple 199 properties having a book value at December
31, 1998 of $48,262,993 which are used for its main office, branch office
locations, associated parking lots for customers and employees, or housing other
operational units of the Bank. In addition, the Bank leases 34 properties,
substantially all of which are used for branch office locations and associated
parking lots for customers and employees. All of these leases are for relatively
long terms or include renewal options considered by management of the Bank to be
adequate. Rental expense paid for these properties in 1998 was approximately
$654,000, which was offset by $1,050,000 in rental income.
The properties leased and owned are all generally considered adequate for
the Bank's purposes; however, there is a continuing program of modernization,
expansion, and the occasional replacement of facilities. Maintenance and repairs
are not significant items of expense in the Bank's operations. Items of a
capital nature are added to the property accounts, and, at such time as they are
retired or otherwise disposed of, the cost and accumulated depreciation are
removed from the related accounts and the resulting gains or losses are
reflected in income.
For information concerning Bancorporation's commitments under current
leasing arrangements, see Note 6 to Bancorporation's Consolidated Financial
Statements.

ITEM 3. LEGAL PROCEEDINGS

4
<PAGE>

Neither Bancorporation nor its subsidiary, the Bank, nor its subsidiaries,
are a party to, nor is any of their property the subject of, any material or
other pending legal proceeding, other than ordinary routine proceedings
incidental to their business.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None

5
<PAGE>

PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
The information required by this item is incorporated herein by reference
to the section entitled "Market and Dividend Information Regarding Common and
Preferred Stock" on the inside cover of the Registrant's 1998 Annual Report to
Shareholders.

ITEM 6. SELECTED FINANCIAL DATA
The information required by this item is incorporated herein by reference
to the section entitled "Financial Highlights" on Page 1 of the Registrant's
1998 Annual Report to Shareholders.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
The information required by this item is incorporated herein by reference
to the section entitled "Management's Discussion and Analysis" on pages 3
through 19 of the Registrant's 1998 Annual Report to Shareholders. The
statistical disclosures for bank holding companies required by Guide 3 are
included therein.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this item is incorporated herein by reference
to the financial statements and supplementary data set forth on pages 20 through
39 of the Registrant's 1998 Annual Report to Shareholders.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information under the captions "PROPOSAL 2: ELECTION OF DIRECTORS",
"Executive Officers", and "Section 16(a) Beneficial Ownership Reporting
Compliance", of Bancorporation's definitive Proxy Statement for its Annual
Meeting of Shareholders to be held April 28, 1999, is incorporated herein by
reference.

ITEM 11. EXECUTIVE COMPENSATION
The information under the captions "Directors' Fees", "Compensation
Committee Interlocks and Insider Participation", "Executive Compensation" and
"Pension Plan and other Post-Retirement Benefits" of Bancorporation's definitive
Proxy Statement for its Annual Meeting of Shareholders to be held April 28,
1999, is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information under the captions "PRINCIPAL HOLDERS OF VOTING
SECURITIES", and "OWNERSHIP OF SECURITIES BY MANAGEMENT" of Bancorporation's
definitive Proxy Statement for its Annual Meeting of Shareholders to be held
April 28, 1999, is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information in Footnotes (3) and (5) to the table under the caption
"PROPOSAL 2: ELECTION OF DIRECTORS", and the information under the captions
"Compensation Committee Interlocks and Insider Participation" and "Transactions
with Management", of Bancorporation's definitive Proxy Statement for its Annual
Meeting of Shareholders to be held April 28, 1999, is incorporated herein by
reference.

6
<PAGE>

PART IV

ITEM 14. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) (1)Financial Statements:
The following consolidated financial statements of First Citizens
Bancorporation of South Carolina, Inc. and subsidiary included in the
Registrant's 1998 Annual Report to Shareholders are incorporated by
reference in Item 8 from pages 20 through 39 of the Annual Report:

Report of Independent Accountants
Consolidated Statements of Condition
Consolidated Statements of Income
Consolidated Statements of Changes in Stockholders' Equity
and Comprehensive Income
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements

(2) Financial Statement Schedules:
All schedules are omitted as the required information is either
inapplicable or is presented in the consolidated financial statements
of the Registrant and its subsidiary or Notes thereto incorporated
herein by reference.

(3) The following exhibits are either attached hereto or incorporated
by reference:
3.1 Articles of Incorporation of the Registrant as amended
(incorporated herein by reference to Exhibit 3.1 of the
Registrant's 1994 Annual Report on Form 10-K).

3.3 Bylaws of the Registrant as amended (incorporated herein by
reference to Exhibit 3.3 of the Registrant's 1998 Annual
Report on Form 10-K).

10.1a Term Loan Agreement (incorporated herein by reference to
Exhibit 10.1 in the Registrant's 1987 Annual Report on
Form 10-K).

10.1b Credit Agreement between First Citizens Bancorporation of
South Carolina and Wachovia Bank, N.A. (incorporated herein
by reference to Exhibit 10.1b in the Registrant's 1997 Annual
Report on Form 10-K).

10.2 Employment Agreement between E. Hite Miller, Sr. and the Bank
dated April 21, 1998 (filed herewith)

*10.3 Employee Death Benefit and Post-Retirement Noncompetition and
Consultation Agreement, dated December 31, 1998, between the
Bank and E. Hite Miller, Sr. (filed herewith).

*10.4 Employee Death Benefit and Post-Retirement Noncompetition and
Consultation Agreement, dated December 31, 1998, between the
Bank and Jim B. Apple (filed herewith).

*10.5 Employee Death Benefit and Post-Retirement Noncompetition and
Consultation Agreement, dated December 31, 1998, between the
Bank and Jay C. Case (filed herewith).

*10.6 Employee Death Benefit and Post-Retirement Noncompetition and
Consultation Agreement, dated December 31, 1998, between the
Bank and Charles S. McLaurin, III (filed herewith).

*10.7 Employee Death Benefit and Post-Retirement Noncompetition and
Consultation Agreement, dated December 31, 1998, between the
Bank and Charles D. Cook (filed herewith).

7
<PAGE>

*10.8 Amended and Restated Trust Agreement of FCB/SC Capital Trust
I (incorporated herein by reference to Exhibit 4.1 of
Registrant's Registration Statement No. 333-60319 filed with
the SEC on July 31, 1998).

*10.9 Form of Guarantee Agreement (incorporated herein by reference
to Exhibit 4.2 of Registrant's registration Statement
No.333-60319 filed with the SEC on July 31, 1998).

*10.10 Junior Subordinated Indenture between Registrant and Bankers
Trust Company, as Debenture Trustee (incorporated herein by
reference to Exhibit 4.3 of Registrant's Registration
Statement No. 333-60319 filed with the SEC on July 31, 1998).

13. Registrant's 1998 Annual Report to Shareholders (filed
herewith).

22. Subsidiaries of the Registrant (filed herewith).

27. Financial Data Schedule (filed herewith).

**99. Registrant's Definitive Proxy Statement for the Annual
Meeting to be held April 28, 1999.

*Denotes a management contract or compensatory plan or arrangement
in which an executive officer or director of Registrant
participates.

**Pursuant to Rule 12b-23(a)(3), this exhibit is not being refiled.

(b)Reports on Form 8-K:
No reports on Form 8-K were filed during the three month period
ended December 31, 1998.

8
<PAGE>

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.

Dated: 03/29/99 FIRST CITIZENS BANCORPORATION
OF SOUTH CAROLINA, INC.
(Registrant)

By: /s/ Jay C. Case
---------------------------
Jay C. Case, Treasurer and
Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the date indicated.

SIGNATURES TITLE DATE
- ---------- ----- ----

/s/ E. Hite Miller Chairman of the Board 03/29/99
- ----------------------- --------
E. Hite Miller, Sr.

/s/ Frank B. Holding Vice Chairman of the Board 03/29/99
- ----------------------- --------
Frank B. Holding

/s/ Jim B. Apple President and Director 03/29/99
- ----------------------- --------
Jim B. Apple

/s/ Jay C. Case Treasurer and Chief 03/29/99
- ----------------------- Financial Officer --------
Jay C. Case

Director
- ----------------------- --------
Richard W. Blackmon

s/ George H. Broadrick Director 03/29/99
- ----------------------- --------
George H. Broadrick

Director
- ----------------------- --------
Laurens W. Floyd

/s/ William E. Hancock Director 03/29/99
- ----------------------- --------
William E. Hancock, III

/s/ Robert B. Haynes Director 03/29/99
- ----------------------- --------
Robert B. Haynes

/s/ Wycliffe E. Haynes Director 03/29/99
- ----------------------- --------
Wycliffe E. Haynes

/s/ Lewis M. Henderson Director 03/29/99
- ----------------------- --------
Lewis M. Henderson

Director
- ----------------------- --------
Carmen P. Holding

Director
- ----------------------- --------
Dan H. Jordan

9
<PAGE>

SIGNATURES TITLE DATE
- ---------- ----- ----

/s/ N. Welch Morrisette, Jr. Director 03/29/99
- ----------------------- --------
N. Welch Morrisette, Jr.

/s/ E. Perry Palmer Director 03/29/99
- ----------------------- --------
E. Perry Palmer

/s/ William E. Sellers Director 03/29/99
- ----------------------- --------
William E. Sellers

/s/ Henry F. Sherrill Director 03/29/99
- ----------------------- --------
Henry F. Sherrill

10
<PAGE>

FORM 10-K
- --------------------------------------------------------------------------------
EXHIBIT INDEX

Exhibit Number Exhibit
- -------------- -------

3.1 Articles of Incorporation of Registrant (incorporated herein
by reference to Exhibit 3.1 of the Registrant's 1994 Annual
Report on Form 10-K)

3.3 Bylaws of the Registrant as amended (incorporated herein by
reference to Exhibit 3.3 of the Registrant's 1997 Annual
Report on Form 10-K).

10.1a Term Loan Agreement (incorporated herein by reference to
Exhibit 10.1 of the Registrant's 1987 Annual Report on Form
10-K)

10.1b Credit Agreement between First-Citizens Bancorporation of
South Carolina and Wachovia Bank, N.A. (incorporated herein by
reference to Exhibit 10.1b in the Registrant's 1997 Annual
Report on Form 10-K).

10.2 Employment Agreement between E. Hite Miller, Sr. and the Bank
(filed herewith).

10.3 Employee Death Benefit and Post-Retirement Noncompetition and
Consultation Agreement, dated December 31, 1998, between the
Bank and E. Hite Miller, Sr. (filed herewith).

10.4 Employee Death Benefit and Post-Retirement Noncompetition and
Consultation Agreement, dated December 31, 1998, between the
Bank and Jim B. Apple (filed herewith).

10.5 Employee Death Benefit and Post-Retirement Noncompetition and
Consultation Agreement, dated December 31, 1998, between the
Bank and Jay C. Case (filed herewith).

10.6 Employee Death Benefit and Post-Retirement Noncompetition and
Consultation Agreement, dated December 31, 1998, between the
Bank and Charles S. McLaurin, III (filed herewith).

10.7 Employee Death Benefit and Post-Retirement Noncompetition and
Consultation Agreement, dated December 31, 1998, between the
Bank and Charles D. Cook (filed herewith).

10.8 Amended and Restated Trust Agreement of FCB/SC Capital Trust I
(incorporated herein by reference to Exhibit 4.1 of
Registrant's Registration Statement No. 333-60319 filed with
the SEC on July 31, 1998).

10.9 Form of Guarantee Agreement (incorporated herein by reference
to Exhibit 4.2 of Registrant's registration Statement
No.333-60319 filed with the SEC on July 31, 1998).

10.10 Junior Subordinated Indenture between Registrant and Bankers
Trust Company, as Debenture Trustee (incorporated herein by
reference to Exhibit 4.3 of Registrant's Registration
Statement No. 333-60319 filed with the SEC on July 31, 1998).

13 Registrant's 1998 Annual Report to Shareholders (filed
herewith)

22 Subsidiaries of Registrant (filed herewith)

27 Financial Data Schedule (filed herewith)

11
<PAGE>

(Electronic filing only)

12
<PAGE>

99 Registrant's Definitive Proxy Statement for the Annual Meeting
to be held April 28, 1999.*

*Pursuant to Rule 12b-23(a) (3), this exhibit is not being filed.

Exhibit 10.2

April 21, 1998

Mr. E. Hite Miller, Sr.
First Citizens Bank and Trust
Company of South Carolina
Post Office Box 29
Columbia, SC 29202

Dear Mr. Miller:

This letter will confirm the agreement between First Citizens Bank and
Trust Company of South Carolina ("Bank") and you, E. Hite Miller, Sr., under the
terms of which you will be employed as a full-time executive officer of Bank.

The term of this employment shall be for a period of three (3) years from
the date of this letter. It is the intent and hope of the Bank that you will
continue thereafter as a contributing executive officer as your health permits,
with appropriate compensation.

Your salary will be the salary which has been approved for the year 1998,
with annual increases in such amounts as Bank deems appropriate, but in no event
less than the average increase granted to other bank executives whose salaries
are required to be approved by the Compensation Committee. You shall also have
the right to receive and participate in any additional benefits, including, but
not limited to, insurance programs, medical reimbursement programs, and other
types of benefit programs which may, from time to time, be made available to
other executive officers of the Bank.

The terms and conditions of the letter agreement between you and Bank
dated September 14, 1978, and modified October 31, 1979, have expired and are
superseded by the terms and conditions of this letter.

If these terms are in accordance with your understanding, please
acknowledge your agreement below.

Sincerely,
/s/ Jim B. Apple
-----------------------
Jim B. Apple
JBA:cws

AGREED:

/s/ E. Hite Miller, Sr.
- -----------------------
E. HITE MILLER, SR.

14
<PAGE>

FIRST CITIZENS BANK AND TRUST COMPANY OF SOUTH CAROLINA

COMPENSATION COMMITTEE

APRIL 22, 1998

A meeting of the Compensation Committee of First Citizens Bank and Trust
Company of South Carolina (the "Bank") was held in the third floor board room of
the First Citizens Banking Center, Washington and Park Streets, Columbia, South
Carolina on Wednesday, April 22, 1998, commencing at 2:00 p.m.

MEMBERS PRESENT
---------------

G. H. BROADRICK, CHAIRMAN
W. E. SELLARS
H. F. SHERRILL

ALSO PRESENT
------------

E. W. Wells, Senior Vice President

Mr. Broadrick presided as Chairman and Mr. Wells acted as Secretary.

Mr. Sherrill presented the following resolution:

RESOLVED that this committee hereby approves and ratifies the employment
agreement between the Bank and E. Hite Miller, Sr. dated April 21, 1998, and
executed for the Bank by Jim b. Apple, its President.

A copy of said agreement is filed with the minutes of this meeting.

There being no further business to come before the Committee, the
meeting was adjourned.

/s/ E. W. Wells
--------------------
E. W. Wells
Corporate Secretary

EXHIBIT 10.3

EMPLOYEE DEATH BENEFIT AND POST-RETIREMENT NONCOMPETITION
AND CONSULTATION AGREEMENT

THIS AGREEMENT, made and entered into and effective as of the
31st day of December, 1998, by and between FIRST-CITIZENS BANK AND TRUST COMPANY
OF SOUTH CAROLINA, a South Carolina banking corporation with its principal
office in Columbia, South Carolina (hereinafter referred to as "Employer"); and
E. HITE MILLER, SR., an employee of Employer, who is currently serving as
Chairman of the Board (hereinafter referred to as "Employee");

W I T N E S S E T H:

WHEREAS, Employee has provided guidance, leadership and direction
in the growth, management and development of Employer, during which time
Employee has learned trade secrets, confidential procedures and information, and
technical and sensitive plans of Employer; and,

WHEREAS, Employer values the efforts, abilities and
accomplishments of Employee as an important member of management and desires to
continue to have Employee's experience and knowledge available to it following
Employee's retirement from employment with Employer; and,

WHEREAS, Employer desires to limit Employee's availability to
other employers or entities which are in competition with Employer following
Employee's retirement from employment with Employer; and,

WHEREAS, Employer, as part of a plan adopted for a class of
employees of Employer, has offered to Employee a noncompetition arrangement
together with a limited, when-called, independent contractor consultation
service arrangement and a death benefit arrangement for Employee's designated
beneficiary or Estate, as applicable, and the parties hereto have reached an
agreement concerning the independent contractor consulting relationship, the
noncompetition arrangement, the death benefit arrangement and other matters
contained herein and desire to set forth the terms and conditions thereof.

NOW, THEREFORE, for and in consideration of the mutual promises
and undertakings herein set forth, the parties hereto do agree as follows:

1. RETIREMENT DATE. The term "Retirement Date," as used herein,
shall be defined for purposes of this Agreement as the last day of the calendar
month in which Employee attains the age of seventy-eight (78) or as such date
prior or subsequent thereto as shall be agreed upon between Employer and
Employee.

16
<PAGE>

in an effort to provide opportunities and continuity, to encourage retirement at
age sixty-five (65) and to require retirement at age sixty-five (65) where
permissible by law; provided, however, that Employer desires and needs the
continuing services of Employee at this time and the parties hereto have agreed
to the modified Retirement Date for Employee.

2. DEATH BENEFITS. In the event Employee dies while employed by
Employer prior to Employee's Retirement Date, Employer will pay the sum of
Sixty-Two Thousand Five Hundred and 02/100 Dollars ($62,500.02) per year,
payable in monthly installments of Five Thousand Two Hundred Eight and 34/100
Dollars ($5,208.34), for a period of ten (10) years, to such individual or
individuals as Employee shall have designated in writing filed with Employer or,
in the absence of such designation, to the Estate of Employee. The first payment
shall be made not later than two (2) months following Employee's death. Payments
hereunder shall be payable each month without deductions and the recipient shall
be solely responsible for the payment of all income and other taxes and
assessments applicable on said payments.

3. CONSULTATION PAYMENTS. In the event Employee retires from
employment on Employee's Retirement Date, Employee shall be paid by Employer the
sum of One Thousand Three Hundred Two and 08/100 Dollars ($1,302.08) per month,
beginning not later than two (2) months after Employee's Retirement Date, for a
period of ten (10) years following Employee's Retirement Date or until death,
whichever first occurs. Such monthly payments shall be paid for and in
consideration of Employee's Consultation Services, as provided herein; such sum
to be payable to Employee whether or not Employee's Consultation Services have
been utilized by Employer. Consultation Payments hereunder shall be payable each
month without deductions and Employee agrees to be solely responsible for the
payment of all income and other taxes out of said funds and all Social Security,
self-employment and any other taxes or assessments, if any, applicable on said
compensation.

For and in consideration of said monthly Consultation Payments
to Employee, Employee will provide support, sponsorship, advisory and
Consultation Services as an independent contractor to Employer, as and when
Employer may request, which services may be provided with respect to all phases
of Employer's business and particularly those phases in which Employee has
particular expertise and knowledge. Employee's services shall be limited to
those of an independent consultant, shall not be on a day-to-day regularly
scheduled operational basis and shall be provided only when Employee is
reasonably available and willing. Employer shall make available to Employee such
office space and equipment as are reasonably necessary for Employee to carry out
the obligations under this Agreement and shall reimburse Employee for any
extraordinary expenses incurred in carrying out the obligations hereunder.

Effective as of Employee's Retirement Date, Employee and
Employer agree that Employee shall be, under the terms of this Agreement, an
independent contractor, and Employee agrees that his rights and privileges and
his obligations are as provided in this Agreement as to matters covered herein.

17
<PAGE>

If Employee should die during said ten (10) year period,
payments under this Paragraph shall terminate. Future payments, if any, to
Employee's designated beneficiary or Employee's Estate shall be made in
accordance with the provisions of Paragraph 5 of this Agreement.

4. NONCOMPETITION PAYMENTS. In the event Employee retires from
employment on Employee's Retirement Date, Employee shall be paid by Employer the
sum of Three Thousand Nine Hundred Six and 26/100 Dollars ($3,906.26) per month,
beginning not later than two (2) months after Employee's Retirement Date, for a
period of ten (10) years following Employee's Retirement Date or until death,
whichever first occurs. Such monthly payments shall be paid for and in
consideration of Employee's Covenant Not To Compete as provided herein.
Noncompetition Payments hereunder shall be payable each month without deductions
and Employee agrees to be solely responsible for the payment of all income or
other taxes or assessments, if any, applicable on said payments.

For and in consideration of said monthly Noncompetition
Payments to Employee, Employee agrees that he will not become an officer or
employee of, provide any consultation to nor participate in any manner with any
other entity of any type or description involved in any major element of
business which Employer is performing at Employee's Retirement Date nor will
Employee perform or seek to perform any consultation or other type of work or
service with any other firm, person or entity, directly or indirectly, in any
such business which competes with Employer, whether done directly or indirectly,
in ownership, consultation, employment or otherwise. Employee agrees not to
reveal to outside sources, without the consent of Employer, any matters, the
revealing of which could, in any manner, adversely affect or disclose Employer's
business or any part thereof, unless required by law to do so. This Covenant Not
To Compete by Employee is limited to the geographic area of South Carolina,
shall exist for and during the term of all payments to be made under this
Covenant Not To Compete, whether made directly by Employer or as otherwise
provided herein, and shall not prevent Employee from purchasing or acquiring, as
an investor only, a financial interest of less than five percent (5%) in a
business or other entity which is in competition with Employer.

Employee acknowledges that the remedy at law for breach of
Employee's Covenant Not To Compete will be inadequate and that Employer shall be
entitled to injunctive relief as to any violation thereof; however, nothing
herein shall be construed as prohibiting Employer from pursuing any other
remedies available to it, in addition to injunctive relief, whether at law or in
equity, including the recovery of damages. In the event Employee shall breach
any condition of Employee's Covenant Not To Compete, then Employee's right to
any of the payments becoming due under Paragraphs 3 and 4 of this Agreement
after the date of such breach shall be forever forfeited and the right of
Employee's designated beneficiary or Employee's Estate to any payments under
this Agreement shall likewise be forever forfeited. This forfeiture is in
addition to and not in lieu of any of the above-described remedies of Employer
and shall be in addition to any injunctive or other relief as described herein.

18
<PAGE>

Employee further acknowledges that any breach of Employee's Covenant Not To
Compete shall be deemed a material breach of this Agreement.

5. CONTINUATION OF PAYMENTS. Upon Employee's death during said
ten (10) year period of payments hereunder, the sum of Five Thousand Two Hundred
Eight and 34/100 Dollars ($5,208.34) per month shall be paid to Employee's
designated beneficiary or Employee's Estate, as applicable, beginning the first
calendar month following the date of Employee's death and continuing thereafter
until the expiration of said ten (10) year period. Once the Consultation and/or
Noncompetition Payments are begun, whether paid by Employer or as otherwise
provided herein, the maximum payment period under this Agreement is ten (10)
years. Payments hereunder shall be payable each month without deductions and the
recipient shall be solely responsible for all income and other taxes and
assessments applicable on said payments.

6. FORFEITURE OF BENEFITS. This Agreement is subject to
termination by Employer at any time and without stated cause. In the event
Employer shall terminate this Agreement, Employee shall forfeit all rights to
receive any payment provided for herein. Likewise, in the event Employee does
not retire from employment on Employee's Retirement Date or Employee's
employment is terminated, either voluntarily or involuntarily, for reasons other
than death or retirement, Employee shall forfeit all rights to receive any
payment provided for herein. Employee acknowledges and agrees that any benefit
provided for herein is merely a contractual benefit and that nothing contained
herein shall be construed as conferring upon Employee any vested benefits or any
vested rights to receive any payment provided for herein and that any and all
payments provided for herein shall be subject to a substantial risk of
forfeiture until such time as said payments are actually made by Employer.
Employee also acknowledges that the contractual benefit provided for herein is
specifically conditioned upon Employee's retirement from employment on
Employee's Retirement Date.

7. CLAIMS PROCEDURE. If any benefits become payable under this
Agreement, Employee (or Employee's beneficiary in the case of Employee's death)
shall file a claim for benefits by notifying Employer orally or in writing. If
the claim is wholly or partially denied, Employer shall provide a written notice
within ninety (90) days specifying the reasons for the denial, any additional
material or information necessary to receive benefits, and the steps to be taken
if a review of the denial is desired.

If a claim is denied and a review is desired, Employee (or
Employee's beneficiary in the case of Employee's death) shall notify Employer in
writing within sixty (60) days. In requesting a review, Employee or Employee's
beneficiary may submit any written issues and comments he or she feels are
appropriate. Employer shall then review the claim and provide a written decision
within sixty (60) days. This decision shall state the specific

19
<PAGE>

reasons for the decision and shall include references to specific provisions on
which the decision is based.

8. ASSIGNMENT OF RIGHTS. Neither Employee nor any designated
beneficiary shall have any right to sell, assign, transfer or otherwise convey
the right to receive any payment hereunder.

9. PAYMENTS AND FUNDING. Any payments under this Agreement shall
be independent of, and in addition to, those under any other Plan, program or
agreement which may be in effect between the parties hereto, or any other
compensation payable to Employee or Employee's designee by Employer. This
Agreement shall not be construed as a contract of employment nor does it
restrict the right of Employer to discharge Employee at will or the right of
Employee to terminate employment at will.

Employer may, in its sole discretion, purchase an insurance
policy on the life of Employee to fund or assist in the funding of this
Agreement. Employee agrees to promptly supply to Employer and its selected or
prospective insurance carrier, upon request, any and all information requested,
in order to enable the insurance carrier to evaluate the risks involved in
providing the insurance requested by Employer. Any and all rights to any and all
benefits under such insurance policy on the life of Employee shall be solely the
property of Employer and all proceeds of such policy shall be payable by the
insurer solely to Employer, as owner of such policy. Employee specifically
waives any rights in any insurance policy on Employee's life owned by Employer
pursuant to this Agreement. Such policy shall not serve in any way as security
to Employee for Employer's performance under this Agreement. The rights accruing
to Employee or any designee hereunder shall be solely those of an unsecured
creditor of Employer and shall be subordinate to the rights of the depositors of
Employer.

Employer may, in its sole discretion, discharge its
liabilities under this Agreement to Employee, Employee's designated beneficiary
or Employee's Estate at any time by the purchase of an annuity from a reputable
insurance or similar company authorized to do, and doing, business in South
Carolina and the assignment of the rights under said annuity to the benefit of
Employee, Employee's designated beneficiary or Employee's Estate. If this option
is exercised by Employer, all rights accruing to Employee, Employee's designated
beneficiary or Employee's Estate hereunder shall be governed solely by the
annuity contract and any election made under said annuity contract; and Employer
shall be fully discharged from any further liabilities to Employee, Employee's
designated beneficiary or Employee's Estate under this Agreement.

Employer may, in its sole discretion, discharge its
liabilities under this Agreement to Employee, Employee's designated beneficiary
or Employee's Estate at any time by determining the present value of the
payments due hereunder, said amount to be determined by the use of the U.S.
Government bond rate for the nearest year applicable to the time of the payments
due hereunder for the present value computation and once determined, by payment
of said amount in a lump sum to Employee, Employee's designated beneficiary or
Employee's Estate, as applicable.

20
<PAGE>

10.SUICIDE. In the event Employee commits suicide within two (2)
years of the execution of this Agreement, all payments provided for herein to be
paid to Employee's designated beneficiary or Employee's Estate shall be
forfeited.

11.BINDING EFFECT. This Agreement shall be binding upon Employee,
his heirs, personal representatives and assigns and upon Employer, its
successors and assigns.

12.AMENDMENT OF AGREEMENT. This Agreement may not be altered,
amended or revoked except by a written agreement signed by Employer and
Employee.

13.INTERPRETATION. Where appropriate in this Agreement, words used
in the singular shall include the plural and words used in the masculine shall
include the feminine.

14.INVALID PROVISION. The invalidity or unenforceability of any
particular provision of this Agreement shall not affect the other provisions
hereof, and this Agreement shall be construed in all respects as if such invalid
or unenforceable provision were not contained herein.

15.GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with and governed by the laws of the State of South Carolina.

IN TESTIMONY WHEREOF, Employer has caused this Agreement to be
executed in its corporate name by its President, attested by its
Secretary/Assistant Secretary and its corporate seal to be hereto affixed, all
by the authority of its Board of Directors duly given, and Employee has hereunto
set his hand and adopted as his seal the typewritten word "SEAL" appearing
beside his name, as of the day and year first above written.

FIRST-CITIZENS BANK AND TRUST COMPANY
OF SOUTH CAROLINA

By: /s/ Jim B. Apple
-----------------------
Jim B. Apple, President

ATTEST:

/s/ Carol W. Stevens
- --------------------
Assistant Secretary

/s/ E. Hite Miller, Sr. (SEAL)
-----------------------
E. Hite Miller, Sr.

EXHIBIT 10.4

EMPLOYEE DEATH BENEFIT AND POST-RETIREMENT NONCOMPETITION
AND CONSULTATION AGREEMENT

THIS AGREEMENT, made and entered into and effective as of the
31st day of December, 1998, by and between FIRST-CITIZENS BANK AND TRUST COMPANY
OF SOUTH CAROLINA, a South Carolina banking corporation with its principal
office in Columbia, South Carolina (hereinafter referred to as "Employer"); and
JIM B. APPLE, an employee of Employer, who is currently serving as President and
Chief Executive Officer (hereinafter referred to as "Employee");

W I T N E S S E T H:

WHEREAS, Employer desires to limit Employee's availability to
other employers or entities which are in competition with Employer following
Employee's retirement from employment with Employer; and,

NOW, THEREFORE, for and in consideration of the mutual promises
and undertakings herein set forth, the parties hereto do agree as follows:

1. RETIREMENT DATE. The term "Retirement Date," as used herein,
shall be defined for purposes of this Agreement as the last day of the calendar
month in which Employee attains the age of sixty-five (65) or as such date prior
or subsequent thereto as shall be agreed upon between Employer and Employee.

Employer and Employee hereby acknowledge that compulsory
retirement is not enforceable except as provided by law. Employer and Employee
further agree that no provision herein shall be construed as requiring
Employee's retirement except as may now or hereafter be permitted by law;
however, Employee acknowledges Employer's continuing policy, in an effort to
provide opportunities and continuity, to encourage retirement at age

22
<PAGE>

sixty-five (65) and to require retirement at age sixty-five (65) where
permissible by law.

2. DEATH BENEFITS. In the event Employee dies while employed by
Employer prior to Employee's Retirement Date, Employer will pay the sum of
Sixty-Two Thousand Five Hundred and No/100 Dollars ($62,500.00) per year,
payable in monthly installments of Five Thousand Two Hundred Eight and 34/100
Dollars ($5,208.34), for a period of ten (10) years, to such individual or
individuals as Employee shall have designated in writing filed with Employer or,
in the absence of such designation, to the Estate of Employee. The first payment
shall be made not later than two (2) months following Employee's death. Payments
hereunder shall be payable each month without deductions and the recipient shall
be solely responsible for the payment of all income and other taxes and
assessments applicable on said payments.

23
<PAGE>

24
<PAGE>

forfeiture is in addition to and not in lieu of any of the above-described
remedies of Employer and shall be in addition to any injunctive or other relief
as described herein. Employee further acknowledges that any breach of Employee's
Covenant Not To Compete shall be deemed a material breach of this Agreement.

25
<PAGE>

8. ASSIGNMENT OF RIGHTS. Neither Employee nor any designated
beneficiary shall have any right to sell, assign, transfer or otherwise convey
the right to receive any payment hereunder.

26
<PAGE>

liabilities to Employee, Employee's designated beneficiary or Employee's Estate
under this Agreement.

11.BINDING EFFECT. This Agreement shall be binding upon Employee,
his heirs, personal representatives and assigns and upon Employer, its
successors and assigns.

12.AMENDMENT OF AGREEMENT. This Agreement may not be altered,
amended or revoked except by a written agreement signed by Employer and
Employee.

13.INTERPRETATION. Where appropriate in this Agreement, words used
in the singular shall include the plural and words used in the masculine shall
include the feminine.

15.GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with and governed by the laws of the State of South Carolina.

27
<PAGE>

IN TESTIMONY WHEREOF, Employer has caused this Agreement to be
executed in its corporate name by its Chairman, attested by its
Secretary/Assistant Secretary and its corporate seal to be hereto affixed, all
by the authority of its Board of Directors duly given, and Employee has hereunto
set his hand and adopted as his seal the typewritten word "SEAL" appearing
beside his name, as of the day and year first above written.

FIRST-CITIZENS BANK AND TRUST COMPANY
OF SOUTH CAROLINA

By: /s/ E. Hite Miller, Sr.
------------------------------
E. Hite Miller, Sr., Chairman

ATTEST:

/s/ Carol W. Stevens
- --------------------
Assistant Secretary

/s/ Jim B. Apple (SEAL)
---------------------
Jim B. Apple

EXHIBIT 10.5

EMPLOYEE DEATH BENEFIT AND POST-RETIREMENT NONCOMPETITION
AND CONSULTATION AGREEMENT

THIS AGREEMENT, made and entered into and effective as of the
31st day of December, 1998, by and between FIRST-CITIZENS BANK AND TRUST COMPANY
OF SOUTH CAROLINA, a South Carolina banking corporation with its principal
office in Columbia, South Carolina (hereinafter referred to as "Employer"); and
JAY C. CASE, an employee of Employer, who is currently serving as Executive Vice
President and Chief Financial Officer (hereinafter referred to as "Employee");

W I T N E S S E T H:

WHEREAS, Employer desires to limit Employee's availability to
other employers or entities which are in competition with Employer following
Employee's retirement from employment with Employer; and,

NOW, THEREFORE, for and in consideration of the mutual promises
and undertakings herein set forth, the parties hereto do agree as follows:

1. RETIREMENT DATE. The term "Retirement Date," as used herein,
shall be defined for purposes of this Agreement as the last day of the calendar
month in which Employee attains the age of sixty-five (65) or as such date prior
or subsequent thereto as shall be agreed upon between Employer and Employee.

29
<PAGE>

law; however, Employee acknowledges Employer's continuing policy, in an effort
to provide opportunities and continuity, to encourage retirement at age
sixty-five (65) and to require retirement at age sixty-five (65) where
permissible by law.

2. DEATH BENEFITS. In the event Employee dies while employed by
Employer prior to Employee's Retirement Date, Employer will pay the sum of
Forty-Six Thousand Seven Hundred Eighty-Five and 75/100 Dollars ($46,785.75) per
year, payable in monthly installments of Three Thousand Eight Hundred
Ninety-Eight and 81/100 Dollars ($3,898.81), for a period of ten (10) years, to
such individual or individuals as Employee shall have designated in writing
filed with Employer or, in the absence of such designation, to the Estate of
Employee. The first payment shall be made not later than two (2) months
following Employee's death. Payments hereunder shall be payable each month
without deductions and the recipient shall be solely responsible for the payment
of all income and other taxes and assessments applicable on said payments.

3. CONSULTATION PAYMENTS. In the event Employee retires from
employment on Employee's Retirement Date, Employee shall be paid by Employer the
sum of Nine Hundred Seventy-Four and 70/100 Dollars ($974.70) per month,
beginning not later than two (2) months after Employee's Retirement Date, for a
period of ten (10) years following Employee's Retirement Date or until death,
whichever first occurs. Such monthly payments shall be paid for and in
consideration of Employee's Consultation Services, as provided herein; such sum
to be payable to Employee whether or not Employee's Consultation Services have
been utilized by Employer. Consultation Payments hereunder shall be payable each
month without deductions and Employee agrees to be solely responsible for the
payment of all income and other taxes out of said funds and all Social Security,
self-employment and any other taxes or assessments, if any, applicable on said
compensation.

Effective as of Employee's Retirement Date, Employee and
Employer agree that Employee shall be, under the terms of this Agreement, an

30
<PAGE>

independent contractor, and Employee agrees that his rights and privileges and
his obligations are as provided in this Agreement as to matters covered herein.

4. NONCOMPETITION PAYMENTS. In the event Employee retires from
employment on Employee's Retirement Date, Employee shall be paid by Employer the
sum of Two Thousand Nine Hundred Twenty-Four and 11/100 Dollars ($2,924.11) per
month, beginning not later than two (2) months after Employee's Retirement Date,
for a period of ten (10) years following Employee's Retirement Date or until
death, whichever first occurs. Such monthly payments shall be paid for and in
consideration of Employee's Covenant Not To Compete as provided herein.
Noncompetition Payments hereunder shall be payable each month without deductions
and Employee agrees to be solely responsible for the payment of all income or
other taxes or assessments, if any, applicable on said payments.

31
<PAGE>

right to any of the payments becoming due under Paragraphs 3 and 4 of this
Agreement after the date of such breach shall be forever forfeited and the right
of Employee's designated beneficiary or Employee's Estate to any payments under
this Agreement shall likewise be forever forfeited. This forfeiture is in
addition to and not in lieu of any of the above-described remedies of Employer
and shall be in addition to any injunctive or other relief as described herein.
Employee further acknowledges that any breach of Employee's Covenant Not To
Compete shall be deemed a material breach of this Agreement.

5. CONTINUATION OF PAYMENTS. Upon Employee's death during said
ten (10) year period of payments hereunder, the sum of Three Thousand Eight
Hundred Ninety-Eight and 81/100 Dollars ($3,898.81) per month shall be paid to
Employee's designated beneficiary or Employee's Estate, as applicable, beginning
the first calendar month following the date of Employee's death and continuing
thereafter until the expiration of said ten (10) year period. Once the
Consultation and/or Noncompetition Payments are begun, whether paid by Employer
or as otherwise provided herein, the maximum payment period under this Agreement
is ten (10) years. Payments hereunder shall be payable each month without
deductions and the recipient shall be solely responsible for all income and
other taxes and assessments applicable on said payments.

32
<PAGE>

written notice within ninety (90) days specifying the reasons for the denial,
any additional material or information necessary to receive benefits, and the
steps to be taken if a review of the denial is desired.

8. ASSIGNMENT OF RIGHTS. Neither Employee nor any designated
beneficiary shall have any right to sell, assign, transfer or otherwise convey
the right to receive any payment hereunder.

33
<PAGE>

shall be governed solely by the annuity contract and any election made under
said annuity contract; and Employer shall be fully discharged from any further
liabilities to Employee, Employee's designated beneficiary or Employee's Estate
under this Agreement.

11.BINDING EFFECT. This Agreement shall be binding upon Employee,
his heirs, personal representatives and assigns and upon Employer, its
successors and assigns.

12.AMENDMENT OF AGREEMENT. This Agreement may not be altered,
amended or revoked except by a written agreement signed by Employer and
Employee.

13.INTERPRETATION. Where appropriate in this Agreement, words used
in the singular shall include the plural and words used in the masculine shall
include the feminine.

15.GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with and governed by the laws of the State of South Carolina.

34
<PAGE>

FIRST-CITIZENS BANK AND TRUST COMPANY
OF SOUTH CAROLINA

By: /s/ Jim B. Apple
------------------------
Jim B. Apple, President

ATTEST:

/s/ Carol W. Stevens
- --------------------
Assistant Secretary

/s/ Jay C. Case (SEAL)
---------------------
Jay C. Case

EXHIBIT 10.6

EMPLOYEE DEATH BENEFIT AND POST-RETIREMENT NONCOMPETITION
AND CONSULTATION AGREEMENT

THIS AGREEMENT, made and entered into and effective as of the
31st day of December, 1998, by and between FIRST-CITIZENS BANK AND TRUST COMPANY
OF SOUTH CAROLINA, a South Carolina banking corporation with its principal
office in Columbia, South Carolina (hereinafter referred to as "Employer"); and
CHARLES S. McLAURIN, III, an employee of Employer, who is currently serving as
Executive Vice President (hereinafter referred to as "Employee");

W I T N E S S E T H:

WHEREAS, Employer desires to limit Employee's availability to
other employers or entities which are in competition with Employer following
Employee's retirement from employment with Employer; and,

NOW, THEREFORE, for and in consideration of the mutual promises
and undertakings herein set forth, the parties hereto do agree as follows:

1. RETIREMENT DATE. The term "Retirement Date," as used herein,
shall be defined for purposes of this Agreement as the last day of the calendar
month in which Employee attains the age of sixty-five (65) or as such date prior
or subsequent thereto as shall be agreed upon between Employer and Employee.

36
<PAGE>

2. DEATH BENEFITS. In the event Employee dies while employed by
Employer prior to Employee's Retirement Date, Employer will pay the sum of
Thirty-Seven Thousand One Hundred Twenty-Two and 48/100 Dollars ($37,122.48) per
year, payable in monthly installments of Three Thousand Ninety-Three and 54/100
Dollars ($3,093.54), for a period of ten (10) years, to such individual or
individuals as Employee shall have designated in writing filed with Employer or,
in the absence of such designation, to the Estate of Employee. The first payment
shall be made not later than two (2) months following Employee's death. Payments
hereunder shall be payable each month without deductions and the recipient shall
be solely responsible for the payment of all income and other taxes and
assessments applicable on said payments.

3. CONSULTATION PAYMENTS. In the event Employee retires from
employment on Employee's Retirement Date, Employee shall be paid by Employer the
sum of Seven Hundred Seventy-Three and 39/100 Dollars ($773.39) per month,
beginning not later than two (2) months after Employee's Retirement Date, for a
period of ten (10) years following Employee's Retirement Date or until death,
whichever first occurs. Such monthly payments shall be paid for and in
consideration of Employee's Consultation Services, as provided herein; such sum
to be payable to Employee whether or not Employee's Consultation Services have
been utilized by Employer. Consultation Payments hereunder shall be payable each
month without deductions and Employee agrees to be solely responsible for the
payment of all income and other taxes out of said funds and all Social Security,
self-employment and any other taxes or assessments, if any, applicable on said
compensation.

4. NONCOMPETITION PAYMENTS. In the event Employee retires from
employment on Employee's Retirement Date, Employee shall be paid by Employer the
sum of Two Thousand Three Hundred Twenty and 15/100 Dollars ($2,320.15) per
month, beginning not later than two (2) months after Employee's Retirement Date,
for a period of ten (10) years following Employee's Retirement Date or until
death, whichever first occurs. Such monthly payments shall be paid for and in
consideration of Employee's Covenant Not To Compete as provided herein.
Noncompetition Payments hereunder shall be payable each month without

37
<PAGE>

deductions and Employee agrees to be solely responsible for the payment of all
income or other taxes or assessments, if any, applicable on said payments.

5. CONTINUATION OF PAYMENTS. Upon Employee's death during said
ten (10) year period of payments hereunder, the sum of Three Thousand
Ninety-Three and 54/100 Dollars ($3,093.54) per month shall be paid to
Employee's designated beneficiary or Employee's Estate, as applicable, beginning
the first calendar month following the date of Employee's death and continuing
thereafter until the expiration of said ten (10) year period. Once the
Consultation and/or Noncompetition Payments are begun, whether paid by Employer
or as otherwise provided herein, the maximum payment period under this Agreement
is ten (10) years. Payments hereunder shall be payable each month without
deductions and the recipient shall be solely responsible for all income and
other taxes and assessments applicable on said payments.

6. FORFEITURE OF BENEFITS. This Agreement is subject to
termination by Employer at any time and without stated cause. In the event
Employer shall terminate this Agreement, Employee shall

38
<PAGE>

forfeit all rights to receive any payment provided for herein. Likewise, in the
event Employee does not retire from employment on Employee's Retirement Date or
Employee's employment is terminated, either voluntarily or involuntarily, for
reasons other than death or retirement, Employee shall forfeit all rights to
receive any payment provided for herein. Employee acknowledges and agrees that
any benefit provided for herein is merely a contractual benefit and that nothing
contained herein shall be construed as conferring upon Employee any vested
benefits or any vested rights to receive any payment provided for herein and
that any and all payments provided for herein shall be subject to a substantial
risk of forfeiture until such time as said payments are actually made by
Employer. Employee also acknowledges that the contractual benefit provided for
herein is specifically conditioned upon Employee's retirement from employment on
Employee's Retirement Date.

8. ASSIGNMENT OF RIGHTS. Neither Employee nor any designated
beneficiary shall have any right to sell, assign, transfer or otherwise convey
the right to receive any payment hereunder.

39
<PAGE>

11.BINDING EFFECT. This Agreement shall be binding upon Employee,
his heirs, personal representatives and assigns and upon Employer, its
successors and assigns.

12.AMENDMENT OF AGREEMENT. This Agreement may not be altered,
amended or revoked except by a written agreement signed by Employer and
Employee.

13.INTERPRETATION. Where appropriate in this Agreement, words used
in the singular shall include the plural and words used in the masculine shall
include the feminine.

15.GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with and governed by the laws of the State of South Carolina.

FIRST-CITIZENS BANK AND TRUST COMPANY
OF SOUTH CAROLINA

By: /s/ Jim B. Apple
-----------------------
Jim B. Apple, President

ATTEST:

40
<PAGE>

/s/ Carol W. Stevens
- --------------------
Assistant Secretary

/s/ Charles S. McLaurin, III (SEAL)
----------------------------------
Charles S. McLaurin, III

EXHIBIT 10.7

EMPLOYEE DEATH BENEFIT AND POST-RETIREMENT NONCOMPETITION
AND CONSULTATION AGREEMENT

THIS AGREEMENT, made and entered into and effective as of the
31st day of December, 1998, by and between FIRST-CITIZENS BANK AND TRUST COMPANY
OF SOUTH CAROLINA, a South Carolina banking corporation with its principal
office in Columbia, South Carolina (hereinafter referred to as "Employer"); and
CHARLES D. COOK, an employee of Employer, who is currently serving as Senior
Vice President (hereinafter referred to as "Employee");

W I T N E S S E T H:

WHEREAS, Employer desires to limit Employee's availability to
other employers or entities which are in competition with Employer following
Employee's retirement from employment with Employer; and,

NOW, THEREFORE, for and in consideration of the mutual promises
and undertakings herein set forth, the parties hereto do agree as follows:

1. RETIREMENT DATE. The term "Retirement Date," as used herein,
shall be defined for purposes of this Agreement as the last day of the calendar
month in which Employee attains the age of sixty-five (65) or as such date prior
or subsequent thereto as shall be agreed upon between Employer and Employee.

42
<PAGE>

to provide opportunities and continuity, to encourage retirement at age
sixty-five (65) and to require retirement at age sixty-five (65) where
permissible by law.

2. DEATH BENEFITS. In the event Employee dies while employed by
Employer prior to Employee's Retirement Date, Employer will pay the sum of
Twenty-Nine Thousand Seven Hundred Ninety-Four and 75/100 Dollars ($29,794.75)
per year, payable in monthly installments of Two Thousand Four Hundred
Eighty-Two and 90/100 Dollars ($2,482.90), for a period of ten (10) years, to
such individual or individuals as Employee shall have designated in writing
filed with Employer or, in the absence of such designation, to the Estate of
Employee. The first payment shall be made not later than two (2) months
following Employee's death. Payments hereunder shall be payable each month
without deductions and the recipient shall be solely responsible for the payment
of all income and other taxes and assessments applicable on said payments.

3. CONSULTATION PAYMENTS. In the event Employee retires from
employment on Employee's Retirement Date, Employee shall be paid by Employer the
sum of Six Hundred Twenty and 72/100 Dollars ($620.72) per month, beginning not
later than two (2) months after Employee's Retirement Date, for a period of ten
(10) years following Employee's Retirement Date or until death, whichever first
occurs. Such monthly payments shall be paid for and in consideration of
Employee's Consultation Services, as provided herein; such sum to be payable to
Employee whether or not Employee's Consultation Services have been utilized by
Employer. Consultation Payments hereunder shall be payable each month without
deductions and Employee agrees to be solely responsible for the payment of all
income and other taxes out of said funds and all Social Security,
self-employment and any other taxes or assessments, if any, applicable on said
compensation.

43
<PAGE>

his obligations are as provided in this Agreement as to matters covered herein.

4. NONCOMPETITION PAYMENTS. In the event Employee retires from
employment on Employee's Retirement Date, Employee shall be paid by Employer the
sum of One Thousand Eight Hundred Sixty-Two and 18/100 Dollars ($1,862.18) per
month, beginning not later than two (2) months after Employee's Retirement Date,
for a period of ten (10) years following Employee's Retirement Date or until
death, whichever first occurs. Such monthly payments shall be paid for and in
consideration of Employee's Covenant Not To Compete as provided herein.
Noncompetition Payments hereunder shall be payable each month without deductions
and Employee agrees to be solely responsible for the payment of all income or
other taxes or assessments, if any, applicable on said payments.

44
<PAGE>

right of Employee's designated beneficiary or Employee's Estate to any payments
under this Agreement shall likewise be forever forfeited. This forfeiture is in
addition to and not in lieu of any of the above-described remedies of Employer
and shall be in addition to any injunctive or other relief as described herein.
Employee further acknowledges that any breach of Employee's Covenant Not To
Compete shall be deemed a material breach of this Agreement.

5. CONTINUATION OF PAYMENTS. Upon Employee's death during said
ten (10) year period of payments hereunder, the sum of Two Thousand Four Hundred
Eighty-Two and 90/100 Dollars ($2,482.90) per month shall be paid to Employee's
designated beneficiary or Employee's Estate, as applicable, beginning the first
calendar month following the date of Employee's death and continuing thereafter
until the expiration of said ten (10) year period. Once the Consultation and/or
Noncompetition Payments are begun, whether paid by Employer or as otherwise
provided herein, the maximum payment period under this Agreement is ten (10)
years. Payments hereunder shall be payable each month without deductions and the
recipient shall be solely responsible for all income and other taxes and
assessments applicable on said payments.

45
<PAGE>

any additional material or information necessary to receive benefits, and the
steps to be taken if a review of the denial is desired.

8. ASSIGNMENT OF RIGHTS. Neither Employee nor any designated
beneficiary shall have any right to sell, assign, transfer or otherwise convey
the right to receive any payment hereunder.

46
<PAGE>

said annuity contract; and Employer shall be fully discharged from any further
liabilities to Employee, Employee's designated beneficiary or Employee's Estate
under this Agreement.

11.BINDING EFFECT. This Agreement shall be binding upon Employee,
his heirs, personal representatives and assigns and upon Employer, its
successors and assigns.

12.AMENDMENT OF AGREEMENT. This Agreement may not be altered,
amended or revoked except by a written agreement signed by Employer and
Employee.

13.INTERPRETATION. Where appropriate in this Agreement, words used
in the singular shall include the plural and words used in the masculine shall
include the feminine.

15.GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with and governed by the laws of the State of South Carolina.

47
<PAGE>

FIRST-CITIZENS BANK AND TRUST COMPANY
OF SOUTH CAROLINA

By: /s/ Jim B. Apple
-----------------------
Jim B. Apple, President

ATTEST:

/s/ Carol W. Stevens
- --------------------
Assistant Secretary

/s/ Charles D. Cook (SEAL)
-------------------------
Charles D. Cook

FIRST CITIZENS BANCORPORATION OF SOUTH CAROLINA, INC.

NATURE OF BUSINESS

First Citizens Bancorporation of South Carolina, Inc. ("Bancorporation"),
is a one-bank holding company headquartered in Columbia, South Carolina, with
assets of $2.48 billion as of December 31, 1998. Its primary subsidiary is
First-Citizens Bank and Trust Company of South Carolina ("Bank"), which
provides a broad range of banking services through 132 offices in 88
communities throughout the state. The Bank's subsidiary is Wateree Life
Insurance Company of South Carolina, a credit life insurance company. "First
Citizens Bank" is used in marketing the Bank.

First Citizens Bancorporation of South Carolina, Inc.
P. O. Box 29
1230 Main Street
Columbia, South Carolina 29202

ANNUAL MEETING

The Annual Meeting of Stockholders of First Citizens Bancorporation of
South Carolina, Inc. will be held at 2:30 p.m. on Wednesday, April 28, 1999 on
the third floor of the First Citizens Banking Center, at 1314 Park Street,
Columbia, South Carolina.

CONTENTS

<TABLE>
<S> <C>
Market and Dividend Information Regarding Common and Preferred Stock IFC
Financial Highlights ................................................ 1
To Our Stockholders ................................................. 2
Management's Discussion and Analysis ................................ 3
Report of Management ................................................ 20
Report of Independent Accountants ................................... 20
Consolidated Financial Statements ................................... 21
Official Organization Section ....................................... 40
</TABLE>

MARKET AND DIVIDEND INFORMATION
REGARDING COMMON AND PREFERRED STOCK

There is a limited over-the-counter market for Bancorporation's voting
common stock. The stock is not listed on the National Association of Securities
Dealers Automated Quotation System ("NASDAQ"). Quotations are published in
South Carolina newspapers circulated in Bancorporation's major metropolitan
markets and may be obtained through securities brokers having offices in South
Carolina. Local broker-dealers, Interstate/Johnson Lane and Scott &
Stringfellow, effect agency transactions in Bancorporation's voting common
stock from time to time.

There is no trading market for any class of Bancorporation's preferred
stock or for its non-voting common stock. All trading activity for those
classes of Bancorporation's stock is in privately negotiated transactions.

The following ranges of high and low bid prices for Bancorporation's
voting common stock were supplied by one of the broker-dealers making a market
in such security. The prices represent quotations between broker-dealers, which
do not include markups, markdowns or commissions, and may not represent actual
transactions.
<TABLE>
<CAPTION>
1998 1997
------------------------- -------------------------
High Low High Low
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
1st quarter ......... $ 350.00 $ 290.00 $ 201.00 $ 180.00
2nd quarter ......... 375.00 350.00 222.00 201.00
3rd quarter ......... 380.00 375.00 246.00 222.00
4th quarter ......... 380.00 350.00 335.00 246.00
</TABLE>

The approximate numbers of record holders of Bancorporation's voting
common stock and non-voting common stock as of December 31, 1998 were 1,082 and
4, respectively.

Holders of the voting and non-voting common stock of Bancorporation are
entitled to such dividends as may be declared from time to time by the Board of
Directors from funds legally available. However, Bancorporation has adopted a
policy of paying no cash dividends on its voting and non-voting common stock.
This policy reflects the desire of the Board of Directors to maintain
Bancorporation's risk-based capital ratios through the retention of earnings.
Certain regulatory requirements restrict the payment of dividends and
extensions of credit from banking subsidiaries to bank holding companies. As
Bancorporation has a policy of paying no cash dividends on its common stock,
these restrictions have not historically affected Bancorporation's ability to
meet its obligations. Additional restrictions relating to capital requirements
and dividends are discussed on page 14 of "Management's Discussion and
Analysis" and in Note 12 of "Notes to Consolidated Financial Statements."

THIS ANNUAL REPORT HAS NOT BEEN REVIEWED OR CONFIRMED FOR ACCURACY OR RELEVANCE

BY THE FEDERAL DEPOSIT INSURANCE CORPORATION

<PAGE>

FIRST CITIZENS BANCORPORATION OF SOUTH CAROLINA, INC.

FINANCIAL HIGHLIGHTS
(Dollars in thousands - except per share data)
<TABLE>
<CAPTION>
Percent
1998 1997 Change
-------------- -------------- ----------
<S> <C> <C> <C>
For The Year:
Net income $ 23,618 $ 21,770 8.49
Net income per common share 25.30 23.24 8.86
Preferred dividends paid 171 171 -
Financial Ratios:
Net interest margin 4.36% 4.54%
Return on average assets 1.01 1.05
Return on average stockholders' equity 13.94 15.02
Reserve for loan losses to year-end loans 1.80 1.83
Reserve for loan losses to year-end
nonperforming loans (coverage ratio) 1,259.16 956.98
Net loan losses to average loans .14 .12
Equity to assets at year-end 7.01 7.04
At Year-end:
Assets $2,483,768 $2,250,477 10.37
Earning assets 2,260,897 2,036,446 11.02
Loans 1,573,069 1,428,437 10.13
Core deposits 1,898,545 1,745,084 8.79
Deposits 2,037,487 1,879,420 8.41
Stockholders' equity 174,175 158,418 9.95
Averages:
Assets $2,332,634 $2,082,086 12.03
Earning assets 2,148,348 1,918,921 11.96
Investment securities 599,704 538,086 11.45
Loans 1,495,930 1,343,256 11.37
Deposits 1,909,183 1,751,791 8.98
Interest-bearing liabilities 1,815,346 1,627,301 11.56
Stockholders' equity 169,422 144,961 16.87
Risk-Based Capital Ratios:
Tier 1 13.01% 9.13%
Total 14.27 10.49
Number of (At Year-end):
Common shares outstanding 921,684 929,222 (0.81)
Weighted average common shares outstanding 926,744 929,222 (0.27)
Preferred shares outstanding 68,132 68,132 -
Banking offices 132 130 1.54
ATMs 127 118 7.63
Full-time equivalent employees 1,147 1,074 6.80
Book Value per Common Share: $ 185.41 $ 166.95 11.06
</TABLE>

1
<PAGE>

FIRST CITIZENS BANCORPORATION OF SOUTH CAROLINA, INC.

TO OUR STOCKHOLDERS:

We are pleased to report that First Citizens Bank continued to enjoy a
period of market expansion and earnings growth during 1998.

While First Citizens Bank entered four additional markets during 1998 -
Tega Cay in York County, Hanahan and Hollywood in Charleston County and
Prosperity in Newberry County - our pattern of consolidating branches and
relocating into upgraded facilities also continued. From Boiling Springs in
Spartanburg County to our new branch (featured on this year's cover) in
Lancaster, our new buildings reflect our ongoing commitment to our customers
and communities.

Net income for 1998 was $23.6 million, up 8.49% from $21.8 million in
1997. This increase primarily was due to a $229.4 million increase in average
earning assets for 1998, as well as to our continued emphasis upon maximizing
noninterest income and controlling noninterest expense.

Deposits increased by 8.41% to $2.037 billion, while loans grew by 10.13%
to $1.573 billion. Our loan growth has been part of a concerted effort on the
part of our lenders to meet customer borrowing needs while maintaining First
Citizens Bank's traditionally high credit standards. Net chargeoffs as a
percentage of loans were .14%, which is comparable to last year's favorable
percentage of .12%.

We continued our thrust into the professional and executive banking market
in 1998 with additional hires in Charleston, Greenville and Columbia. In
addition, we bolstered our capability to provide corporate and municipal
treasury management services with additional staffing and new products.

Another major initiative we began in 1998 involved the development of a
bankwide customer service awareness and enhancement initiative known internally
as CUSTOMERS FIRST. This program includes a mechanism for regular feedback to
our employees as they offer and provide services to customers and prospects. We
also continued our sales culture development in 1998 with training, coaching
and constant reinforcement of a supportive selling approach.

Recognizing the importance of diverse income sources, we experienced
healthy revenue gains in areas such as trust services, credit life sales and
our mortgage operation. Additionally, plans were finalized in 1998 for offering
retail investment services to bank customers through an alliance with a
third-party provider.

As we look to the new millennium, we anticipate with realistic excitement
the opportunities and challenges of banking in the Year 2000 and the years
beyond. We have worked diligently for over a year to address the Year 2000
("Y2K") data processing issues and interdependencies which support our
operations to ensure that our customers' money is safe in First Citizens Bank.
Please refer to page 17 in "Management's Discussion and Analysis" in this
Annual Report for more information on our Y2K readiness efforts and feel free
to contact us if you have any questions or concerns.

None of our accomplishments would have been possible in 1998 without the
efforts and flexibility of our most valued resource - our employees. They have
continually risen to the challenge of succeeding in an intensely competitive
marketplace. We are mindful that the trust, confidence and support of our
customers, stockholders, directors and advisory board members enable First
Citizens to deliver personal service and relationship banking to the people of
South Carolina.

/s/ E. Hite Miller, Sr. /s/ Jim B. Apple
- ------------------------- ----------------------
E. Hite Miller, Sr. Jim B. Apple
Chairman President

2
<PAGE>

FIRST CITIZENS BANCORPORATION OF SOUTH CAROLINA, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS

INTRODUCTION

First Citizens Bancorporation of South Carolina, Inc. ("Bancorporation"),
is a one-bank holding company headquartered in Columbia, South Carolina.
Bancorporation's wholly-owned subsidiary, First-Citizens Bank and Trust Company
of South Carolina ("Bank"), provides commercial banking and related financial
products and services throughout South Carolina.

The following discussion and analysis should be read in conjunction with
the financial information and the consolidated financial statements of
Bancorporation (including the notes thereto) contained in this document. To the
extent that any statement in this Management's Discussion and Analysis is not a
statement of historical fact and could be considered a forward-looking
statement, actual results could differ materially from those in the
forward-looking statement.

The Bank's deposits are insured by the Federal Deposit Insurance
Corporation ("FDIC") to extent permitted by law. The FDIC and the South
Carolina State Board of Financial Institutions have regulatory responsibilities
for the Bank. Bancorporation is subject to regulation as a bank holding company
by the Board of Governors of the Federal Reserve System and its voting common
stock is registered with the Securities and Exchange Commission.

Reference should also be made to the accompanying detailed historical
information presented elsewhere in this report. Average balances are average
daily balances.

[TABLES APPEAR HERE]

RETURN ON AVERAGE ASSETS
(PERCENT)

1994 1995 1996 1997 1998
- ---- ---- ---- ---- ----

.63 .76 1.04 1.05 1.01

RETURN ON AVERAGE STOCKHOLDER'S EQUITY
(PERCENT)

1994 1995 1996 1997 1998
- ---- ---- ---- ---- ----

10.69 12.04 15.52 15.02 13.94

BOOK VALUE PER COMMON SHARE
(DOLLARS)

1994 1995 1996 1997 1998
- ---- ---- ---- ---- ----

100.41 115.32 139.21 166.95 185.41

3
<PAGE>

FIRST CITIZENS BANCORPORATION OF SOUTH CAROLINA, INC.

Table 1: Five-Year Summary of Selected Financial Data (Dollars in thousands -
except for per share data)
<TABLE>
<CAPTION>
Five-Year
Compound
1998 1997 1996 1995 1994 Growth Rate (%)
------------- ------------- ------------- ------------- -------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Summary of Operations:
Interest income ....................... $ 165,371 $ 151,137 $ 134,217 $ 118,015 $ 99,769 10.55
Interest expense ...................... 73,032 65,474 57,552 53,527 40,821 13.70
---------- ---------- ---------- ---------- ----------
Net interest income ................... 92,339 85,663 76,665 64,488 58,948 8.39
Provision for loan losses ............. 4,303 4,241 4,574 2,686 2,558 1.85
---------- ---------- ---------- ---------- ----------
Net interest income after provision
for loan losses ....................... 88,036 81,422 72,091 61,802 56,390 8.78
---------- ---------- ---------- ---------- ----------
Service charges and fees .............. 28,871 24,730 21,465 19,704 18,667 9.05
Investment securities gains ........... 36 51 792 - -
---------- ---------- ---------- ---------- ----------
Total noninterest income .............. 28,907 24,781 22,257 19,704 18,667 9.07
---------- ---------- ---------- ---------- ----------
Salaries and employee benefits ........ 36,674 32,752 28,697 28,298 27,638 6.68
Other expense ......................... 43,935 39,906 36,376 33,873 32,601 7.29
---------- ---------- ---------- ---------- ----------
Total noninterest expense ............. 80,609 72,658 65,073 62,171 60,239 7.01
---------- ---------- ---------- ---------- ----------
Income before income taxes ............ 36,334 33,545 29,275 19,335 14,818 13.76
Applicable income taxes ............... 12,716 11,775 10,321 6,777 4,969 15.13
---------- ---------- ---------- ---------- ----------
Net income ............................ $ 23,618 $ 21,770 $ 18,954 $ 12,558 $ 9,849 13.06
========== ========== ========== ========== ==========
Net income per common share ........... $ 25.30 $ 23.24 $ 20.02 $ 13.13 $ 10.24 13.27
Book value per common share ........... $ 185.41 $ 166.95 $ 139.21 $ 115.32 $ 100.41 16.71
Weighted average common shares
outstanding ........................... 926,744 929,222 938,320 943,533 944,799 (.40)
Ratios (averages):
Loans to deposits ..................... 78.35% 76.68% 75.89% 70.60% 65.73%
Net loan losses to loans .............. .14 .12 .19 .11 .15
Net interest margin ................... 4.36 4.54 4.62 4.38 4.27
Stockholders' equity to:
Total assets .......................... 7.26 6.96 6.67 6.31 5.94
Deposits .............................. 8.87 8.28 7.78 7.25 6.71
Common stockholders' equity to
total assets .......................... 7.12 6.80 6.49 6.11 5.73
Return on assets ...................... 1.01 1.05 1.04 .76 .63
Return on stockholders' equity ........ 13.94 15.02 15.52 12.04 10.69
Return on common stockholders'
equity ................................ 14.22 15.37 15.95 12.44 11.08
Selected Average Balances:
Assets ................................ $2,332,634 $2,082,086 $1,831,195 $1,652,266 $1,551,997 9.64
Earning assets ........................ 2,148,348 1,918,921 1,691,031 1,508,486 1,414,375 10.04
Investment securities ................. 599,704 538,086 470,617 471,425 485,745 4.81
Loans ................................. 1,495,930 1,343,256 1,191,431 1,014,818 902,889 12.47
Deposits .............................. 1,909,183 1,751,791 1,570,015 1,437,442 1,373,612 7.82
Stockholders' equity .................. 169,422 144,961 122,110 104,245 92,161 16.64
</TABLE>

4
<PAGE>

FIRST CITIZENS BANCORPORATION OF SOUTH CAROLINA, INC.

NET INTEREST INCOME (Dollars in thousands)

Net interest income represents the principal source of earnings for
Bancorporation. Net interest income is the amount by which interest income
exceeds interest expense. Taxable equivalent net interest income totaled
$93,698 in 1998 compared with $87,087 in 1997. The growth in net interest
income in 1998 was principally the result of growth in average earning assets
due to acquisitions and promotional activities. The yield on average earning
assets benefited from a continuing shift in the mix of earning assets from
securities to higher yielding commercial and consumer loans. Loan yields were
8.69% versus 5.64% blended yields for all other earning assets.
The weighted average rate on average interest-earning assets in 1998 was
7.76%, 19 basis points lower than in 1997. Income on average interest-earning
assets increased $14,169 or 9.29%.
The weighted average rate on average interest-bearing liabilities in 1998
remained constant at 4.02%. Interest on interest-bearing liabilities increased
$7,558 or 11.54%.
Net interest income to average earning assets (net interest margin) is a
primary measure used in evaluating the effectiveness of the management of
earning assets and liabilities funding. The net interest margin decreased 18
basis points to 4.36% in 1998 from 4.54% in 1997.

[TABLES APPEAR HERE]

AVERAGE LOANS
(DOLLARS IN MILLIONS)

1994 1995 1996 1997 1998
- ---- ---- ---- ---- ----

903 1,015 1,191 1,343 1,496

AVERAGE EARNINGS ASSETS
(DOLLARS IN MILLIONS)

1994 1995 1996 1997 1998
- ---- ---- ---- ---- ----

1,414 1,508 1,691 1,919 2,148

AVERAGE DEPOSITS
(DOLLARS IN MILLIONS)

1994 1995 1996 1997 1998
- ---- ---- ---- ---- ----

1,374 1,437 1,570 1,752 1,909

AVERAGE ASSETS
(DOLLARS IN MILLIONS)

1994 1995 1996 1997 1998
- ---- ---- ---- ---- ----

1,552 1,652 1,831 2,082 2,333

5
<PAGE>

FIRST CITIZENS BANCORPORATION OF SOUTH CAROLINA, INC.

Table 2: Comparative Average Balance Sheets (Dollars in thousands)
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------------------------------------------
1998 1997
----------------------------------- -----------------------------------
Average Interest Average Average Interest Average
Balance Rev/Exp* Rate (%) Balance Rev/Exp* Rate (%)
------------- ---------- ---------- ------------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Loans** .................... $1,495,930 $129,930 8.69 $1,343,256 $118,779 8.84
Taxable investment
securities ................ 572,155 31,599 5.52 502,412 28,588 5.69
Non-taxable investment
securities ................ 27,549 2,410 8.75 35,674 3,061 8.58
Federal funds sold ......... 49,064 2,551 5.20 28,167 1,503 5.34
Other earning assets ....... 3,650 240 6.58 9,412 630 6.69
---------- -------- ---------- --------
Total interest-earning
assets ................... 2,148,348 166,730 7.76 1,918,921 152,561 7.95
---------- -------- ---------- --------
Noninterest-earning
assets:
Cash and due from banks 88,473 81,052
Premises and equipment ..... 69,776 54,155
Other, less reserve for
loan losses ............... 26,037 27,958
---------- ----------
Total noninterest-
earning assets ........... 184,286 163,165
---------- ----------
TOTAL ASSETS ............... $2,332,634 $2,082,086
========== ==========
Interest-bearing
liabilities:
Deposits ................... $1,577,717 $ 60,257 3.82 $1,456,862 $ 56,844 3.90
Short-term borrowings ...... 193,699 9,199 4.75 159,275 7,762 4.87
Long-term debt ............. 43,930 3,576 8.14 11,164 868 7.77
---------- -------- ---- ---------- -------- ----
Total interest-bearing
liabilities .............. 1,815,346 73,032 4.02 1,627,301 65,474 4.02
---------- -------- ---- ---------- -------- ----
Net interest spread ........ 3.74 3.93
==== ====
Noninterest-bearing
liabilities:
Demand deposits ............ 331,466 294,929
Other liabilities .......... 16,400 14,895
---------- ----------
Total noninterest-
bearing liabilities ...... 347,866 309,824
Stockholders' equity ....... 169,422 144,961
---------- ----------
TOTAL LIABILITIES AND
STOCKHOLDERS'
EQUITY .................... $2,332,634 $2,082,086
========== ==========
Net interest income ........ $ 93,698 $ 87,087
======== ========
Interest income to
earning assets ............ 7.76 7.95
Interest expense to
earning assets ............ 3.40 3.41
---- ----
Net interest income to
earning assets ............ 4.36 4.54
==== ====

<CAPTION>
Year Ended December 31,
----------------------------------
1996
----------------------------------
Average Interest Average
Balance Rev/Exp* Rate (%)
------------- ---------- ---------
<S> <C> <C> <C>
Interest-earning assets:
Loans** .................... $1,191,431 $104,685 8.79
Taxable investment
securities ................ 431,751 26,095 6.04
Non-taxable investment
securities ................ 38,866 3,202 8.24
Federal funds sold ......... 17,147 895 5.22
Other earning assets ....... 11,836 794 6.71
---------- --------
Total interest-earning
assets ................... 1,691,031 135,671 8.02
---------- --------
Noninterest-earning
assets:
Cash and due from banks 67,395
Premises and equipment ..... 47,858
Other, less reserve for
loan losses ............... 24,911
----------
Total noninterest-
earning assets ........... 140,164
----------
TOTAL ASSETS ............... $1,831,195
==========
Interest-bearing
liabilities:
Deposits ................... $1,315,306 $ 51,170 3.89
Short-term borrowings ...... 114,619 5,523 4.82
Long-term debt ............. 10,694 859 8.03
---------- -------- ----
Total interest-bearing
liabilities .............. 1,440,619 57,552 3.99
---------- -------- ----
Net interest spread ........ 4.03
====
Noninterest-bearing
liabilities:
Demand deposits ............ 254,709
Other liabilities .......... 13,757
----------
Total noninterest-
bearing liabilities ...... 268,466
Stockholders' equity ....... 122,110
----------
TOTAL LIABILITIES AND
STOCKHOLDERS'
EQUITY .................... $1,831,195
==========
Net interest income ........ $ 78,119
========
Interest income to
earning assets ............ 8.02
Interest expense to
earning assets ............ 3.40
----
Net interest income to
earning assets ............ 4.62
====
</TABLE>

* Interest income includes a taxable equivalent adjustment using the
incremental statutory federal income tax rate as applicable.

** Nonaccrual loans are included in the average loan balances. Income on such
loans is generally recognized on a cash basis.

6
<PAGE>

FIRST CITIZENS BANCORPORATION OF SOUTH CAROLINA, INC.

Table 3: Taxable Equivalent Rate/Volume Variance Analysis (Dollars in
thousands)
<TABLE>
<CAPTION>
1998 Compared to 1997
------------------------
**Change Due To
------------------------
1998 1997 1996 Rate Volume
----------- ----------- ----------- ------------- ----------
<S> <C> <C> <C> <C> <C>
Interest Income*
Loans ........................ $129,930 $118,779 $104,685 $ (1,551) $13,267
Investment securities:
Taxable ..................... 31,599 28,588 26,095 (839) 3,850
Non-taxable ................. 2,410 3,061 3,202 60 (711)
-------- -------- -------- --------- -------
Total investment
securities ................. 34,009 31,649 29,297 (779) 3,139
Other earning assets ......... 240 630 794 (11) (379)
Federal funds sold and
securities purchased
under agreements to
resell ...................... 2,551 1,503 895 (39) 1,087
-------- -------- -------- --------- -------
Total earning assets ........ 166,730 152,561 135,671 (2,380) 17,114
-------- -------- -------- --------- -------
Interest Expense
NOW accounts ................ 8,871 7,847 6,999 (159) 1,183
Market rate accounts ........ 9,981 9,234 8,224 195 552
Other accounts .............. 467 443 481 58 (34)
Time deposits in excess
of $100 thousand ............ 7,154 6,791 5,938 (79) 442
Other time deposits ......... 33,784 32,529 29,528 (495) 1,750
-------- -------- -------- --------- -------
Total deposits .............. 60,257 56,844 51,170 (480) 3,893
Short-term borrowings ........ 9,199 7,762 5,523 (198) 1,635
Long-term debt ............... 3,576 868 859 41 2,667
-------- -------- -------- --------- -------
Total interest-bearing
liabilities ................. 73,032 65,474 57,552 (637) 8,195
-------- -------- -------- --------- -------
Net interest income .......... $ 93,698 $ 87,087 $ 78,119 $ (1,743) $ 8,919
======== ======== ======== ========= =======

<CAPTION>
1998 Compared
to 1997 1997 Compared to 1996
-------------- --------------------------------------
**Change Due To
Net Increase ------------------------ Net Increase
(Decrease) Rate Volume (Decrease)
-------------- ------------- ---------- -------------
<S> <C> <C> <C> <C>
Interest Income*
Loans ........................ $ 11,716 $ 673 $13,421 $ 14,094
Investment securities:
Taxable ..................... 3,011 (1,528) 4,021 2,493
Non-taxable ................. (651) 133 (274) (141)
-------- -------- ------- --------
Total investment
securities ................. 2,360 (1,395) 3,747 2,352
Other earning assets ......... (390) (2) (162) (164)
Federal funds sold and
securities purchased
under agreements to
resell ...................... 1,048 20 588 608
-------- ---------- ------- --------
Total earning assets ........ 14,734 (704) 17,594 16,890
-------- ---------- ------- --------
Interest Expense
NOW accounts ................ 1,024 (70) 918 848
Market rate accounts ........ 747 539 471 1,010
Other accounts .............. 24 5 (43) (38)
Time deposits in excess
of $100 thousand ............ 363 (25) 878 853
Other time deposits ......... 1,255 (376) 3,377 3,001
-------- ---------- ------- --------
Total deposits .............. 3,413 73 5,601 5,674
Short-term borrowings ........ 1,437 64 2,175 2,239
Long-term debt ............... 2,708 (28) 37 9
-------- ---------- ------- --------
Total interest-bearing
liabilities ................. 7,558 109 7,813 7,922
-------- ---------- ------- --------
Net interest income .......... $ 7,176 $ (813) $ 9,781 $ 8,968
======== ======== ======= ========
</TABLE>

* Interest income includes a taxable equivalent adjustment using the
incremental statutory federal income tax rate as applicable.
** Rate-volume changes have been allocated to each category based on the
percentage of each to the total change.

INVESTMENT SECURITIES (Dollars in thousands)

As of December 31, 1998, the investment portfolio totaled $623,828,
compared to $588,409 as of December 31, 1997. Bancorporation continues to
invest primarily in short-term U.S. Government obligations, thereby minimizing
credit, interest rate and liquidity risk. The portfolio was comprised of 90.74%
and 88.84% of U.S. Government obligations as of December 31, 1998 and 1997,
respectively. The remainder of the investment portfolio principally consists of
municipal notes, bonds and equity securities.

Average investment securities as a percentage of average earning assets
decreased from 28.04% as of December 31, 1997 to 27.91% as of December 31, 1998
with substantially all the decrease occurring in investments in U.S. Government
obligations. Investment securities remain the second largest component of
interest-earning assets.

The weighted average maturity of U.S. Government obligations held in the
portfolio was 10.6 months as of December 31, 1998, compared to 12.0 months as
of December 31, 1997. At year-end, the market value of the held-to-maturity
portfolio was $3,183 above book value, consisting of unrealized gains of $3,226
and unrealized losses of $43.

Investments in debt securities are classified as held-to-maturity and
reported at cost adjusted for amortization and accretion of premiums and
discounts, respectively. Equity securities are classified as available-for-sale
and reported at fair value with the change in unrealized gains and losses, net
of tax, in accumulated other comprehensive income included as a component of
stockholders' equity. For the year ended December 31, 1998, Bancorporation
recorded a $8,397 increase in stockholders' equity ($12,918, net of tax effect
of $4,521) on equity securities classified as available-for-sale. The equity
securities principally consist of 167,600 shares of Class A and 45,900 shares
of Class B common stock of First Citizens BancShares, Inc., Raleigh, North
Carolina, 219,500 shares of common stock of First Spartan Financial Corporation
and 231,000 shares of common stock of Heritage Bancorp, Inc. These four issues
account for 93.67% of the dollar amount of equity securities.

7
<PAGE>

FIRST CITIZENS BANCORPORATION OF SOUTH CAROLINA, INC.

Table 4: Investment Securities Analysis (Dollars in thousands)
<TABLE>
<CAPTION>
1998 1997 1996
------------------------------------ ----------------------- -----------------------
Taxable
Book Market Equivalent Book Market Book Market
Value Value Yield* (%) Value Value Value Value
----------- ----------- ------------ ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
U. S. Government obligations:
Within one year ....................... $298,688 $300,485 5.93 $259,201 $259,532 $228,451 $228,837
One to five years ..................... 267,404 268,459 5.00 263,514 264,546 197,985 198,255
-------- -------- -------- -------- -------- --------
Total ................................. 566,092 568,944 5.49 522,715 524,078 426,436 427,092
States and political subdivisions:
Within one year ....................... 1,793 1,798 6.80 4,854 4,866 4,087 4,092
One to five years ..................... 10,173 10,252 7.67 7,876 7,981 11,233 11,395
Five to ten years ..................... 5,474 5,679 9.21 11,896 12,166 14,889 15,195
Over ten years ........................ 7,123 7,145 9.83 8,038 8,079 9,535 9,601
-------- -------- -------- -------- -------- --------
Total ................................. 24,563 24,874 8.57 32,664 33,092 39,744 40,283
Other securities:
Within one year ....................... - - - 145 143 100 100
One to five years ..................... 260 259 6.74 411 407 746 737
Five to ten years ..................... 50 50 9.15 50 48 69 68
Over ten years ........................ 321 342 5.43 511 529 703 714
-------- -------- -------- -------- -------- --------
Total ................................. 631 651 6.27 1,117 1,127 1,618 1,619
-------- -------- -------- -------- -------- --------
Total interest-earning investments ..... 591,286 594,469 5.62 556,496 558,297 467,798 468,994
Stock and other investments ............ 32,542 32,542 - 31,913 31,913 17,653 17,653
-------- -------- -------- -------- -------- --------
Total portfolio ....................... $623,828 $627,011 5.62 $588,409 $590,210 $485,451 $486,647
======== ======== ======== ======== ======== ========
</TABLE>

* Taxable equivalent yield was calculated using the incremental statutory
federal income tax rate as applicable.

LOANS (Dollars in thousands)

Loans comprise the major portion of earning assets of Bancorporation, with
average loans accounting for 69.63% and 70.00% of average earning assets as of
December 31, 1998 and 1997, respectively. Gross loans increased $144,632 or
10.13% to $1,573,069 as of December 31, 1998, from $1,428,437 as of December
31, 1997. Of the total increase, $42 represents loans obtained in acquisitions.
The remaining loan growth of $144,590 represents an internal growth rate for
loans of 10.12%. Most of the increase in loans was attributable to an increase
in loans secured by 1-4 family residential properties, which increased $103,770
or 16.82%, followed by commercial real estate loans, which increased $25,398 or
9.32%. The portfolio mix did not change significantly in 1998 and no major
change is expected in 1999. Bancorporation desires to make business loans for
productive purposes where the business has adequate capital and management
expertise to succeed. Consumer loans are granted for many purposes, provided
that underwriting criteria are met. The ability and willingness of the borrower
to repay debt are primary factors in granting credit. Repayment ability is
established by review of past and future cash flow coverage for businesses or
debt-to-income ratio for consumers. The willingness of the borrower to repay
debt is reviewed through trade credit for businesses and credit bureau reports
and other traditional methods for consumers. Collateral guarantees,
loan-to-value ratios and loan terms, are based on industry and/or regulatory
standards depending on loan purpose and the composition of collateral provided.

8
<PAGE>

FIRST CITIZENS BANCORPORATION OF SOUTH CAROLINA, INC.

Table 5: Distribution of Loans (Dollars in thousands)
<TABLE>
<CAPTION>
December 31,
-----------------------------------------------
1998 1997
----------------------- -----------------------
% of % of
Total Total
Balance Loans Balance Loans
------------- --------- ------------- ---------
<S> <C> <C> <C> <C>
Type of Loan:
Real estate loans:
Construction and land
development .................... $ 38,138 2.42 $ 23,837 1.67
Secured by 1-4 family
residential properties ......... 720,887 45.83 617,117 43.20
Commercial ...................... 297,918 18.94 272,520 19.08
Loans for purchasing and
carrying securities ............ 643 .04 817 .06
Loans to farmers ................ 8,984 .57 7,917 .55
Commercial and Industrial
loans .......................... 140,541 8.93 128,584 9.00
Loans to individuals for
household, family and
other personal
expenditures ................... 337,051 21.43 356,612 24.97
Other loans, all
attributable to domestic
operations ..................... 28,907 1.84 21,033 1.47
---------- ------ ---------- ------
Total .......................... $1,573,069 100.00 $1,428,437 100.00
========== ====== ========== ======

<CAPTION>
December 31,
----------------------------------------------------------------------
1996 1995 1994
----------------------- ----------------------- ----------------------
% of % of % of
Total Total Total
Balance Loans Balance Loans Balance Loans
------------- --------- ------------- --------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Type of Loan:
Real estate loans:
Construction and land
development .................... $ 18,228 1.44 $ 16,334 1.47 $ 7,888 .84
Secured by 1-4 family
residential properties ......... 555,149 43.72 459,283 41.22 388,997 41.51
Commercial ...................... 236,800 18.65 200,088 17.96 173,690 18.54
Loans for purchasing and
carrying securities ............ 681 .05 614 .06 484 .05
Loans to farmers ................ 6,806 .54 6,338 .57 5,843 .62
Commercial and Industrial
loans .......................... 102,404 8.06 92,641 8.31 84,900 9.06
Loans to individuals for
household, family and
other personal
expenditures ................... 337,589 26.59 332,817 29.86 269,693 28.79
Other loans, all
attributable to domestic
operations ..................... 12,122 .95 6,144 .55 5,530 .59
---------- ------ ---------- ------ -------- ------
Total .......................... $1,269,779 100.00 $1,114,259 100.00 $937,025 100.00
========== ====== ========== ====== ======== ======
</TABLE>

Table 6: Maturities and Rate Sensitivity of Loans - December 31, 1998 (Dollars
in thousands)
<TABLE>
<CAPTION>
Over 1 Over
1 Year through 5
Total or less 5 Years Years
------------ ----------- ------------- -----------
<S> <C> <C> <C> <C>
Type of Loan:
Construction and land development ............ $ 38,138 $ 24,931 $ 13,207 $ -
Commercial, financial and agricultural ....... 476,993 108,050 283,227 85,716
Real estate, individual and other ............ 1,057,938 117,029 856,351 84,558
---------- -------- ---------- --------
Total ........................................ $1,573,069 $250,010 $1,152,785 $170,274
========== ======== ========== ========
Rate Sensitivity for Loans (over one year):
Predetermined rate ........................... $1,068,367 $ 932,866 $135,501
Floating or adjustable rate .................. 254,692 219,919 34,773
---------- ---------- --------
Total ........................................ $1,323,059 $1,152,785 $170,274
========== ========== ========
</TABLE>

9
<PAGE>

FIRST CITIZENS BANCORPORATION OF SOUTH CAROLINA, INC.

PROVISION AND RESERVE FOR LOAN LOSSES (Dollars in thousands)

The provision for loan losses totaled $4,303 for the year ended December
31, 1998, exceeding net chargeoffs of $2,132. The provision increased by $62 or
1.46% from the provision for the year ended December 31, 1997.

Bancorporation manages credit risk through a variety of methods including
credit scoring, establishing loan type parameters and underwriting. In
addition, credit management is centralized using a standardized system of
controls and subjecting the portfolio to detailed credit reviews by individuals
independent of the lending function. In establishing an appropriate level of
reserve, the financial condition of the individual borrower is assessed and a
determination of the value and adequacy of the underlying collateral and loss
and delinquency trends are considered. Management believes that the reserve for
loan losses of $28,306 provides adequate coverage against potential loss
exposure as of December 31, 1998, although no assurance can be given that the
on-going evaluation of the portfolio in light of economic conditions will not
warrant additional provision. Improved conditions within Bancorporation's loan
and commitments portfolio, including reduced delinquencies and continued
economic improvement, led to a reduction in the reserve to 1.80% of gross loans
from 1.83% as of December 31, 1998 and 1997, respectively. Coverage ratios of
nonperforming loans were 1,259.16% for 1998 and 956.98% for 1997.

Net charge-offs for the year ended December 31, 1998, totaled $2,132, or
.14% of average loans, an increase of $543 from $1,589, or .12% of average
loans in 1997. Recoveries represented 44.90% of gross loans charged off versus
51.72% for the year ended December 31, 1997.

Bancorporation maintains the reserve for loan losses to absorb possible
losses inherent in the loan portfolio. The reserve consists of three elements:
(i) reserves established on specific loans, (ii) reserves based on historical
loan loss experience, and (iii) reserves based on economic conditions in
Bancorporation's individual markets. The specific reserve element is based on a
regular analysis of all loans and commitments over a fixed dollar amount where
the internal credit rating is at or below a predetermined classification. The
historical loan loss element represents a projection of future credit losses as
determined by estimates and analyses that examine loss experience and trends in
the portfolio. The general economic condition element is determined by
management and is based on knowledge of specific economic and individual
markets served and how those markets might affect the collectibility of loans
and the marketability of loan collateral. Bancorporation is committed to early
recognition of possible loan problems and to maintaining an adequate loan loss
reserve.

Table 7: Reserve for Loan Losses (Dollars in thousands)
<TABLE>
<CAPTION>
1998 1997 1996 1995 1994
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Beginning loan loss reserve ................. $26,135 $23,483 $21,153 $19,249 $18,061
Charge-offs:
Commercial, financial and agricultural ..... 302 64 186 35 -
Real estate ................................ 698 563 506 421 607
Commercial loans to individuals ............ 778 621 1,002 462 362
Installment loans to individuals ........... 2,078 2,037 1,660 1,036 1,181
All other loans ............................ 13 6 - - -
------- ------- ------- ------- -------
Total charge-offs .......................... 3,869 3,291 3,354 1,954 2,150
Recoveries:
Commercial, financial and agricultural ..... 8 37 20 - 10
Real estate ................................ 621 920 498 294 265
Commercial loans to individuals ............ 720 347 239 190 167
Installment loans to individuals ........... 388 398 353 391 338
------- ------- ------- ------- -------
Total recoveries ........................... 1,737 1,702 1,110 875 780
------- ------- ------- ------- -------
Total net charge-offs ...................... 2,132 1,589 2,244 1,079 1,370
Provision for loan losses ................... 4,303 4,241 4,574 2,686 2,558
Reserves related to acquisitions ............ - - - 297 -
------- ------- ------- ------- -------
Ending loan loss reserve .................... $28,306 $26,135 $23,483 $21,153 $19,249
======= ======= ======= ======= =======
</TABLE>

10
<PAGE>

FIRST CITIZENS BANCORPORATION OF SOUTH CAROLINA, INC.

Table 8: Allocation of Reserve for Loan Losses (Dollars in thousands)
<TABLE>
<CAPTION>
December 31,
-----------------------------------------------------------
1998 1997 1996
------------------- ------------------- -------------------
% of % of % of
Loans Loans Loans
to to to
Total Total Total
Reserve Loans Reserve Loans Reserve Loans
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Real estate-construction ......... $ 100 2.42 $ 100 1.67 $ 100 1.44
Real estate-mortgage ............. 8,426 64.77 8,402 62.28 7,255 62.37
Installment loans to
individuals ...................... 7,617 21.43 6,595 24.97 2,579 26.59
Commercial, financial and
agricultural .................... 2,131 11.38 2,124 11.08 1,814 9.60
Unallocated ...................... 10,032 - 8,914 - 11,735 -
------- ------ ------- ------ ------- ------
Total ........................... $28,306 100.00 $26,135 100.00 $23,483 100.00
======= ====== ======= ====== ======= ======

<CAPTION>
December 31,
----------------------------------------
1995 1994
------------------- --------------------
% of % of
Loans Loans
to to
Total Total
Reserve Loans Reserve Loans
--------- --------- --------- ----------
<S> <C> <C> <C> <C>
Real estate-construction ......... $ 100 1.47 $ 16 .84
Real estate-mortgage ............. 7,508 59.18 3,719 60.05
Installment loans to
individuals ...................... 2,562 29.86 1,792 28.79
Commercial, financial and
agricultural .................... 1,581 9.49 1,015 10.32
Unallocated ...................... 9,402 - 12,707 -
------- ------ ------- ------
Total ........................... $21,153 100.00 $19,249 100.00
======= ====== ======= ======
</TABLE>

Table 9: Analysis of Asset Quality (Dollars in thousands)
<TABLE>
<CAPTION>
1998 1997
---------------------- --------------------
% of % of
Total Total
Balance Loans Balance Loans
--------- ------------ --------- ----------
<S> <C> <C> <C> <C>
Risk Elements:
Nonaccrual loans ................... $2,248 .14 $2,653 .19
Restructured loans ................. 0 .00 78 .01
------ -------- ------ ------
Total nonperforming loans ......... 2,248 .14 2,731 .20
Loans past due 90 days ............. 1,522 .10 1,497 .10
------ -------- ------ ------
Total ............................. $3,770 .24 $4,228 .30
====== ======== ====== ======
Nonperforming Assets:
Commercial, financial and
agricultural ...................... $ 391 .02 $ 463 .03
Consumer ........................... 85 .01 26 .00
Real estate ........................ 1,772 .11 2,242 .16
------ -------- ------ ------
Total nonperforming loans ......... 2,248 .14 2,731 .19
Other real estate owned ............ 402 .03 572 .04
------ -------- ------ ------
Total ............................. $2,650 .17 $3,303 .23
====== ======== ====== ======
Asset Quality Ratios:
Reserve to year-end loans .......... 1.80% 1.83%
Net chargeoffs to average
loans ............................. .14 .12
Coverage ratio ..................... 1,259.16 956.98

<CAPTION>
1996 1995 1994
-------------------- -------------------- --------------------
% of % of % of
Total Total Total
Balance Loans Balance Loans Balance Loans
--------- ---------- --------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Risk Elements:
Nonaccrual loans ................... $2,920 .23 $3,323 .30 $2,865 .31
Restructured loans ................. 128 .01 569 .05 1,323 .14
------ ------ ------ ------ ------ ------
Total nonperforming loans ......... 3,048 .24 3,892 .35 4,188 .45
Loans past due 90 days ............. 2,261 .18 1,747 .16 827 .09
------ ------ ------ ------ ------ ------
Total ............................. $5,309 .42 $5,639 .51 $5,015 .54
====== ====== ====== ====== ====== ======
Nonperforming Assets:
Commercial, financial and
agricultural ...................... $ 559 .04 $ 951 .09 $ 238 .03
Consumer ........................... 83 .01 38 .00 106 .01
Real estate ........................ 2,406 .19 2,903 .26 3,844 .41
------ ------ ------ ------ ------ ------
Total nonperforming loans ......... 3,048 .24 3,892 .35 4,188 .45
Other real estate owned ............ 518 .04 473 .04 270 .03
------ ------ ------ ------ ------ ------
Total ............................. $3,566 .28 $4,365 .39 $4,458 .48
====== ====== ====== ====== ====== ======
Asset Quality Ratios:
Reserve to year-end loans .......... 1.85% 1.90% 2.05%
Net chargeoffs to average
loans ............................. .19 .11 .15
Coverage ratio ..................... 770.44 543.50 459.62
</TABLE>

Any loans classified by the Bank or regulatory examiners as loss,
doubtful, substandard or special mention that have not been disclosed hereunder
or under the "Loans" or "Asset Quality" narrative discussions do not (1)
represent or result from trends or uncertainties that management expects will
materially impact future operating results, liquidity or capital resources, or
(2) represent material credits as to which management is aware of any
information that causes serious doubt as to the ability of such borrowers to
comply with the loan repayment terms.

Interest income related to nonaccrual and restructured loans that would
have been recognized if such loans were current in accordance with their
original contractual terms did not differ materially from the amounts actually
recognized.

Based upon an ongoing assessment of risk elements in the portfolio and
factors affecting credit quality, it is management's opinion that there are
currently no significant unidentified potential problem credits. However,
factors affecting a borrower's repayment ability may vary due to changing
economic conditions and other factors that may affect loan quality.

11
<PAGE>

FIRST CITIZENS BANCORPORATION OF SOUTH CAROLINA, INC.

FUNDING SOURCES (Dollars in thousands)

Bancorporation's primary source of funds is its deposit base. Average
deposits increased 8.98% to $1,909,183 as of December 31, 1998 from $1,751,791
as of December 31, 1997. As of December 31, 1998, deposits increased $158,067
to $2,037,487 or 8.41%. Acquisitions during 1998 accounted for $23,774 or
15.04% of deposit growth.

Core deposits financed loan and investment activity. Core deposits are
defined as demand deposits, savings, NOW, money market accounts and time
deposits under one hundred thousand dollars. As of December 31, 1998,
$1,898,545 or 93.18% of total deposits of $2,037,487 were considered core
deposits. As of December 31, 1997, $1,745,084 or 92.85% of total deposits of
$1,879,420 were considered core deposits.

Purchased funds, which consist of large time deposits and short-term
borrowings, are another source of funds. As of December 31, 1998, large time
deposits increased $4,606 or 3.43% to $138,942 as compared to $134,336 as of
December 31, 1997. Short-term borrowings, which consist primarily of federal
funds purchased and securities sold under agreements to repurchase, averaged
$192,654 in 1998 compared to $159,275 in 1997, an increase of 20.97%.

Table 10: Time Deposits of $100 Thousand and Over (Dollars in thousands)
<TABLE>
<CAPTION>
December 31,
-----------------------------------------
1998 1997 1996
------------- ------------- -------------
<S> <C> <C> <C>
3 months or less ........................ $ 57,792 $ 74,785 $ 66,274
Over 3 months through 6 months .......... 41,244 22,330 22,741
Over 6 months through 12 months ......... 27,979 22,628 24,642
Over 12 months .......................... 11,927 14,593 8,000
--------- --------- ---------
Total .................................. $ 138,942 $ 134,336 $ 121,657
========= ========= =========
Percent of Total Deposits ............... 6.82% 7.15% 7.32%
</TABLE>

Table 11: Deposit Analysis (Dollars in thousands)
<TABLE>
<CAPTION>
December 31,
---------------------------------------------------------------------------
1998 1997 1996
------------------------ ------------------------ -----------------------
Average Average Average Average Average Average
Balance Rate (%) Balance Rate (%) Balance Rate (%)
------------- ---------- ------------- ---------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C>
Demand deposits ......................... $ 331,466 - $ 294,929 - $ 254,709 -
NOW accounts ............................ 475,669 1.86 412,241 1.90 364,023 1.92
Market rate savings ..................... 297,847 3.35 281,386 3.28 267,027 3.08
Regular and premium savings ............. 16,240 2.88 17,438 2.54 19,133 2.51
Time deposits of $100 thousand & over ... 135,845 5.27 127,452 5.33 110,979 5.35
Other time deposits ..................... 652,116 5.18 618,345 5.26 554,144 5.33
---------- ---------- ----------
Total .................................. $1,909,183 $1,751,791 $1,570,015
========== ========== ==========
</TABLE>

Table 12: Federal Funds Purchased and Securities Sold Under Agreements to
Repurchase Analysis (Dollars in thousands)
<TABLE>
<CAPTION>
1998 1997 1996
---------------------- ---------------------- ---------------------
Amount Rate (%) Amount Rate (%) Amount Rate (%)
----------- ---------- ----------- ---------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
At year-end:
Securities sold under agreements to repurchase ..... $204,702 4.39 $184,168 5.04 $132,891 4.67
Average for the year:
Federal funds purchased ............................ $ 2,934 5.97 $ 1,192 6.02 $ 1,482 5.37
Securities sold under agreements to repurchase ..... 189,720 4.73 158,083 4.86 113,137 4.81
-------- -------- --------
Total .............................................. $192,654 4.75 $159,275 4.87 $114,619 4.82
======== ======== ========
Maximum month-end balance:
Federal funds purchased ............................ $ 4,400 $ 17,300 $ 7,300
Securities sold under agreements to repurchase ..... 236,278 184,168 139,030
</TABLE>

12
<PAGE>

FIRST CITIZENS BANCORPORATION OF SOUTH CAROLINA, INC.

NONINTEREST INCOME (Dollars in thousands)

Total noninterest income increased 16.65% to $28,907 for the year ended
December 31, 1998, compared to $24,781 for the year ended December 31, 1997.
Growth in the current year was primarily due to an increase in service charges
on deposit accounts as the result of growth in the number of deposit accounts,
the repricing of charges and an increased emphasis on collecting service fees.

Table 13: Noninterest Income (Dollars in thousands)
<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------------------------------------------------
% % %
Change Change Change
1998 98/97 1997 97/96 1996 96/95
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Service charges on deposit accounts .............. $16,371 13.48 $14,426 19.09 $12,114 13.62
Commission and fees from fiduciary activities .... 1,531 17.95 1,298 35.49 958 20.96
Fees for other customer services ................. 2,219 3.26 2,149 ( 7.77) 2,330 ( .85)
Mortgage servicing ............................... 2,211 1.14 2,186 8.27 2,019 2.28
Bankcard discount ................................ 3,240 16.17 2,789 19.49 2,334 13.74
Insurance premiums earned ........................ 1,879 27.48 1,474 31.02 1,125 ( 4.82)
Gain on sale of securities ....................... 36 (29.41) 51 (93.56) 792 100.00
Other ............................................ 1,420 248.04 408 (30.26) 585 (15.46)
------- ------- -------
Total ........................................... $28,907 16.65 $24,781 11.34 $22,257 12.96
======= ======= =======
</TABLE>

NONINTEREST EXPENSE (Dollars in thousands)

Total noninterest expense for the year ended December 31, 1998 increased
$7,951 or 10.94% to $80,609, as compared to an increase of $7,585 or 11.66% to
$72,658 for the year ended December 31, 1997. Most of the increase is
attributable to an increase in salaries and employee benefits, depreciation on
new buildings and equipment and other expenses, offset by a $1,764 decrease in
amortization of intangibles.

Table 14: Noninterest Expense (Dollars in thousands)
<TABLE>
<CAPTION>
Year Ended December 31,
------------------------------------------------------------------
% % %
Change Change Change
1998 98/97 1997 97/96 1996 96/95
---------- ---------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Salaries and employee benefits ........ $36,674 11.97 $32,752 14.13 $28,697 1.41
Net occupancy expense of premises ..... 5,443 16.20 4,684 15.65 4,050 13.16
Furniture and equipment expense ....... 5,594 22.14 4,580 21.26 3,777 (1.59)
Stationery and supplies ............... 1,434 ( 2.05) 1,464 4.13 1,406 19.56
Telephone ............................. 1,729 16.90 1,479 7.80 1,372 8.89
Amortization of intangibles ........... 6,886 (20.39) 8,650 20.61 7,172 26.33
Bankcard processing fees .............. 3,698 31.00 2,823 20.80 2,337 14.28
Data processing fees .................. 6,540 14.94 5,690 7.97 5,270 15.60
Other ................................. 12,611 19.69 10,536 (4.15) 10,992 (6.36)
------- ------- -------
Total ................................ $80,609 10.94 $72,658 11.66 $65,073 4.67
======= ======= =======
</TABLE>

13
<PAGE>

FIRST CITIZENS BANCORPORATION OF SOUTH CAROLINA, INC.

INTANGIBLE ASSETS (Dollars in thousands)

As of December 31, 1998, intangible assets totaled $17,167, representing a
$3,360 net decrease from $20,527 as of December 31, 1997. Amortization expense
related to intangible assets was $6,886 or 20.39% lower than $8,650 for the
year ended December 31, 1997. The decrease was due to prior acquisitions being
fully amortized and only one month's amortization on the acquisition in 1998
which occurred in December.

Table 15: Intangible Assets (Dollars in thousands)
<TABLE>
<CAPTION>
December 31,
------------------------------------------------------------------------------
1998 1997 1996
------------------------- ------------------------- ------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance Amortization Balance Amortization Balance Amortization
----- ----- ----- ----- ----- -----
Intangible Assets:
Goodwill ...................... $ 14,519 $ 5,808 $ 17,813 $ 6,181 $ 14,926 $ 4,143
Deposit based premium ......... 0 596 596 1,681 2,277 1,957
Mortgage servicing rights ..... 2,648 482 2,118 788 2,243 1,072
-------- ------------ -------- ------------ -------- ------------
Total ........................ $ 17,167 $ 6,886 $ 20,527 $ 8,650 $ 19,446 $ 7,172
======== ============ ======== ============ ======== ============
</TABLE>

CAPITAL ADEQUACY

The Federal Reserve Board and the Federal Deposit Insurance Corporation
have issued risk-based capital guidelines for United States banking
corporations. The objective of these guidelines is to provide a uniform capital
measurement that is more sensitive to variations in risk profiles of banking
corporations.

Regulatory agencies define capital as Tier I, consisting of stockholders'
equity less ineligible intangible assets, and Tier II, consisting of Tier I
capital plus the allowable portion of the reserve for loan losses and certain
long-term debt. Capital adequacy is measured by comparing both capital levels
to Bancorporation's risk-adjusted assets and off-balance sheet items.
Regulatory requirements presently specify that Tier I capital should exclude
the market appreciation or depreciation of securities available-for-sale
arising from valuation adjustments. In addition to these capital ratios,
regulatory agencies have established a Tier I leverage ratio which measures
Tier I capital to average assets less ineligible intangible assets.

Regulatory guidelines require a minimum of total capital to risk-adjusted
assets ratio of 8 percent with at least 50 percent consisting of tangible
common stockholders' equity and a minimum Tier I leverage ratio of 3 percent.
Banks which meet or exceed a Tier I ratio of 6 percent, a total capital ratio
of 10 percent and a Tier I leverage ratio of 5 percent are considered
well-capitalized by regulatory standards.

Bancorporation's Tier 1 capital ratio at year-end was 13.01% compared to
9.13% in 1997. The total risk-based capital ratio was 14.27% compared to 10.49%
in 1997. Both of these measures exceed the regulatory minimums of 4.00% for
Tier 1 and 8.00% for total risk-based capital. Based on the guidelines above,
Bancorporation is well-capitalized. Refer to Note 17 "Capital Matters" for
further analysis of risk-based requirements.

Table 16: Capital Adequacy (Dollars in thousands-except per share data)
<TABLE>
<CAPTION>
December 31,
------------------------------------------------------------------------
1998 1997 1996 1995 1994
------------- ------------- ------------- ------------- ------------
<S> <C> <C> <C> <C> <C>
Total Stockholders' Equity:
Year-end .............................. $ 174,175 $ 158,418 $ 132,641 $ 112,086 $ 98,025
Average ............................... 169,422 144,961 122,110 104,245 92,161
Book value per common share ........... 185.41 166.95 139.21 115.32 100.41
Tier 1 capital ratio .................. 13.01% 9.13% 8.90% 8.62% 8.95%
Total risk-based capital ratio ........ 14.27 10.49 10.39 10.35 11.04
Internal Capital Generation:
Return on average equity .............. 13.94% 15.02% 15.52% 12.04% 10.69%
Earnings retention rate ............... 99.28 99.21 99.10 98.64 98.26
Dividend payout ratio ................. .72 .79 .90 1.36 1.74
Internal capital generation rate* ..... 13.84 14.90 15.38 11.88 10.50
</TABLE>

* Return on Average Equity x Earnings Retention Rate = Internal Capital
Generation Rate

INCOME TAXES (Dollars in thousands)

Applicable income taxes increased $941 or 7.99% for the year. Income taxes
computed at the statutory rate are reduced primarily by the interest earned on
state and municipal debt securities and obligations (which are exempt from
Federal taxes) which results in substantial interest savings for local
governments and their constituents.

14
<PAGE>

FIRST CITIZENS BANCORPORATION OF SOUTH CAROLINA, INC.

LIQUIDITY (Dollars in thousands)

The role of Bancorporation's Asset/Liability Management Committee ("ALCO")
is to monitor Bancorporation's liquidity position, exposure to interest rate
risk and pricing policies. Liquidity involves the ability to meet cash flow
requirements which arise primarily from withdrawal of deposits, extensions of
credit, payment of operating expenses and repayment of purchased funds. Funds
are provided primarily through earnings from operations, expansion of the
deposit base, borrowing funds in the money market, the maturity of investment
assets and repayment of loans.

Bancorporation has historically maintained strong liquidity through
increases in core deposits and investment maturities. Core deposits were
$1,898,545, or 93.18% of total deposits, slightly up from $1,745,084 or 92.85%
as of December 31, 1997. The weighted average maturity of U.S. Government
obligations, which make up 90.74% of the investment portfolio as of December
31, 1998, remains relatively short at 10.6 months.

The FDIC has standard guidelines as to what it considers adequate
liquidity in a bank's portfolio. The liquidity ratio (net cash and short-term
and marketable assets as a percentage of net deposits and short-term
liabilities) is used as the measure with a desired range of 20.00 to 25.00%.
Bancorporation's liquidity ratio at year-end was 23.54%.

INTEREST RATE RISK (Dollars in thousands)

Management of interest rate risk involves maintaining an appropriate
balance between interest-sensitive assets and interest-sensitive liabilities
(interest rate sensitivity gap) and reducing Bancorporation's risk of major
changes in net interest income in periods of rapidly changing interest rates. A
negative gap (interest-sensitive liabilities greater than interest-sensitive
assets) in periods when interest rates are declining will tend to increase net
interest income. Conversely, a negative gap in periods when interest rates are
rising will tend to reduce net interest income. The net cumulative gap position
reflects Bancorporation's sensitivity to interest rate changes over time. This
calculation is a static measure and is not a prediction of net interest income.
Gap analysis is the simplest representation of Bancorporation's interest rate
sensitivity. It does not reveal the impact of factors such as administered
rates (e.g., the prime lending rate), pricing strategies on its consumer and
business deposits and changes in the balance sheet mix.

The objective of the asset/liability management process is to manage and
control the sensitivity of Bancorporation's income to changes in market
interest rates. This process is under the direction of the ALCO, comprised of
senior bank executives. The ALCO seeks to maximize earnings while ensuring that
the risks to those earnings from adverse movements in interest rates are kept
within specified limits deemed acceptable by Bancorporation. Accordingly, the
ALCO conducts comprehensive simulations of net interest income under a variety
of market interest rate scenarios. These simulations provide the ALCO with an
estimate of earnings at risk given changes in interest rates. While the ALCO
sees the opportunities and benefits of utilizing derivative financial
instruments such as, primarily interest rate swaps, caps and floors, to improve
the gap, it has elected not to use such instruments given the risk inherent in
such instruments.

As indicated in the interest rate sensitivity table below, the
twelve-month cumulative gap, representing the total net assets and liabilities
that are projected to reprice over the next twelve months, was liability
sensitive in the amount of $168.8 million at December 31, 1998 However, this
negative position remained within the acceptable parameters, of plus or minus
20% at 365 days, as listed in Bancorporation's Statement of Funds Policy. This
Statement is guided by asset quality, liquidity and earnings, and describes
Bancorporation's policy with respect to sources and uses of funds, dividends
and limitations on interbank liabilities. The responsibility for funds
management resides with the Chief Financial Officer with overall guidance
provided by the Chairman and President. Management continues to seek ways to
balance the gap position and reduce exposure to interest rate fluctuations.
Closely monitoring the volume of new fixed rate commercial loans and promotion
of our home equity line product have produced positive results in this effort
and management will continue to pursue these alternatives in 1999.

Table 17: Interest-Sensitivity Analysis as of December 31, 1998 (Dollars in
thousands)
<TABLE>
<CAPTION>
1-30 31-90 91-180 181-365 Non-Rate
Days Days Days Days Sensitive and
Sensitive Sensitive Sensitive Sensitive Over One Year Total
----------- ------------- ------------- ------------- --------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Earning Assets:
Loans ....................................... $413,549 $ 51,956 $ 70,127 $ 113,361 $ 924,076 $1,573,069
Investment securities ....................... 65,229 51,714 69,757 156,155 280,973 623,828
-------- ---------- ---------- ---------- ---------- ----------
Total earning assets ....................... $478,778 $ 103,670 $ 139,884 $ 269,516 $1,205,049 $2,196,897
Interest-Bearing Liabilities:
Savings and core time deposits .............. $124,611 $ 179,703 $ 237,519 $ 287,073 $ 715,400 $1,544,306
Time deposits of $100 thousand and over ..... 43,507 30,984 24,545 27,979 11,927 138,942
Short-term debt ............................. 204,702 - - - - 204,702
Long-term debt .............................. - - - - 50,000 50,000
-------- ---------- ---------- ---------- ---------- ----------
Total interest-bearing liabilities ......... 372,820 210,687 262,064 315,052 777,327 1,937,950
Other sources - net ......................... - - - - 258,947 258,947
-------- ---------- ---------- ---------- ---------- ----------
Total sources - net ......................... $372,820 $ 210,687 $ 262,064 $ 315,052 $1,036,274 $2,196,897
Interest-sensitivity gap .................... 105,958 (107,017) (122,180) (45,536) $ 168,775 -
-------- ---------- ---------- ----------
Cumulative interest-sensitive gap ........... $105,958 $ (1,059) $ (123,239) $ (168,775) - -
======== ========== ========== ==========
</TABLE>

15
<PAGE>

FIRST CITIZENS BANCORPORATION OF SOUTH CAROLINA, INC.

MARKET RATE RISK

In January 1997, the Securities and Exchange Commission adopted new rules
that require more comprehensive disclosures of accounting policies for
derivatives as well as enhanced quantitative and qualitative disclosures of
market risk for derivatives and other financial instruments. The market risk
disclosures must be presented for most financial instruments, classified into
two portfolios: financial instruments entered into for trading purposes and all
other financial instruments (non-trading purposes). Bancorporation holds no
derivative financial instruments and does not maintain a trading portfolio.

Table 18 summarizes the expected maturities and weighted average effective
yields and rates associated with Bancorporation's financial instruments. Cash
and cash equivalents, federal funds sold, federal funds purchased and
securities sold under agreements to repurchase are excluded from Table 18 as
their respective carrying values approximate their fair values. These financial
instruments generally expose Bancorporation to insignificant market risk as
they have either no stated maturities or an average maturity of less than 30
days and carry interest rates that approximate market rates. For further
information on the estimated fair value of financial instruments, see Note 16
to the consolidated financial statements.

Table 18: Market Risk Disclosure (Dollars in thousands)
<TABLE>
<CAPTION>
1999 2000 2001
------------- ------------- --------------
<S> <C> <C> <C>
Investment securities:
Fixed rate amount .............. $ 333,023 $ 269,215 $ 1,955
Weighted average yield ......... 5.94% 5.01% 6.75 %
Loans:
Fixed rate amount .............. $ 378,664 $ 238,901 $ 226.276
Weighted average yield ......... 8.41% 8.07% 7.99 %
Variable rate amount ........... $ 69,444 $ 17,343 $ 15,338
Weighted average yield ......... 8.25% 8.53% 8.40 %
Deposits:
Fixed rate amount .............. $ 956,200 $ 187,919 $ 187,210
Weighted average rate .......... 4.42% 2.96% 2.95 %
Long-term debt:
Variable rate amount ........... - - -
Weighted average rate .......... - - -

<CAPTION>
Estimated
Fair Value
2002 2003 Thereafter Year-end 1998
------------ ------------ ------------ --------------
<S> <C> <C> <C> <C>
Investment securities:
Fixed rate amount .............. $ 1,750 $ 4,917 $ 12,968 $ 639,643
Weighted average yield ......... 6.74% 7.50% 9.45% -
Loans:
Fixed rate amount .............. $187,110 $217,198 $160,308 $1,538,040
Weighted average yield ......... 7.92% 7.72% 7.92% -
Variable rate amount ........... $ 12,218 $ 10,673 $ 39,596 $ 166,442
Weighted average yield ......... 8.24% 8.21% 7.52% -
Deposits:
Fixed rate amount .............. $176,916 $174,913 $354,329 $2,078,293
Weighted average rate .......... 2.82% 2.79% 5.20% -
Long-term debt:
Variable rate amount ........... - - $ 50,000 $ 73,210
Weighted average rate .......... - - 8.25% -
</TABLE>

EARNINGS AND BALANCE SHEET ANALYSIS - 1997 COMPARED TO 1996 (Dollars in
thousands)

Net income was $21,770 for the year ended December 31, 1997, up 14.86%
from $18,954 earned for the year ended December 31, 1996. Earnings per share
was $23.24 compared to $20.02 in 1996. Return on average assets was 1.05% in
1997 compared to 1.04% for 1996.

Net interest income was $85,663 for the year ended December 31, 1997
increasing 11.74% from $76,665 for the year ended December 31, 1996. The net
interest margin decreased for the year ended December 31, 1997 to 4.54% from
4.62% for the year ended December 31, 1996. Despite a decrease in net interest
margin, net interest income increased as a result of growth in average earning
assets due to acquisitions and promotional activities.

The provision for loan losses was $4,241 and $4,574 for the year ended
December 31, 1997 and 1996, respectively. Reserve for loan losses totaled
$26,135 or 1.83% of gross loans and 956.98% of nonperforming loans compared to
1.85% of gross loans and 770.44% of nonperforming loans at December 31, 1996.

Average loans increased 12.74% to $1,243,256 as of December 31, 1997 up
from $1,191,431 as of December 31, 1996. The majority of growth occurred in
one-to-four family residential loans. Investment securities averaged $538,086
as of December 31, 1997 decreasing by $67,469 or 17.34% compared to December
31, 1996. Average temporary investments in federal funds increased to $28,167
at December 31, 1997 from $17,147 as of December 31, 1996 and represented 1.47%
and 1.01% of average earning assets in 1997 and 1996, respectively.

Total deposits averaged $1,751,791 as of December 31, 1997, an increase of
$181,776 or 11.58% compared to December 31, 1996. Core deposits increased
$205,669 or 13.36% to $1,745,084 as of December 31, 1997. The majority of the
growth occurred in Market Rate savings, NOW accounts and time deposits.

Noninterest income increased 11.34% to $24,781 for the year ended December
31, 1997 compared to $22,257 for the year ended December 31, 1996. The increase
in noninterest income was primarily due to an increase in service charges on
deposits and the repricing of charges, and an increase emphasis on collecting
service fees. Noninterest expense for the year ended December 31, 1997 was
$72,658 representing a 11.66% increase from December 31, 1996. Intangible
assets totaled $20,527 in 1997 which represents a $1,081 increase from $19,446
at December 31, 1996.

The average leverage capital ratio was 5.71% at December 31, 1997, up from
5.54% as of December 31, 1996. Total equity capital equaled 7.04% of total
assets at December 31, 1997 compared to 6.81% as of December 31, 1996.

16
<PAGE>

FIRST CITIZENS BANCORPORATION OF SOUTH CAROLINA, INC.

ACCOUNTING AND REGULATORY MATTERS (Dollars in thousands)

In June 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 130, "Reporting
Comprehensive Income", which requires that changes in the amounts of
comprehensive income items, currently reported as separate components of
equity, be shown in a financial statement, displayed as prominently as other
financial statements. The most common components of other comprehensive income
include foreign currency translation adjustments, minimum pension liability
adjustments and/or unrealized gains and losses on available-for-sale
securities. SFAS No. 130 does not require a specific format for the new
financial statement, but does require that an amount representing total
comprehensive income be reported. Bancorporation adopted SFAS No. 130 in 1998,
and it has had no material effect on current or prior periods presented.

In June 1997, the FASB issued SFAS No. 131, "Disclosure about Segments of
an Enterprise and Related Information", which establishes new standards for
segment reporting. SFAS No. 131 requires reporting of certain information about
operating segments in complete sets of financial statements of the enterprise
and in condensed financials statements of interim periods issued to
shareholders. It also requires that public enterprises report certain
information about their products and services, the geographic areas in which
they operate and their major customers. SFAS No. 131 is effective for fiscal
years beginning after December 15, 1997 and was adopted by Bancorporation in
1998. Disclosures regarding the business segments are included in "Notes to
Consolidated Financial Statements" (Note 1).

In February 1998, the FASB issued SFAS No. 132 "Employers Disclosures
about Pensions and Other Postretirement Benefits", an amendment of SFAS Nos.
87, 88 and 106. SFAS No. 132 revises employers' disclosures about pensions and
other postretirement benefit plans. It does not change the measurement or
recognition of those plans. SFAS No. 132 is effective for fiscal years
beginning after December 15, 1997 and has been adopted by Bancorporation in
1998. The effects of adoption are not material.

In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities". SFAS No. 133 requires that all derivative
instruments be recorded on the balance sheet at their fair value. Changes in
the fair value of derivatives are recorded each period in current earnings or
other comprehensive income depending on whether a derivative is designated as
part of a hedge transaction and, if it is, the type of hedge transaction.
Although Bancorporation does not have derivative instruments, management, as of
January 1, 1999, has elected to transfer the U.S. Government obligations
portion of its held-to-maturity securities into the available-for-sale
category, which is allowed as a provision in SFAS No. 133. The total to be
transferred to the available-for-sale category will be $568,944 with an
adjustment to stockholders' equity for $1,854, net of tax effect of $998.

In October 1998, the FASB issued SFAS No. 134, "Accounting for Mortgage
Backed Securities Retained After the Securitization of Mortgages Held for Sales
by a Mortgage Banking Enterprise." SFAS No. 134 requires that after an entity
that is engaged in mortgage banking activities has securitized mortgage loans
that are held-for-sale, it must classify the resulting mortgage-backed
securities or other retained interests based on its ability and intent to sell
or hold those investments. The statement is effective for fiscal years
beginning after December 15, 1998, and Bancorporation plans to adopt SFAS No.
134 in 1999.

YEAR 2000 (Dollars in thousands)

General - The Year 2000 ("Y2K") issue confronting Bancorporation and its
suppliers, customers, customers' suppliers and competitors centers on the
inability of computer systems to recognize the year 2000. Many existing
computer programs and systems originally were programmed with six digit dates
that provided only two digits to identify the calendar year in the date field.
With the impending new millennium, these programs and computers may recognize
"00" as the year 1900 rather than the year 2000. Problems may also arise from
other sources as well, such as the use of special codes and conventions in
software that make use of the date field.

Financial institution regulators recently have increased their focus upon
Y2K compliance issues and have issued guidance concerning the responsibilities
of senior management and directors. The Federal Financial Institutions
Examination Council ("FFIEC") has issued several interagency statements on Y2K
Project Management Awareness. These statements require financial institutions
to, among other things, examine the Y2K implications of their reliance on
vendors with respect to data exchange and the potential impact of the Y2K issue
on their customers, suppliers and borrowers. These statements also require each
federally regulated financial institution to survey its exposure, measure its
risk and prepare a plan to address the Y2K issue. In addition, the federal
banking regulators have issued safety and soundness guidelines to be followed
by insured depository institutions, such as the Bank, to assure resolution of
any Y2K problems. The federal banking regulators have asserted that Y2K testing
and certification is a key safety and soundness issue in conjunction with
regulatory exams and, thus, that an institution's failure to address
appropriately the Y2K issue could result in supervisory action, including the
reduction of the institution's supervisory ratings, the denial of applications
for approval of mergers or acquisitions, or the imposition of civil money
penalties.

Risks - Like most financial service providers, Bancorporation and its
operations may be significantly affected by the Y2K issue due to its dependence
on information technology and date-sensitive data. Computer hardware, software
and other equipment, both within and outside Bancorporation's direct control,
and third parties with whom Bancorporation electronically or operationally
interfaces (including, without limitation its customers and third party
vendors) are likely to be affected. If computer systems are not modified to
identify the year 2000, many computer applications could fail or create
erroneous results. As a result, many calculations which rely on date field
information, such as interest payments or due dates and other operating
functions, could generate results which are significantly misstated, and
Bancorporation could experience an inability to process transactions, prepare
statements or engage in similar normal business activities. Likewise, under
certain circumstances, a failure to adequately address the Y2K issue could
adversely affect the viability of Bancorporation's suppliers and creditors and
the creditworthiness of its borrowers. If not adequately addressed, the Y2K
issue could result in a significant adverse impact on Bancorporation's
operations and, in turn, its financial condition and results of operations.

17
<PAGE>

FIRST CITIZENS BANCORPORATION OF SOUTH CAROLINA, INC.

Costs - Bancorporation is determined to use all resources required to
resolve any significant Y2K issues. Bancorporation's estimated aggregate
expenses associated with Y2K matters are $3,000. This includes costs directly
related to solving Y2K problems, such as modifying software and hiring Y2K
consultants. The Y2K budget for 1998 was increased to $1,151 from $535 in the
third quarter of 1998. The remaining Y2K budget through the year 2000 is
$1,849. Expenses for the year ended December 31, 1998 were $880. Bancorporation
is expensing all costs associated with required system changes as those costs
are incurred and such costs are being funded through operating cash flows.

Awareness - During March 1997, Bancorporation developed its plan to
address the Y2K issue. Bancorporation hired consultants to direct Y2K
compliance efforts. A Y2K Program Office ("PMO") consisting of in-house
personnel is responsible for leading the overall Y2K process. The PMO is
supported by the Executive Steering Committee ("Committee"), a group of senior
managers within the organization that is chaired by the Chief Financial
Officer. Both the PMO and the Committee meet monthly to review Y2K progress. A
substantial portion of Bancorporation's data processing functions are performed
by First Citizens Bank & Trust Company, Raleigh, North Carolina ("FCBNC") on
its mainframe systems and/or systems supported by FCBNC. The PMO meets
bi-monthly with FCBNC to monitor the status of their compliance efforts.
Quarterly progress reports are made to Bancorporation's Board of Directors on
the overall Y2K Program progress.

Assessment - During the assessment phase of Bancorporation's Y2K plan, all
systems were categorized as mainframe systems or non-mainframe systems, and as
information technology ("IT") systems or non-IT systems. Further, each system
was assigned to one of the following priority groups:

1. Mission Critical - Significantly impacts external customers, regulatory
reporting, or solvency.

2. Operationally Dependent - Impacts the amount of time, effort or type of
equipment used to accomplish the task.

3. Supporting Function - Assists in service delivery.

A general plan for dealing with each system was developed and
responsibilities for each system were assigned to the appropriate personnel.
This phase has been completed.

Remediation - For each system, a determination was made as to whether a
system modification, upgrade or replacement was necessary to achieve Y2K
compliance, or whether the system was already Y2K compliant. For IT mainframe
systems, FCBNC has remediated all applicable software.

For IT non-mainframe systems, FCBSC's outside consultant is responsible
for coordinating remediation with Bancorporation's staff, which, in most cases,
entails the installation of upgrades provided by outside vendors. Of 90
non-mainframe systems, 54 have been remediated and tested as of December 31,
1998.

Non-IT systems are more difficult to analyze for Y2K compliance and are
dependent on vendor feedback to determine what will be necessary to achieve Y2K
compliance. Bancorporation has mailed 101 environmental letters, involving
heating, air conditioning, utilities, etc, to vendors with respect to its
mission critical non-IT systems, which responses were due by December 31, 1998.
64 have replied that they are compliant and the remaining 37 responded that
they would be compliant by June 1999. Bancorporation's Steering Committee will
determine in the first quarter of 1999 the action to take on the operationally
dependent and supporting non-IT systems.

Confirmation - To prove that the new, modified or updated systems are Y2K
compliant, testing is performed in an isolated environment to ensure that all
date sensitive data is accurately processed. Bancorporation, in conjunction
with FCBNC, is testing all systems with a minimum of three dates of December
31, 1999, January 3, 2000 and February 29, 2000. Additional dates are tested,
if needed, to complete testing of each system.

There are 34 mainframe applications to be tested. As of December 31, 1998,
25 have been tested. The remaining 9 are in process of being tested.
Bancorporation has completed 58% of its testing on all applications, including
60% of Mission Critical applications, as of December 31, 1998. Testing on all
remaining applications is due to be completed in the first half of 1999.

During early 1998, Bancorporation identified commercial credit customers
whose existing aggregate borrowings from the Bank exceeded $300. Discussions
have been held with each borrowing customer to assess the customer's plan for
and progress toward addressing the Y2K issue. Each customer was weighted as a
high, medium or low risk based on the results of the discussions. These ratings
were based on the customer's preparedness, vulnerability and plans for Y2K
systems. Customers rated in the medium to high risk categories will be followed
up and monitored on a periodic basis. Based on these discussions,
Bancorporation's management does not believe that the impact of the Y2K issue
on its commercial loan portfolio will be material. Consumer customers are not
being monitored for Y2K as most of the loans are secured with collateral and
losses, should they occur, are not expected to be material.

An analysis has been performed to determine the readiness of the Bank's
large deposit base customers (over $500), as related to Y2K issues. A letter
and questionnaire were developed and mailed to customers on June 15, 1998, to
be completed and returned by June 30, 1998. Out of 143 customers, 65, or 45%,
responded. An overall review of the responses indicates awareness of the Y2K
issue and that actions are being implemented to address those issues. While
customers profess their readiness, they are still subject to the availability
and readiness of vendors and suppliers. A review of large deposit base
customers is being performed as of December 31, 1998 and compared to the June
information. Bancorporation's Committee will make a determination in the first
half of 1999 whether further action is needed.

Bancorporation has reviewed its liquidity needs in terms of being able to
respond to deposit base erosion as a result of Y2K concerns. Lines of credit
have been established at other financial institutions to provide a potential
source of funds and authority has been received from the Executive Committee of
Bancorporation's Board of Directors to use the Federal Reserve Discount window
as a source of funds, if needed.

Contingency Plans - As of December 31, 1998, contingency plans for
operational functions have been established to insure continued operation in
critical areas. Bancorporation is currently tying individual contingency plans
to the core business processes to determine minimum requirements to provide our
customers with adequate service. Crisis management contingency plans for
uncontrollable functions, such as phone, water and electrical services, are 90%
complete as of December 31, 1998. Completion is pending on outside vendor
testing dates and responses concerning the vendors' contingency plans.

18
<PAGE>

FIRST CITIZENS BANCORPORATION OF SOUTH CAROLINA, INC.

SELECTED UNAUDITED QUARTERLY FINANCIAL DATA (Dollars in thousands - except per
share data)
<TABLE>
<CAPTION>
First Quarter Second Quarter
-------------------------------------- --------------------------------------
1998 1997 1996 1998 1997 1996
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Interest income and fees ........ $ 40,002 $ 35,292 $ 32,198 $ 41,463 $ 37,097 $ 32,686
Interest expense ................ (17,529) (15,321) (14,246) (18,541) (15,998) (13,925)
--------- --------- --------- --------- --------- ---------
Net interest income ............. 22,473 19,971 17,952 22,922 21,099 18,761
Provision for loan losses ....... (281) (997) (1,020) (2,001) (1,403) (1,290)
Noninterest income .............. 6,642 5,601 4,872 7,275 5,909 5,270
Noninterest expense ............. (19,091) (17,097) (15,212) (19,567) (18,025) (15,702)
--------- --------- --------- --------- --------- ---------
Income before income taxes ...... 9,743 7,478 6,592 8,629 7,580 7,039
Applicable income taxes ......... (3,424) (2,670) (2,432) (2,965) (2,686) (2,387)
--------- --------- --------- --------- --------- ---------
Net income ...................... $ 6,319 $ 4,808 $ 4,160 $ 5,664 $ 4,894 $ 4,652
========= ========= ========= ========= ========= =========
Net income per common share ..... $ 6.80 $ 5.13 $ 4.38 $ 6.01 $ 5.22 $ 4.90
</TABLE>
<TABLE>
<CAPTION>
Third Quarter Fourth Quarter
-------------------------------------- --------------------------------------
1998 1997 1996 1998 1997 1996
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Interest income and fees ........ $ 41,806 $ 38,877 $ 34,389 $ 42,100 $ 39,871 $ 34,944
Interest expense ................ (18,626) (16,829) (14,574) (18,336) (17,326) (14,807)
--------- --------- --------- --------- --------- ---------
Net interest income ............. 23,180 22,048 19,815 23,764 22,545 20,137
Provision for loan losses ....... (1,432) (448) (1,513) (589) (1,393) (751)
Noninterest income .............. 7,334 6,424 5,571 7,656 6,847 6,544
Noninterest expense ............. (20,297) (18,280) (17,167) (21,654) (19,256) (16,992)
--------- --------- --------- --------- --------- ---------
Income before income taxes ...... 8,785 9,744 6,706 9,177 8,743 8,938
Applicable income taxes ......... (2,999) (3,409) (2,354) (3,328) (3,010) (3,148)
--------- --------- --------- --------- --------- ---------
Net income ...................... $ 5,786 $ 6,335 $ 4,352 $ 5,849 $ 5,733 $ 5,790
========= ========= ========= ========= ========= =========
Net income per common share ..... $ 6.20 $ 6.77 $ 4.59 $ 6.29 $ 6.12 $ 6.15
</TABLE>

19
<PAGE>

FIRST CITIZENS BANCORPORATION OF SOUTH CAROLINA, INC.

REPORT OF MANAGEMENT

The consolidated financial statements of First Citizens Bancorporation of
South Carolina, Inc. and other financial information presented in the annual
report were prepared by management which is responsible for the integrity of
the information presented. The consolidated statements have been prepared in
conformity with generally accepted accounting principles and include amounts
that are based on management's best estimates and judgments.

Bancorporation's independent accountants, PricewaterhouseCoopers LLP, are
engaged to provide an objective, independent review as to the fairness of
reported operating results and financial condition. They have an understanding
of Bancorporation's accounting and financial controls and conduct such tests
and related procedures as they deem appropriate to arrive at an opinion on the
fairness of the consolidated financial statements. Their opinion is included in
this annual report. Management has made available to PricewaterhouseCoopers LLP
all Bancorporation's financial records and related data, as well as the minutes
of stockholders' and directors' meetings. Management believes that its
representations made to PricewaterhouseCoopers LLP during the audit were valid
and appropriate.

Bancorporation maintains accounting and control systems which it believes
provide reasonable assurance that financial records are adequate and can be
relied upon to permit the preparation of consolidated financial statements in
conformity with generally accepted accounting principles and that assets are
protected from unauthorized use or disposition. Management recognizes the
limitations inherent in any system of internal control, as the cost of controls
should not exceed the benefits derived. Management believes Bancorporation's
system provides an appropriate balance and is adequate to accomplish the
objectives discussed herein. In order to monitor compliance with its system of
internal controls, Bancorporation maintains an internal audit program that
assesses the effectiveness of internal controls and recommends possible
improvements thereto. Management has considered the internal auditors' and
PricewaterhouseCoopers LLP's recommendations concerning Bancorporation's system
of internal controls and has taken actions that are believed to respond
appropriately to these recommendations.

The Audit Committee of the Board of Directors meets regularly with
management, the internal auditors and the independent accountants to review
audit scopes, audit reports, and fee arrangements. Both the internal auditors
and independent accountants have access to the Audit Committee without any
management present in the discussions. Independent accountants are recommended
by the Audit Committee for selection by the Board of Directors.

The management of Bancorporation is committed to a philosophy of high
ethical standards in the conduct of its business. Written policies covering
conflicts of interest, community affairs and other subjects are formulated in a
Code of Conduct, which is uniformly applicable to all officers and employees of
Bancorporation.

REPORT OF INDEPENDENT ACCOUNTANTS

PRICEWATERHOUSECOOPERS [LOGO]

TO THE BOARD OF DIRECTORS AND STOCKHOLDERS
OF FIRST CITIZENS BANCORPORATION OF SOUTH CAROLINA, INC.

In our opinion, the accompanying consolidated statements of condition and
the related consolidated statements of income, of changes in stockholders'
equity and comprehensive income and of cash flows present fairly, in all
material respects, the financial position of First Citizens Bancorporation of
South Carolina, Inc. and its subsidiaries at December 31, 1998 and 1997, and
the results of their operations and their cash flows for each of the three
years in the period ended December 31, 1998, in conformity with generally
accepted accounting principles. These financial statements are the
responsibility of Bancorporation's management; our responsibility is to express
an opinion on these financial statements base on our audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.

PricewaterhouseCoopers LLP

/s/ PRICEWATERHOUSECOOPERS LLP

Columbia, South Carolina
January 25, 1999

20
<PAGE>

FIRST CITIZENS BANCORPORATION OF SOUTH CAROLINA, INC.

CONSOLIDATED STATEMENTS OF CONDITION
(Dollars in thousands-except par value)
<TABLE>
<CAPTION>
December 31,
---------------------------
1998 1997
------------- -------------
<S> <C> <C>
Assets
Cash and due from banks (Note 2) ......................................................... $ 115,795 $ 126,276
Interest-bearing deposits in financial institutions ...................................... - 7,700
Investment securities (Note 3):
Held-to-maturity, at amortized cost (fair value of $594,469 in 1998 and $558,297 in 591,286 556,496
1997)
Available-for-sale, at fair value ....................................................... 32,542 31,913
---------- ----------
Total investment securities ............................................................ 623,828 588,409
Federal funds sold ....................................................................... 64,000 11,900
Gross loans (Note 4) ..................................................................... 1,573,069 1,428,437
Less: Reserve for loan losses (Note 5) .................................................. (28,306) (26,135)
---------- ----------
Net loans ................................................................................ 1,544,763 1,402,302
Premises and equipment (Note 6) .......................................................... 79,146 59,788
Other real estate owned .................................................................. 402 572
Interest receivable ...................................................................... 14,854 14,561
Intangible assets (Note 7) ............................................................... 17,167 20,527
Other assets ............................................................................. 23,813 18,442
---------- ----------
Total Assets ............................................................................ $2,483,768 $2,250,477
========== ==========
Liabilities
Deposits (Note 8):
Demand .................................................................................. $ 354,239 $ 346,934
Time and savings ........................................................................ 1,683,248 1,532,486
---------- ----------
Total deposits ........................................................................... 2,037,487 1,879,420
Securities sold under agreements to repurchase ........................................... 204,702 184,168
Long-term debt (Note 11) ................................................................. 50,000 14,483
Other liabilities ........................................................................ 17,404 13,988
---------- ----------
Total Liabilities ....................................................................... 2,309,593 2,092,059
---------- ----------
Commitments and contingencies (Note 14)
Stockholders' Equity (Note 12)
Preferred stock ......................................................................... 3,282 3,282
Non-voting common stock - $5.00 par value, authorized 1,000,000; issued and outstanding
1998 and 1997 - 36,409 ................................................................. 182 182
Voting common stock-$5.00 par value, authorized 2,000,000; issued and outstanding
1998 - 885,275 and 1997 - 892,813 ...................................................... 4,426 4,464
Surplus ................................................................................. 55,000 55,000
Undivided profits ....................................................................... 102,888 82,287
Accumulated other comprehensive income, net of taxes .................................... 8,397 13,203
---------- ----------
Total Stockholders' Equity ............................................................. 174,175 158,418
---------- ----------
Total Liabilities and Stockholders' Equity ............................................. $2,483,768 $2,250,477
========== ==========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

21
<PAGE>

FIRST CITIZENS BANCORPORATION OF SOUTH CAROLINA, INC.

Consolidated Statements of Income
(Dollars in thousands-except per share data)
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------------
1998 1997 1996
------------- ------------- -------------
<S> <C> <C> <C>
Interest income
Interest and fees on loans .................................. $ 129,415 $ 118,427 $ 104,351
Interest on investment securities:
Taxable ................................................... 31,583 28,575 26,080
Non-taxable ............................................... 1,567 1,990 2,082
Interest-bearing deposits in financial institutions ......... 255 642 809
Federal funds sold .......................................... 2,551 1,503 895
--------- --------- ---------
165,371 151,137 134,217
Interest expense
Deposits (Note 8) ........................................... 60,257 56,844 51,170
Short-term borrowings ....................................... 9,199 7,762 5,523
Long-term debt (Note 11) .................................... 3,576 868 859
--------- --------- ---------
73,032 65,474 57,552
Net interest income .......................................... 92,339 85,663 76,665
Provision for loan losses (Note 5) ........................... 4,303 4,241 4,574
--------- --------- ---------
Net interest income after provision for loan losses .......... 88,036 81,422 72,091
Noninterest income
Service charges on deposit accounts ......................... 16,371 14,426 12,114
Commission and fees from fiduciary activities ............... 1,531 1,298 958
Fees for other customer services ............................ 2,219 2,149 2,330
Mortgage servicing .......................................... 2,211 2,186 2,019
Bankcard discount and fees .................................. 3,240 2,789 2,334
Insurance premiums earned ................................... 1,879 1,474 1,125
Gain on sale of investment securities ....................... 36 51 792
Other ....................................................... 1,420 408 585
--------- --------- ---------
28,907 24,781 22,257
Noninterest expense
Salaries and employee benefits (Note 13) .................... 36,674 32,752 28,697
Net occupancy expense (Note 6) .............................. 5,443 4,684 4,050
Furniture and equipment expense (Note 6) .................... 5,594 4,580 3,777
Stationery and supplies ..................................... 1,434 1,464 1,406
Telephone ................................................... 1,729 1,479 1,372
Amortization of intangibles (Note 7) ........................ 6,886 8,650 7,172
Bankcard processing fees .................................... 3,698 2,823 2,337
Data processing fees ........................................ 6,540 5,690 5,270
Other ....................................................... 12,611 10,536 10,992
--------- --------- ---------
80,609 72,658 65,073
Income before income taxes ................................... 36,334 33,545 29,275
Income tax expense (Note 9) .................................. 12,716 11,775 10,321
--------- --------- ---------
Net income ................................................... $ 23,618 $ 21,770 $ 18,954
========= ========= =========
Net income per common share - basic and diluted (Note 1) ..... $ 25.30 $ 23.24 $ 20.02
Weighted average common shares outstanding ................... 926,744 929,222 938,320
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

22
<PAGE>

FIRST CITIZENS BANCORPORATION OF SOUTH CAROLINA, INC.

Consolidated Statements of Changes in Stockholders' Equity and Comprehensive
Income
(Dollars in thousands)
<TABLE>
<CAPTION>
Non- Accumulated Total
Voting Voting Other Stock-
Preferred Common Common Undivided Comprehensive holders'
Stock Stock Stock Surplus Profits Income (Loss) Equity
----------- -------- ---------- --------- ----------- --------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1995 ....... $3,282 $ 254 $4,464 $55,000 $ 43,152 $ 5,934 $112,086
Comprehensive Income:
Net income ......................... 18,954
Change in unrealized gain on
investment securities available-
for-sale, net of taxes of $1,944... 3,091
Total comprehensive income ......... 22,045
Reacquired non-voting common
stock ............................. (72) (1,247) (1,319)
Preferred stock dividends .......... (171) (171)
-------- -------- -------- -------- -------- -------- --------
Balance at December 31, 1996 ....... 3,282 182 4,464 55,000 60,688 9,025 132,641
Comprehensive Income:
Net income ......................... 21,770
Change in unrealized gain on
investment securities available-
for-sale, net of taxes of $2,250 .. 4,178
Total comprehensive income ......... 25,948
Preferred stock dividends .......... (171) (171)
-------- -------- -------- -------- -------- -------- --------
Balance at December 31, 1997 ....... 3,282 182 4,464 55,000 82,287 13,203 158,418
Comprehensive Income:
Net income ......................... 23,618
Change in unrealized gain on
investment securities available-
for-sale, net of benefit of $2,588. (4,806)
Total comprehensive income ......... 18,812
Reacquired voting common stock ..... (38) (2,846) (2,884)
Preferred stock dividends .......... (171) (171)
-------- -------- -------- -------- -------- -------- --------
Balance at December 31, 1998 ....... $3,282 $ 182 $4,426 $55,000 $102,888 $ 8,397 $174,175
====== ===== ====== ======= ======== ======== ========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

23
<PAGE>

FIRST CITIZENS BANCORPORATION OF SOUTH CAROLINA, INC.

Consolidated Statements of Cash Flows
(Dollars in thousands)
<TABLE>
<CAPTION>
Year Ended December 31,
---------------------------------------
1998 1997 1996
------------- ------------ ------------
<S> <C> <C> <C>
Cash Flows From Operating Activities:
Net income .......................................................................... $ 23,618 $ 21,770 $ 18,954
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses .......................................................... 4,303 4,241 4,574
Depreciation and amortization ...................................................... 12,853 13,289 10,843
Amortization (accretion) of investment securities .................................. 241 (94) (228)
Deferred income tax benefit ........................................................ (3,107) (1,706) (2,025)
Gains on sales of premises and equipment ........................................... (19) - (126)
(Increase) decrease in interest income receivable .................................. (1,868) 36 1,203
Decrease in accrued interest payable ............................................... (164) (69) (502)
Origination of mortgage loans held-for-resale ...................................... (158,710) (74,178) (65,199)
Proceeds from sales of mortgage loans held-for-resale .............................. 151,082 79,142 60,650
Gains on sales of mortgage loans held-for-resale ................................... (448) (219) (174)
Gain on sale of securities ......................................................... (36) (51) (792)
Decrease (increase) in other assets ................................................ 2,250 (3,195) (515)
Increase (decrease) in other liabilities ........................................... 3,580 1,385 (1,845)
---------- ---------- ----------
Net Cash Provided By Operating Activities .......................................... 33,575 40,351 24,818
Cash Flows From Investing Activities:
Net increase in loans ............................................................... (138,646) (153,256) (130,565)
Proceeds from maturities of investment securities, held-to-maturity ................. 120,501 248,963 47,200
Purchases of investment securities, held-to-maturity ................................ (155,496) (337,516) (62,975)
Proceeds from sale of securities, available-for-sale ................................ - - 1,048
Purchases of securities, available-for-sale ......................................... (8,066) (7,863) -
Net decrease in interest-bearing deposits in financial institutions ................. 7,700 3,600 1,375
Federal funds sold .................................................................. (52,100) (11,900) -
Proceeds from sales of premises and equipment ....................................... 2,382 1,135 970
Purchases of premises and equipment ................................................. (27,350) (14,011) (10,044)
Decrease (increase) in other real estate owned ...................................... 170 (54) (45)
Increase in intangible assets ....................................................... (1,089) (663) (446)
Purchase of institutions, net of cash acquired ...................................... 20,675 82,788 65,326
---------- ---------- ----------
Net Cash Used By Investing Activities .............................................. (231,319) (188,777) (88,156)
Cash Flows From Financing Activities:
Net increase in deposits ............................................................ 134,267 115,269 67,096
Increase in federal funds purchased and securities sold under agreements to
repurchase ......................................................................... 20,534 51,277 14,384
Net increase in other short term borrowing .......................................... 2,000 - -
Net increase in long term borrowing ................................................. 50,000 6,983 -
Principal repayments on long-term borrowing ......................................... (16,483) (2,500) (1,700)
Cash dividends paid ................................................................. (171) (171) (171)
Reacquired common stock ............................................................. (2,884) - (1,319)
---------- ---------- ----------
Net Cash Provided By Financing Activities .......................................... 187,263 170,858 78,290
(Decrease) increase in cash and due from banks ....................................... (10,481) 22,432 14,952
Cash and due from banks at beginning of year ......................................... 126,276 103,844 88,892
---------- ---------- ----------
Cash and due from banks at end of year ............................................... $ 115,795 $ 126,276 $ 103,844
========== ========== ==========
Supplemental disclosures of cash flow information:
Interest paid ....................................................................... $ 72,868 $ 64,090 $ 57,302
Income taxes paid ................................................................... $ 16,042 $ 13,599 $ 12,640
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

24
<PAGE>

FIRST CITIZENS BANCORPORATION OF SOUTH CAROLINA, INC.

FIRST CITIZENS BANCORPORATION OF SOUTH CAROLINA, INC. AND SUBSIDIARY
("Bancorporation")
FIRST CITIZENS BANCORPORATION OF SOUTH CAROLINA, INC. ("Parent")
FIRST-CITIZENS BANK AND TRUST COMPANY OF SOUTH CAROLINA AND SUBSIDIARY ("Bank")

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
Nature of Operations:

First Citizens Bancorporation of South Carolina, Inc. is a one bank
holding company whose principal subsidiary is First-Citizens Bank and Trust
Company of South Carolina ("Bank"). First Citizens Bank is chartered under the
laws of South Carolina to engage in general banking business. First Citizens
Bank offers a complete array of services in commercial banking through its 132
offices in 88 communities in South Carolina. First Citizens Bank provides a
full range of financial services including accepting deposits, corporate cash
management, discount brokerage, IRA plans, trust services and secured and
unsecured loans. Trust services include estate planning, estate and trust
administration, IRA trust and personal investment, pension and profit sharing
accounts. First Citizens Bank originates and services mortgage loans and
provides financing for small businesses.

The accounting and reporting policies of First Citizens Bancorporation of
South Carolina, Inc. and its primary subsidiary, First-Citizens Bank and Trust
Company of South Carolina, reflect industry practices and conform to generally
accepted accounting principles in all material respects.

Note 1 - Summary of Significant Accounting Policies (Dollars in thousands)

Principles of Consolidation and Basis of Presentation:

The consolidated financial statements include the accounts of First
Citizens Bancorporation of South Carolina, Inc., its wholly-owned subsidiaries,
First-Citizens Bank and Trust Company of South Carolina (and its wholly-owned
subsidiary, Wateree Life Insurance Company) and FCB/SC Capital Trust
I,(collectively "Bancorporation"). All significant intercompany accounts and
transactions have been eliminated.

Assets held by the Bank in trust or in other fiduciary capacities are not
assets of the Bank and are not included in the accompanying consolidated
financial statements. Certain amounts in prior years have been reclassified to
conform to the 1998 presentation.

Significant Estimates:

In preparing the consolidated financial statements, management is required
to make estimates based on available information which can affect the reported
amounts of assets and liabilities as of the balance sheet date and revenues and
expenses for the related periods. Because of the inherent uncertainties
associated with any estimation process and due to possible future changes in
market and economic conditions, it is possible that actual future results could
differ from the amounts reflected in the consolidated financial statements.

Acquisitions:

Two branch locations were acquired during the year from another South
Carolina financial institution. The Bank acquired deposits of $23,774, loans of
$42 and goodwill of $2,519 in connection with this acquisition in 1998. In
1997, six branch locations were acquired from other financial institutions.
Deposits of $102,934, loans of $11,707 and goodwill of $9,068 were recorded by
the Bank in connection with these acquisitions.

Investment Securities:

Statement of Financial Accounting Standards ("SFAS") No. 115, "Accounting
for Certain Investments in Debt and Equity Securities", requires that debt and
equity securities with readily determinable market values be carried at fair
value unless they are intended to be held to maturity. Bancorporation defines
held-to-maturity securities as debt securities, which management has the
positive intent and ability to hold to maturitity. Held-to-maturity securities
are stated at cost, adjusted for amortization of premiums and accretion of
discounts. Trading securities are recorded at market value. Unrealized gains
and losses on trading securities are included in earnings. Available-for-sale
securities are defined as equity securities and debt securities not classified
as trading securities or held-to-maturity securities. Available-for-sale
securities are recorded at fair value with unrealized holding gains and losses,
net of deferred taxes and reported as a separate component of shareholders'
equity as accumulated other comprehensive income. Bancorporation determines the
appropriate classification of debt securities at the time of purchase. The cost
of securities is based on the specific identification method.

Loans and Reserve for Loan Losses:

SFAS No. 114, "Accounting by Creditors for Impairment of a Loan," requires
loans to be measured for impairment when it is probable that all amounts,
including principal and interest, will not be collected in accordance with the
contractual terms of the loan agreement. It generally requires impairment to be
measured on the basis of discounted expected cash flows. It is Bancorporation's
policy to apply the provisions of SFAS No. 114 to all nonaccrual loans on a
loan by loan basis.

Loans are recorded at their principal amount outstanding. Interest is
accrued and recognized in operating income based upon the principal amount
outstanding. Loan origination fees and direct loan origination costs are
deferred and amortized over the estimated lives of the related loans as an
adjustment to yield. Unamortized net deferred loan costs included in loans at
December 31, 1998 and 1997 were $182 and $303, respectively.

In many lending transactions, collateral is obtained to provide an
additional measure of security. Generally, the cash flow and earnings power of
the borrower represent the primary source of repayment and collateral is
considered as an additional safeguard on an acceptable risk. The need for
collateral is determined on a case-by-case basis after considering the current
and prospective credit worthiness of the borrower, terms of the lending
transaction and economic conditions.

25
<PAGE>

FIRST CITIZENS BANCORPORATION OF SOUTH CAROLINA, INC.

The accrual of interest is generally discontinued, except for installment
and credit card loans, when substantial doubt exists as to the collectibility
of principal and interest or when a loan is 90 days past due as to interest or
principal. Generally, accrual of income on installment and credit card loans is
discontinued and the loans are charged off after a delinquency of 120 days for
unsecured loans and 180 days for secured loans and credit card loans.

Loans, or the portion thereof considered uncollectable, are charged to the
reserve for loan losses. The reserve for loan losses is maintained at a level
which is considered adequate to provide for losses inherent in the loan
portfolio based upon management's evaluation of known and inherent risk
characteristics, the fair value of underlying collateral, recent loan loss
experience, current economic conditions and other pertinent factors. A
provision for loan losses is charged to operations based on management's
periodic evaluation of these risks.

Mortgage Banking Activities:

Mortgage loans held-for-resale are stated at the lower of aggregate cost
or market, net of discounts and deferred loan fees and are included in Net
loans in the Consolidated Statements of Condition. Nonrefundable deferred
origination fees and costs and discount points collected at loan closing, net
of commitment fees paid, are deferred and recognized at the time of sale of the
mortgage loans. Gain or loss on sales of mortgage loans is recognized based
upon the difference between the selling price and the carrying amount of the
mortgage loans sold. Other fees earned during the loan origination process are
also included in net gain or loss on sales of mortgage loans.

Mortgage Servicing Rights ("MSRs") are included in Intangible assets in
the Consolidated Statements of Condition and are amortized based on a method
which approximates the proportion of current net servicing income to the total
estimated net servicing income expected to be recognized over the average
estimated remaining lives of the underlying loans. Capitalized MSRs are
assessed for impairment based on their fair values.

SFAS No. 125 "Accounting for Transfers and Servicing of Financial Assets
and Extinguishments of Liabilities", requires an entity, after a transfer of
financial assets, to recognize the financial and servicing assets it controls
and the liabilities it has incurred, derecognizes financial assets when control
has been surrendered, and derecognize liabilities when extinguished. The
statement provides consistent standards for distinguishing transfers of
financial assets that are sales from transfers that are secured borrowings. The
effect of adopting SFAS No. 125 was not material to the consolidated financial
statements.

Premises and Equipment:

Bank premises and equipment are reported at cost less accumulated
depreciation. Depreciation is included in noninterest expense over the
estimated useful lives of the assets (generally five to twenty-five years for
buildings and improvements, and three to seven years for furniture and
equipment). Leasehold improvements are capitalized and amortized to noninterest
expense over the terms of the leases or the estimated useful lives of the
improvements, whichever is shorter. Depreciation and amortization are
calculated using straight-line and accelerated methods. Maintenance, repairs
and minor improvements are included in noninterest expense as incurred. Major
improvements are capitalized. Gains or losses upon retirement or other
dispositions are included in the results of operations.

Other Real Estate Owned:

Other real estate owned consists of real property acquired through
foreclosure or deed-in-lieu of foreclosure and is carried at the lower of (1)
the recorded amount of the loan for which the foreclosed property previously
served as collateral, or (2) the current fair value of the property, minus
estimated selling costs. Subsequent to foreclosure, gains or losses on the
sales or the periodic revaluation of other real estate owned are credited or
charged to expense. Net costs of maintaining and operating foreclosed
properties are expensed as incurred.

Intangible Assets:

Goodwill is recorded when Bancorporation consummates branch acquisitions,
based on the difference between the purchase price and the fair value of the
assets acquired. Goodwill is amortized over the 5 year life of the related
assets using the straight-line method of amortization.

Securities Sold Under Agreements to Repurchase:

Securities sold under agreements to repurchase represent overnight
borrowings with the Bank's customers and are secured by investment securities.
The average rate on these borrowings was 4.73%, 4.86% and 4.81% for 1998, 1997
and 1996, respectively.

Income Taxes:

When income and expenses are recognized in different periods for financial
and tax reporting purposes and for purposes of computing income taxes currently
payable, deferred taxes are provided on such temporary differences.
Bancorporation recognizes deferred tax assets and liabilities for the expected
future tax consequences of the temporary differences between the carrying
amounts and tax basis of assets and liabilities. Deferred tax assets and
liabilities are measured using the enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are expected
to be realized or settled.

Pension Plan:

The Bank provides a noncontributory defined benefit pension plan covering
substantially all Bank employees. Costs of the plan are funded annually on an
actuarial basis to provide the trust fund with assets sufficient to meet the
obligation of future benefits to be paid to the plan members. The annual
contribution is sufficient to fund the normal plan costs on a current basis and
to fund the initial past service liability over forty years.

Statement of Cash Flows:

For purposes of the Consolidated Statements of Cash Flows, Bancorporation
has defined cash on hand and amounts due from banks as cash and cash
equivalents.

26
<PAGE>

FIRST CITIZENS BANCORPORATION OF SOUTH CAROLINA, INC.

Earnings Per Share:

Earnings per share are computed by dividing net income less preferred
dividends by the weighted average number of voting and non-voting common shares
outstanding. Bancorporation adopted SFAS No. 128, "Earnings Per Share", which
establishes standards for computing and presenting earnings per share ("EPS")
by replacing the presentation of primary EPS with a presentation of basic EPS.
As Bancorporation has no dilutive securities, there is no difference between
diluted and basic EPS.

Segment Reporting

During the year ended December 31, 1998, Bancorporation adopted SFAS No.
131, "Disclosure about Segments of an Enterprise and Related Information". SFAS
No. 131 requires that public entities report certain information about
operating segments in their annual financial statements and in condensed
financial statements of interim periods issued to shareholders. It also
requires that public entities disclose information about products and services
provided by significant segments, geographic areas and major customers,
differences between the measurements used in reporting segment information and
those used in the entity's general-purpose financial statements, and changes in
the measurement of segments amounts from period to period.

Operating segments are components of an entity about which separate
financial information is available and is evaluated regularly by the chief
operating decision maker in deciding how to allocate resources and performance.
Bancorporation has determined that its one operating segment is providing
general commercial financial services to customers located in South Carolina.
The various products are those generally offered by community banks and the
allocation of resources is based on the overall performance of the institution,
versus the individual branches or products.

There are no differences between the measurements used in reporting
segment information and those used the Bancorporation's general-purpose
financial statements, and the measurement of segment amounts has not changed
for 1998 from prior years.

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

Note 2 - Cash and Due From Banks (Dollars in thousands)

The Bank is required to maintain reserve balances with the Federal
Reserve, or in vault cash. As of December 31, 1998, the average required
reserve balance was $32,471 compared to $29,559 as of December 31, 1997. Of
this amount, $30,016 and $26,243 was met by vault cash and $2,455 and $3,316
was held with the Federal Reserve at December 31, 1998 and 1997, respectively.
Also, approximately $7,995 and $7,170, as of December 31, 1998 and 1997,
respectively, in cash and due from bank balances was restricted in use as a
compensating balance with other financial institutions.

27
<PAGE>

FIRST CITIZENS BANCORPORATION OF SOUTH CAROLINA, INC.

- --------------------------------------------------------------------------------
Note 3 - Investment Securities (Dollars in thousands)

Securities with an aggregate par value totaling $406,221 as of December
31, 1998 were pledged to secure public fund deposits, securities sold under
agreements to repurchase, and for other purposes as required by law.
<TABLE>
<CAPTION>
Gross Gross
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
----------- ------------ -------------- ------------
<S> <C> <C> <C> <C>
Held-To-Maturity as of December 31, 1998:
U. S. Government obligations:
Within 1 year ..................................... $298,688 $ 1,797 $ - $ 300,485
After 1 year but within 5 years ................... 267,404 1,093 (38) 268,459
-------- -------- ------- ---------
Total ............................................ 566,092 2,890 (38) 568,944
State and political subdivisions:
Within 1 year ..................................... 1,793 6 (1) 1,798
After 1 year but within 5 years ................... 10,173 79 - 10,252
After 5 years but within 10 years ................. 5,474 205 - 5,679
After 10 years .................................... 7,123 22 - 7,145
-------- -------- --------- ---------
Total ............................................ 24,563 312 (1) 24,874
Other securities:
Within 1 year ..................................... - - - -
After 1 year but within 5 years ................... 260 3 (4) 259
After 5 years but within 10 years ................. 50 - - 50
After 10 years .................................... 321 21 - 342
-------- -------- --------- ---------
Total ............................................ 631 24 (4) 651
-------- -------- ---------- ---------
Total Held-To-Maturity as of December 31, 1998 ... $591,286 $ 3,226 $ (43) $ 594,469
======== ======== ======= =========
Available-for-Sale as of December 31, 1998:
Marketable equity securities ....................... $ 19,624 $ 15,019 $(2,101) $ 32,542
-------- -------- --------- ---------
Total Available-for-Sale as of December 31, 1998 . $ 19,624 $ 15,019 $(2,101) $ 32,542
======== ======== ======= =========
Held-To-Maturity as of December 31, 1997:
U. S. Government obligations:
Within 1 year ..................................... $259,201 $ 363 $ (32) $ 259,532
After 1 year but within 5 years ................... 263,514 1,032 - 264,546
-------- -------- --------- ---------
Total ............................................ 522,715 1,395 (32) 524,078
State and political subdivisions:
Within 1 year ..................................... 4,854 12 - 4,866
After 1 year but within 5 years ................... 7,876 105 - 7,981
After 5 years but within 10 years ................. 11,896 274 (4) 12,166
After 10 years .................................... 8,038 41 - 8,079
-------- -------- --------- ---------
Total ............................................ 32,664 432 (4) 33,092
Other securities:
Within 1 year ..................................... 145 - (2) 143
After 1 year but within 5 years ................... 411 - (4) 407
After 5 years but within 10 years ................. 50 - (2) 48
After 10 years .................................... 511 18 - 529
-------- -------- --------- ---------
Total ............................................ 1,117 18 (8) 1,127
-------- -------- ---------- ---------
Total Held-To-Maturity as of December 31, 1997 ... $556,496 $ 1,845 $ (44) $ 558,297
======== ======== ======= =========
Available-for-Sale as of December 31, 1997:
Marketable equity securities ....................... $ 11,600 $ 20,313 $ - $ 31,913
-------- -------- --------- ---------
Total Available-for-Sale as of December 31, 1997 . $ 11,600 $ 20,313 $ - $ 31,913
======== ======== ======= =========
</TABLE>

28
<PAGE>

FIRST CITIZENS BANCORPORATION OF SOUTH CAROLINA, INC.

- --------------------------------------------------------------------------------
Note 4 - Loans (Dollars in thousands)

Gross loans are composed of the following:
<TABLE>
<CAPTION>
December 31,
--------------------------
1998 1997
------------ -------------
<S> <C> <C>
Real estate - construction ................. $ 38,138 $ 23,837
Real estate - mortgage ..................... 1,018,805 889,637
Installment loans to individuals ........... 337,051 356,612
Commercial, financial and agricultural ..... 179,075 158,351
---------- ----------
Total ..................................... $1,573,069 $1,428,437
========== ==========
</TABLE>

Interest income, which would have been recorded pursuant to the original
terms of loans restructured and received on a cash basis, was minimal. Loans
totaling $0, $78, and $128 as of December 31, 1998, 1997 and 1996,
respectively, which have been restructured at market rates and have been
returned to accrual status, are not included in the nonperfoming loan total.
The average investment in impaired loans for the years ending December 31, 1998
and 1997 was $3,001 and $3,305, respectively.
- --------------------------------------------------------------------------------
Note 5 - Reserve For Loan Losses (Dollars in thousands)

As of December 31, 1998 and 1997 loans that were considered to be impaired
under SFAS No. 114 totaled $3,770 and $4,228, respectively. Activity in the
reserve for loan losses is summarized as follows:
<TABLE>
<CAPTION>
December 31,
------------------------------------
1998 1997 1996
------------ ------------ ----------
<S> <C> <C> <C>
Balance at beginning of year ....................... $ 26,135 $ 23,483 $ 21,153
Loans charged off .................................. (3,869) (3,291) (3,354)
Recoveries on loans previously charged off ......... 1,737 1,702 1,110
Provision for loan losses .......................... 4,303 4,241 4,574
-------- -------- --------
Balance at end of year ............................. $ 28,306 $ 26,135 $ 23,483
======== ======== ========
</TABLE>

- --------------------------------------------------------------------------------
Note 6 - Premises and Equipment (Dollars in thousands)

Premises and equipment are summarized as follows:
<TABLE>
<CAPTION>
December 31,
-------------------------
1998 1997
------------ ------------
<S> <C> <C>
Land ................................................ $ 18,879 $ 17,978
Buildings and improvements .......................... 45,884 41,312
Furniture and equipment ............................. 36,670 27,574
Leasehold improvements .............................. 1,127 1,109
Construction in progress ............................ 20,773 8,541
--------- ---------
Total ............................................... 123,333 96,514
Less: Accumulated depreciation and amortization ..... (44,187) (36,726)
--------- ---------
Total premises and equipment ........................ $ 79,146 $ 59,788
========= =========
</TABLE>

Expenses related to depreciation and amortization were $5,967, $4,577, and
$3,666 for the year ended December 31, 1998, 1997 and 1996, respectively, and
are included in noninterest expense.

Substantially all furniture and equipment and most premises used to
conduct operations are owned by Bancorporation. Bancorporation leases (only
under operating leases) certain premises, land upon which branch facilities are
located, and land used for parking. The leases expire over the next 25 years,
and most contain renewal options from 1 to 25 years. Certain leases provide for
periodic rate negotiation or escalation. The leases generally provide for
payment of property taxes, insurance and maintenance costs by Bancorporation.
Future minimum rental payments required under Bancorporation's noncancellable
leases are aggregated as follows:
<TABLE>
<S> <C>
1999 ................ $ 554
2000 ................ 515
2001 ................ 406
2002 ................ 321
2003 ................ 222
Later years ......... 117
------
Total ............... $2,135
======
</TABLE>

Rental expense, including month-to-month leases, reported in noninterest
expense was $654, $528 and $404 for the years ended December 31, 1998, 1997 and
1996, respectively. There are no contingent rentals, and the expense was offset
by sublease rental income of $1,050, $850 and $926 for the years ended December
31, 1998, 1997 and 1996, respectively.

29
<PAGE>

FIRST CITIZENS BANCORPORATION OF SOUTH CAROLINA, INC.

- --------------------------------------------------------------------------------
Note 7 - Intangible Assets (Dollars in thousands)

Intangible assets include the following:
<TABLE>
<CAPTION>
Deposit Mortgage
Based Servicing
Goodwill Premiums Rights Total
------------ ---------- ---------- -----------
<S> <C> <C> <C> <C>
Balance at December 31, 1996 ......... $ 14,926 $ 2,277 $ 2,243 $ 19,446
Additions ........................... 9,068 - 663 9,731
Amortization ........................ (6,181) (1,681) (788) (8,650)
-------- -------- ------- --------
Balance at December 31, 1997 ......... 17,813 596 2,118 20,527
Additions ........................... 2,514 - 1,012 3,526
Amortization ........................ (5,808) (596) (482) (6,886)
-------- -------- ------- --------
Balance at December 31, 1998 ......... $ 14,519 $ - $ 2,648 $ 17,167
======== ======= ======= ========
</TABLE>

- --------------------------------------------------------------------------------
Note 8 - Deposits (Dollars in thousands)

Deposits and related interest expense are summarized as follows:
<TABLE>
<CAPTION>
Deposits Interest Expense
December 31, Year Ended December 31,
--------------------------- --------------------------------
1998 1997 1998 1997 1996
------------- ------------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Demand ................................... $ 354,239 $ 346,934 - - -
Savings:
NOW accounts ............................ 551,122 453,291 $ 8,871 $ 7,847 $ 6,999
Market Rate accounts .................... 302,145 281,679 9,981 9,234 8,224
Other ................................... 15,855 16,239 467 443 481
Time:
Time deposits in excess of $100 thousand 138,942 134,336 7,154 6,791 5,938
Other time deposits ..................... 675,184 646,941 33,784 32,529 29,528
---------- ---------- ------- ------- --------
Total ................................... $2,037,487 $1,879,420 $60,257 $56,844 $ 51,170
========== ========== ======= ======= ========
</TABLE>

30
<PAGE>

FIRST CITIZENS BANCORPORATION OF SOUTH CAROLINA, INC.

- --------------------------------------------------------------------------------
Note 9 - Income Taxes (Dollars in thousands)

The components of consolidated income tax expense are as follows:
<TABLE>
<CAPTION>
Year Ended December 31,
--------------------------------
1998 1997 1996
---------- ---------- ----------
<S> <C> <C> <C>
Taxes currently payable:
Federal .......................... $ 14,685 $ 12,570 $ 11,546
State ............................ 1,138 911 800
-------- -------- --------
15,823 13,481 12,346
Deferred income taxes:
Federal .......................... (3,137) (1,835) (2,121)
State ............................ 30 129 96
-------- -------- --------
(3,107) (1,706) (2,025)
-------- -------- --------
Total Income Tax Expense ......... $ 12,716 $ 11,775 $ 10,321
======== ======== ========
</TABLE>

The significant components of Bancorporation's deferred tax liabilities
and assets recorded pursuant to SFAS No. 109, and included in Other assets in
the Consolidated Statements of Condition, are as follows:
<TABLE>
<CAPTION>
December 31,
-------------------------------
1998 1997 1996
---------- ---------- ---------
<S> <C> <C> <C>
Deferred tax liabilities:
Tax depreciation over book ............................................ $ - $ 534 $ 366
Interest income, accretion recorded for book not taxed until realized . 280 202 156
Deferred loan fees and costs .......................................... 68 106 142
Pension costs for tax greater than book ............................... 1,790 1,461 1,132
Prepaid FDIC insurance premium ........................................ 70 47 37
Mark-to-market of equity securities ................................... 4,521 7,110 4,858
Other, net ............................................................ 632 399 334
------- ------- -------
Total deferred tax liabilities ........................................ 7,361 9,859 7,025
Deferred tax assets:
Tax depreciation under book ........................................... 571 - -
Allowance for loan losses ............................................. 9,907 9,124 8,157
Tax net operating loss carryforwards .................................. 353 431 589
Employee severance and retirement benefits ............................ 318 133 215
Book amortization over tax ............................................ 5,580 4,101 2,697
Other, net ............................................................ 762 504 347
------- ------- -------
Total deferred tax assets ............................................. 17,491 14,293 12,005
------- ------- -------
Net deferred tax assets ............................................... $10,130 $ 4,434 $ 4,980
======= ======= =======
</TABLE>

Bancorporation has no valuation allowance for deferred tax assets based on
management's belief that it is more likely than not that the deferred tax
assets will be realized. Total income tax expense differs from the amount of
income tax determined by applying the U. S. statutory federal income tax rate
(35%) for all years presented to pretax income as a result of the following
differences:
<TABLE>
<CAPTION>
Year Ended December 31,
--------------------------------
1998 1997 1996
---------- ---------- ----------
<S> <C> <C> <C>
Tax expense at statutory rate ......................... $12,717 $11,741 $10,246
Increase (decrease) in taxes resulting from:
Non-taxable interest on investments .................. (783) (819) (832)
State income taxes, net of federal income tax benefit 759 676 896
Other, net ........................................... 23 177 11
------- ------- -------
$12,716 $11,775 $10,321
======= ======= =======
</TABLE>

31
<PAGE>

FIRST CITIZENS BANCORPORATION OF SOUTH CAROLINA, INC.

- --------------------------------------------------------------------------------
Note 10 - Mortgage Servicing Activity (Dollars in thousands)

Bancorporation's mortgage servicing portfolio approximated $644,894 and
$634,876 as of December 31, 1998 and 1997, respectively. Fiduciary funds of
approximately $8,650 and $8,600 at December 31, 1998 and 1997, respectively,
are segregated in trust accounts on deposit with Bancorporation. Loans serviced
for unrelated third parties are not included in the accompanying consolidated
financial statements.

Bancorporation has issued mortgage-backed securities guaranteed by GNMA
under the provisions of the National Housing Act. The issuance of these
securities, and the simultaneous placement of the related mortgages in trust,
have been accounted for as sales of the related mortgages. The outstanding
balances of the securities and the related mortgages held in trust of $9,700
and $12,300 as of December 31, 1998 and 1997, respectively, are not considered
to be assets or liabilities of Bancorporation and, accordingly, are not
included in the consolidated financial statements.
- --------------------------------------------------------------------------------
Note 11 - Long-Term Debt (Dollars in thousands)

Components of long-term debt as of December 31, were as follows:
<TABLE>
<CAPTION>
1998 1997
---------- ---------
<S> <C> <C>
Term loan ......................................... - $7,500
Revolving line of credit .......................... - 6,983
Guaranteed Preferred Beneficial Interests in
Bancorporation's Junior Subordinated Deferrable
Interest Debenture 8.25%, due March 15, 2028 ...... $50,000 -
</TABLE>

The outstanding balance of the term loan was $0 and $7,500 as of December
31, 1998 and 1997, respectively. The term loan agreement was with an unrelated
financial institution and provided an interest rate indexed to prime with a
floor of 7.25% and a ceiling of 12.00%.

A committed unsecured revolving line of credit was established in 1997
with an unrelated financial institution and provides an interest rate indexed
to the London Interbank Offered Rate ("LIBOR") plus 70 basis points. This line
of credit contains certain restrictive covenants including limits on
indebtedness, encumbrances, dividends and minimum net worth. Bancorporation was
in compliance with the covenants at December 31, 1998. The line of credit
outstanding was not in use as of December 31, 1998 and the balance as of
December 31, 1997 was $6,983. The line of credit expires on August 14, 2000.

FCB/SC Capital Trust I, a statutory business trust ("Trust") created by
Bancorporation, had outstanding at December 31, 1998, $50,000 (par value
$50,000) of 8.25% Capital Securities which will mature on March 15, 2028
("Capital Securities"). The principal assets of the Trust are $51,547 of
Bancorporation's 8.25% Junior Subordinated Deferrable Interest Debentures which
will mature on March 15, 2028 ("Subordinated Debentures"). Additionally, the
Trust has issued $1,547 of Common Securities ("Common Securities") to
Bancorporation.

The Capital Securities and the Common Securities may be included in Tier 1
capital for regulatory capital adequacy determination purposes. The obligations
of Bancorporation with respect to the issuance of the Capital Securities and
the Common Securities constitute a full and unconditional guarantee by
Bancorporation of the Trust's obligations with respect to the Capital
Securities and Common Securities. Subject to certain exceptions and
limitations, Bancorporation may elect from time to time to defer subordinated
debenture interest payments, which would result in a deferral of distribution
payments on the related Capital Securities or Common Securities.

32
<PAGE>

FIRST CITIZENS BANCORPORATION OF SOUTH CAROLINA, INC.

- --------------------------------------------------------------------------------
Note 12 - Stockholders' Equity (Dollars in thousands, except per share data)

Each share of voting common stock and preferred stock is entitled to one
vote on all matters on which stockholders vote. In certain cases, South
Carolina law provides for class voting of shares and for voting rights for
non-voting shares. Dividend rights of each series of preferred stock are
cumulative and upon liquidation each preferred stockholder is entitled to
payment of par value for each share owned before any distribution to holders of
common stock.

Each series of preferred stock may be redeemed by Bancorporation (all or
any part thereof), at its option, at par or stated value. Par value and
dividends paid for each series of preferred stock are scheduled as follows:

Redeemable Preferred Stock

<TABLE>
<CAPTION>
Par or Stated Value Cash
--------------------------------------- Dividend
December 31, Authorized and Outstanding
------------------------------ ------------------------------
Per Per Share 1998
Series Share 1998 1997 1996 1998 1997 1996 1997 and 1996
- -------- ------ -------- -------- -------- -------- -------- -------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
A $ 50 $ 415 $ 415 $ 415 8,305 8,305 8,305 $ 2.50
B 50 590 590 590 11,810 11,810 11,810 2.50
C 20 136 136 136 6,794 6,794 6,794 2.00
E 200 105 105 105 525 525 525 10.00
F 50 1,612 1,612 1,612 32,221 32,221 32,221 2.50
G 50 424 424 424 8,477 8,477 8,477 2.50
------ ------ ------
$3,282 $3,282 $3,282
====== ====== ======
</TABLE>

The Bank must obtain written approval from the South Carolina State Board
of Financial Institutions prior to payment of dividends. Bancorporation's
dividends may be restricted by the requirements of the long-term debt
agreements described in Note 11 which requires that the Bank maintain a
regulatory leverage capital ratio of 4.00%. As of December 31, 1998, the Bank's
leverage capital ratio was 7.00%.

33
<PAGE>

FIRST CITIZENS BANCORPORATION OF SOUTH CAROLINA, INC.

- --------------------------------------------------------------------------------
Note 13 - Employee Benefits (Dollars in thousands)

The Bank has a noncontributory defined benefit pension plan ("Plan") which
covers substantially all of its employees. Retirement benefits under the plan
are based on an employee's length of service and highest average annual
compensation for five consecutive years during the last ten years of
employment. Contributions to the plan are based upon the projected unit credit
actuarial funding method and are limited to the amounts that are currently
deductible for tax reporting purposes.

The following table sets forth the plan's status:
<TABLE>
<CAPTION>
Year Ended December
31,
---------------------
1998 1997
---------- ----------
<S> <C> <C>
Change in benefit obligation
Benefit obligation at beginning of year ............ $ 23,298 $ 21,459
Service cost ....................................... 1,270 1,038
Interest cost ...................................... 1,823 1,651
Actuarial loss (gain) .............................. 5,104 (164)
Benefits paid ...................................... (1,197) (686)
-------- --------
Benefit obligation at end of year .................. 30,298 23,298
======== ========

Change in plan assets
Fair value of plan assets at beginning of year ..... 27,575 22,916
-------- --------
Actual return on plan assets ....................... 2,557 3,873
Employer contribution .............................. 1,807 1,471
Benefit payments ................................... (1,197) (685)
-------- --------
Fair value of plan assets at end of year ........... 30,742 27,575
======== ========
Funded status ...................................... 444 4,277
Unrecognized prior service cost .................... 817 1,019
Unrecognized (gain) loss ........................... 2,949 (2,025)
-------- --------
Net amount recognized .............................. $ 4,210 $ 3,271
======== ========
Weighted-averge assumptions as of December 31,
Discount rate for expense .......................... 7.25% 7.75%
Discount rate for year end disclosure .............. 6.75% 7.25%
Expected return on plan assets ..................... 8.50% 8.50%
Rate of compensation increase ...................... 5.00% 5.00%
</TABLE>

The Bank has a contributory savings plan covering full-time employees who
elect to participate. The Bank matches 100% of the employees' contribution of
up to 3% of compensation and 50% of the employees' contribution of 4% to 6% of
compensation. The matching funds contributed by the Bank are 100% vested
immediately. Matching contributions provided by the Bank were $904 in 1998,
$900 in 1997 and $795 in 1996 and are included in salaries and employee
benefits expense.

Effective January 1, 1998, Bancorporation approved a supplemental
retirement plan ("SR Plan") for certain members of management. Benefits under
the SR Plan are based on a percentage of the participant's 1998 salary and will
be paid evenly over a ten-year period after retirement. The present value of
the payments at retirement was determined using a discount rate of 7%, and the
present value of the obligation at retirement totals $3,219.

According to the SR Plan, if a participant dies before retirement, death
benefits will be paid to the participant's estate for a ten-year period. In the
event of death following retirement but before the ten-year period payout is
complete, the beneficiary will receive the remaining payments due at the same
monthly rate. If employment is terminated, Bancorporation has no obligation
under the SR Plan. Bancorporation has the right to terminate the SR Plan at any
time.

Costs for the year ended December 31, 1998 totaled $410 and is included in
Salaries and Employee Benefits in the Consolidated Statements of Income.

34
<PAGE>

FIRST CITIZENS BANCORPORATION OF SOUTH CAROLINA, INC.

- --------------------------------------------------------------------------------
Note 14 - Commitments, Contingencies and Financial Instruments With Off-Balance
Sheet Risk (Dollars in thousands)

Bancorporation does not hold any derivative financial instruments.
Financial instruments with off-balance sheet risk include commitments to extend
credit, standby letters of credit and commitments on mortgage loans held for
resale (See Note 16). Generally, Bancorporation charges a fee to the customer
to extend these commitments as part of its normal banking activities. These
fees are initially deferred and included in loans in the Consolidated
Statements of Condition. Ultimately, such fees are recorded as an adjustment of
yield over the related life of the loan or, if the commitment expires
unexercised, recognized in income upon expiration of the commitment.

A summary of the significant financial instruments with off-balance sheet
risk is as follows:
<TABLE>
<CAPTION>
Contract Amount as of
December 31,
-----------------------
1998 1997
----------- -----------
<S> <C> <C>
Commitments to extend credit $349,472 $284,718
Letters of credit and financial guarantees 2,252 2,503
-------- --------
Total $351,724 $287,221
======== ========
</TABLE>

Commitments to extend credit are agreements to lend to a borrower as long
as there are no violations of any conditions established in the contract.
Commitments generally have fixed expiration dates or other termination clauses
and may require payment of a fee. Since many of the commitments are expected to
expire without being drawn upon, the total commitments do not necessarily
represent future cash requirements. Bancorporation evaluates each borrower's
credit worthiness on a case-by-case basis using the same credit policies for
on-balance sheet financial instruments. The amount of collateral obtained, if
deemed necessary upon extension of credit, is based on management's credit
evaluation of the borrower. Collateral held varies, but may include accounts
receivable, inventory, property, plant and equipment, and income producing
property.

Letters of credit and financial guarantees are conditional commitments
issued by Bancorporation to guarantee the performance of a borrower to a third
party. The evaluations of credit worthiness, consideration of need for
collateral, and credit risk involved in issuing letters of credit are
essentially the same as that involved in extending loans to borrowers.

Most of Bancorporation's business activity is with customers located in
South Carolina. A significant economic downturn in South Carolina could have a
material adverse impact on the operations of Bancorporation. As of December 31,
1998, Bancorporation had no other significant concentrations of credit risk in
the loan portfolio.

Bancorporation is a defendant in litigation arising out of normal banking
activities. In the opinion of management and Bancorporation's counsel, the
ultimate resolution of these matters will not have a material effect on
Bancorporation's financial condition or results of operations.

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

Note 15 - Related Party Transactions (Dollars in thousands)

Bancorporation has had, and expects to have in the future, transactions in
the ordinary course of business with its directors, officers, principal
stockholders and their associates on substantially the same terms (including
interest rates and collateral on loans) as those prevailing for comparable
transactions with others; however, subject to the completion of length of
service requirements and credit approval, all employees (except executive
officers) are eligible to receive reduced interest rates on extensions of
credit. The transactions do not involve more than the normal risk of
collectability.

Aggregate balances and activity for the year ended December 31, 1998,
related to extensions of credit to officers, directors and their associates
were as follows:
<TABLE>
<S> <C>
Balance at beginning of year .......... $5,940
New loans and additions ............... 546
Payments and other deductions ......... (699)
------
Balance at end of year ................ $5,787
======
</TABLE>

During 1996, Bancorporation renewed a contract with First-Citizens Bank &
Trust Company, Raleigh, North Carolina for the purpose of outsourcing data
processing and other services to include item processing, deposits, loans,
general ledger and statement rendering functions. Total expenses incurred under
this contract totaled $7,031, $6,306 and $5,757 for the years ended December
31, 1998, 1997 and 1996, respectively. The current contract expires December
31, 1999 and another contract will be negotiated in early 2000. Bancorporation
also has a correspondent banking relationship with First-Citizens Bank & Trust
Company, Raleigh, North Carolina, which also acts as an investment custodian.
Fees paid for this service were minimal for 1998, 1997 and 1996.

35
<PAGE>

FIRST CITIZENS BANCORPORATION OF SOUTH CAROLINA, INC.

- --------------------------------------------------------------------------------
Note 16 - Disclosure of Fair Value of Financial Instruments (Dollars in
thousands)

SFAS No. 107, "Disclosure About Fair Value of Financial Instruments"
extends existing fair value disclosure practices for some instruments by
requiring entities to disclose the fair value of financial instruments, both
assets and liabilities, recognized and not recognized in the statement of
financial position.

For Bancorporation approximately 95% of its assets and liabilities are
considered financial instruments, as defined in SFAS No. 107. Many of
Bancorporation's financial instruments, however, lack an available trading
market as characterized by a willing buyer and willing seller engaging in an
exchange transaction. It is not the intent of Bancorporation to liquidate and
therefore realize the difference between market value and carrying value and,
even if it were, there is no assurance that the estimated market values could
be realized. Therefore, significant estimates and present value calculations
were used by Bancorporation for the purposes of this disclosure. Such estimates
involve judgments as to economic conditions, risk characteristics and future
expected loss experience of various financial instruments and other factors
that cannot be determined with precision. Thus the information presented is not
particularly relevant to predicting Bancorporation's future earnings or cash
flow.

Following is a description of the methods and assumptions used to estimate
the fair value of each class of Bancorporation's financial instruments:

Cash and short-term investments:

The carrying value is a reasonable estimation of fair value.

Investment securities:

Fair value is based upon quoted market prices, if available. If a quoted
market price is not available, fair value is estimated using quoted market
prices for similar securities.

Loans:

For certain homogeneous categories of loans such as residential mortgages,
fair value is estimated using the quoted market prices for securities backed by
similar loans, adjusted for differences in loan characteristics. The fair value
for other types of loans is estimated by discounting the expected future cash
flows using Bancorporation's current interest rates at which loans would be
made to borrowers with similar credit risk. The fair value of nonaccrual loans
was estimated by discounting expected future cash flows utilizing rates of
returns, adjusted for credit risk and servicing cost commensurate with a
portfolio of nonaccrual loans.

Deposits:

The fair value of demand deposits, savings accounts and certain money
market deposits is the amount payable on demand at the reporting date. The fair
value of fixed-maturity certificates of deposit is estimated using the rates
currently offered for deposits of similar remaining maturities.

Federal funds purchased and securities sold under agreements to repurchase:

The carrying value is a reasonable estimation of fair value.

Long-term debt:

Rates currently available to Bancorporation for debt with similar terms
and remaining maturities are used to estimate fair value of existing debt.

Commitments to extend credit and standby letters of credit:

The fair value of commitments and letters of credit is based on fees
currently charged for similar agreements or on the estimated cost to terminate
them with the counterparties at the reporting date.

SFAS No. 107 requires entities to disclose the fair value of
off-balance-sheet financial instruments for which it is practical to estimate
fair value. The fair values of commitments to extend credit and standby letters
of credit are generally based upon fees charged to enter into similar
agreements, taking into account the remaining terms of the agreements and the
counterparties' credit standing. The estimated fair value of the Bank's
off-balance sheet commitments is nominal since the committed rates approximate
current rates offered for commitments with similar rate and maturity
characteristics and since the estimated credit risk associated with such
commitments is not significant.

The carrying amounts and estimated fair values of Bancorporation's
financial instruments are as follows:
<TABLE>
<CAPTION>
December 31, 1998 December 31, 1997
------------------------- -------------------------
Estimated Estimated
Carrying Fair Carrying Fair
Amount Value Amount Value
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Financial assets:
Cash and federal funds sold ................................... $ 179,795 $ 179,795 $ 138,176 $ 138,176
Interest-bearing deposits in financial Institutions ........... - - 7,700 7,857
Investment securities ......................................... 623,828 639,643 588,409 595,744
Loans ......................................................... 1,573,069 1,704,482 1,428,437 1,532,771
Financial liabilities:
Deposits ...................................................... 2,037,487 2,078,293 1,879,415 1,944,571
Federal funds purchased and securities sold under agreements to
repurchase .................................................... 204,702 204,702 184,168 184,167
Long-term debt ................................................ 50,000 73,210 14,483 16,095
</TABLE>

36
<PAGE>

FIRST CITIZENS BANCORPORATION OF SOUTH CAROLINA, INC.

- --------------------------------------------------------------------------------
Note 17 - Capital Matters (Dollars in thousands)

Bancorporation is subject to various regulatory capital requirements
administered by federal banking agencies. Failure to meet minimum capital
requirements can initiate certain mandatory, and possibly additional
discretionary, actions by regulators that, if undertaken, could have a direct
material effect on Bancorporation's consolidated financial statements. Under
capital adequacy guidelines and the regulatory framework for prompt corrective
action, Bancorporation must meet specific capital guidelines that involve
quantitative measures of Bancorporation's assets, liabilities and certain
off-balance sheet items as calculated under regulatory accounting practices.
Bancorporation's capital amounts and classification are also subject to
qualitative judgments by the regulators about components, risk weightings and
other factors.

Quantitative measures established by regulation to ensure capital adequacy
require Bancorporation to maintain minimum amounts and ratios of Total and Tier
I capital to risk weighted assets, and of Tier I capital to average assets.
Management believes, as of December 31, 1998, that Bancorporation meets all
capital adequacy requirements to which it is subject.

To be categorized as well-capitalized, Bancorporation must maintain
minimum Total risk-based and Tier I risk-based ratios as set forth in the table
below. There are no conditions or events subsequent to December 31, 1998, that
would change the amounts and ratio's presented below.
<TABLE>
<CAPTION>
To Be Well
Capitalized Under
For Capital Prompt Corrective
Actual Adequacy Purposes Action Provisions
----------------------- ----------------------- ----------------------
Amount Ratio (%) Amount Ratio (%) Amount Ratio (%)
----------- ----------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
As of December 31, 1998
Total capital to risk weighted assets
Bancorporation ...................... $220,709 14.27 $123,769 =>8.00 $154,711 =>10.00
Bank ................................ 179,172 11.76 121,891 =>8.00 152,364 =>10.00
Tier I capital to risk weighted assets
Bancorporation ...................... 201,259 13.01 61,884 =>4.00 92,826 =>6.00
Bank ................................ 160,012 10.50 60,945 =>4.00 91,418 =>6.00
Tier I capital to average assets
Bancorporation ...................... 201,259 8.71 95,517 =>4.00 119,396 =>5.00
Bank ................................ 160,012 7.00 94,340 =>4.00 117,925 =>5.00
As of December 31, 1997
Total capital to risk weighted assets
Bancorporation ...................... $146,453 10.49 $111,665 =>8.00 $139,581 =>10.00
Bank ................................ 145,855 10.65 109,605 =>8.00 137,006 =>10.00
Tier I capital to risk weighted assets
Bancorporation ...................... 127,398 9.13 55,833 =>4.00 83,749 =>6.00
Bank ................................ 128,618 9.39 54,802 =>4.00 82,204 =>6.00
Tier I capital to average assets
Bancorporation ...................... 127,398 6.21 86,568 =>4.00 108,210 =>5.00
Bank ................................ 128,618 6.28 85,600 =>4.00 107,000 =>5.00
</TABLE>

37
<PAGE>

FIRST CITIZENS BANCORPORATION OF SOUTH CAROLINA, INC.

- --------------------------------------------------------------------------------
Note 18 - Bancorporation (Parent Company only) Information (Dollars in
thousands)

Bancorporation's principal asset is its investment in its wholly-owned
subsidiary, the Bank, and its principal source of income is dividends from the
Bank. The approval of the South Carolina State Board of Financial Institutions
is required for any dividends declared by a state bank.

Bancorporation's condensed balance sheets and the related condensed
statements of income and of cash flows are as follows:

BALANCE SHEET DATA
<TABLE>
<CAPTION>
December 31,
------------------------
1998 1997
----------- ------------
<S> <C> <C>
Assets:
Cash ............................................... $ 21,747 $ 1,063
Investment in the Bank ............................. 176,142 147,026
Other assets ....................................... 33,567 32,020
--------- ---------
Total Assets ....................................... $ 231,456 $ 180,109
========= =========
Liabilities and Stockholders' Equity:
Long term debt ..................................... $ 51,547 $ 14,482
Other liabilities .................................. 5,734 7,209
Stockholders' equity ............................... 174,175 158,418
--------- ---------
Total Liabilities and Stockholders' Equity ......... $ 231,456 $ 180,109
========= =========
</TABLE>

INCOME STATEMENT DATA
<TABLE>
<CAPTION>
Year Ended December 31,
---------------------------------------
1998 1997 1996
------------ ------------ -------------
<S> <C> <C> <C>
Income:
Dividend income from the Bank ................................................ $ 2,594 $ 3,963 $ 2,249
Other ........................................................................ 1,332 341 1,036
-------- -------- -------
3,926 4,304 3,285
Expenses:
Interest ..................................................................... 389 868 859
Other ........................................................................ 3,453 79 22
-------- -------- -------
3,842 947 881
Income before equity in undistributed earnings of the Bank and income taxes .. 84 3,357 2,404
Equity in undistributed earnings of the subsidiaries and associated companies 22,567 18,120 16,549
-------- -------- -------
Income before income taxes .................................................... 22,651 21,477 18,953
Applicable income tax benefit ................................................. (967) (293) (1)
-------- -------- ---------
Net Income .................................................................... $ 23,618 $ 21,770 $18,954
======== ======== =======
</TABLE>

CASH FLOWS DATA

<TABLE>
<CAPTION>
Year Ended December 31,
--------------------------------------
1998 1997 1996
------------ ------------ ------------
<S> <C> <C> <C>
Cash Flows From Operating Activities:
Net income ......................................................................... $ 23,618 $ 21,770 $ 18,954
Adjustments to reconcile net income to netcash provided by operating activities:
Equity in undistributed earnings of the Bank ...................................... (22,567) (18,120) (16,549)
Decrease (increase) in other assets ............................................... (846) (7,815) 318
Increase (decrease) in other liabilities .......................................... 1,023 (261) 190
--------- --------- ---------
Net Cash (Used in) Provided By Operating Activities ............................... 1,228 (4,426) 2,913
Cash Flows From Investing Activities:
Purchases of held-to-maturity and available-for-sale securities ................... (8,007) - -
Payments for investments in and advances to subsidiaries .......................... (6,547) - -
--------- --------- ---------
Net Cash (Used in) Provided by Investing Activities ............................... (14,554) - -
Cash Flows From Financing Activities:
Proceeds from advances from subsidiaries .......................................... 51,547 - -
Repayments of long-term debt ...................................................... (14,483) (2,500) (1,700)
Purchase of stock ................................................................. (2,883) - (1,319)
Cash dividends paid ............................................................... (171) (171) (171)
Net increase in long-term debt .................................................... - 6,983 -
--------- --------- ---------
Net Cash Provided By (Used in) Financing Activities ............................... 34,010 4,312 (3,190)
--------- --------- ---------
Increase (decrease) in cash ......................................................... 20,684 (114) (277)
Cash at beginning of year ........................................................... 1,063 1,177 1,454
--------- --------- ---------
Cash at end of year ................................................................. $ 21,747 $ 1,063 $ 1,177
========= ========= =========
Supplemental disclosure of cash flows information:
Interest paid ...................................................................... $ 2,510 $ 851 $ 888
</TABLE>

38
<PAGE>

FIRST CITIZENS BANCORPORATION OF SOUTH CAROLINA, INC.

- --------------------------------------------------------------------------------
Note 19 - Subsequent Events (Unaudited)

On February 25, 1999, Bancorporation entered into a definitive agreement
to acquire The Exchange Bank of South Carolina ("Exchange") for $15 million
with no less than 50% and no more than 60% consisting of stock and the
remaining consisting of notes and cash in exchange for all of the outstanding
shares of Exchange common stock. The acquisition is expected to be accounted
for as a purchase of Exchange and is subject to shareholder and regulatory
approvals. The transaction is expected to be completed in the fourth quarter of
1999. After the acquisition, Exchange will be a wholly-owned subsidiary of
Bancorporation.

39
<PAGE>

FIRST CITIZENS BANCORPORATION OF SOUTH CAROLINA, INC.

FIRST CITIZENS
BANCORPORATION
BOARD OF DIRECTORS
(Directors of First Citizens Bank
are identical to those of First Citizens
Bancorporation)

Jim B. Apple* **
President and Chief Executive Officer
First Citizens Bancorporation of South Carolina, Inc.
President and Chief Executive Officer
First Citizens Bank and Trust Company of
South Carolina
Columbia

Richard W. Blackmon* **
Owner
Richard Blackmon Construction Company,
Lancaster

George H. Broadrick***
Retired, Charlotte, NC

Laurens W. Floyd***
Chairman and Chief Executive Officer
Dillon Provision Company, Inc., Dillon

William E. Hancock, III
President
Hancock Buick Company, Columbia

Robert B. Haynes
Chairman of the Board, Vice President and Secretary
C. W. Haynes and Company,
Inc., Columbia

Wycliffe E. Haynes
Vice President and Treasurer
C. W. Haynes and Company, Inc., Columbia

Lewis M. Henderson***
Tourville, Simpson and Henderson, CPAs,
Columbia

Carmen P. Holding
Atlanta, GA

Frank B. Holding* **
Vice Chairman
First Citizens Bancorporation of
South Carolina, Inc.
Vice Chairman
First Citizens Bank and Trust Company of
South Carolina
Executive Vice Chairman
First Citizens BancShares, Inc.
Executive Vice Chairman
First Citizens Bank and Trust Company,
Smithfield, NC

Dan H. Jordan
Farmer, Nichols

E. Hite Miller, Sr.* **
Chairman
First Citizens Bancorporation
of South Carolina, Inc.
Chairman
First Citizens Bank and Trust Company of
South Carolina
Columbia

N. Welch Morrisette, Jr.
Retired, Columbia

E. Perry Palmer
President
E. P. Palmer Corporation
Palmer Memorial Chapel, Columbia

William E. Sellars*
President
C. W. Haynes and Company, Inc., Columbia

Henry F. Sherrill*
Attorney-at-Law, Columbia

* Member of the Executive Committee, First Citizens Bancoraporation and
First Citizens Bank
** Member of the Investment Committee, First Citizens Bank
*** Member of the Audit Committee, First Citizens Bancorporation and First
Citizens Bank

FIRST CITIZENS BANCORPORATION
EXECUTIVE OFFICERS
E. Hite Miller, Sr.
Chairman

Frank B. Holding
Vice Chairman

Jim B. Apple
President/Chief Executive Officer

Jay C. Case
Executive Vice President/Treasurer/Chief Financial Officer

E. W. Wells
Secretary

DIRECTORS OF WATEREE
LIFE INSURANCE COMPANY
Jay C. Case
President
Wateree Life Insurance Company
Executive Vice President/Treasurer/Chief Financial Officer
First Citizens Bancorporation of South Carolina, Inc.
Executive Vice President/Controller/Chief Financial Officer
First Citizens Bank and Trust Company of South Carolina

Frank B. Holding
Vice Chairman
First Citizens Bank and Trust Company of South Carolina

C. W. Jones
Senior Vice President
First Citizens Bank and Trust Company of South Carolina

Linda C. Kidd
Vice President
First Citizens Bank and Trust Company of South Carolina

William E. Sellars
President
C. W. Haynes and Company, Inc.

OFFICERS OF WATEREE LIFE
INSURANCE COMPANY

Jay C. Case
President

Ed L. Prosser
Vice President

Linda C. Kidd
Vice President/Treasurer

Carol W. Stevens
Secretary

ORGANIZATION OF FIRST CITIZENS BANK
EXECUTIVE OFFICERS
E. Hite Miller, Sr.
Chairman

Frank B. Holding
Vice Chairman

Jim B. Apple
President/Chief Executive Officer

David G. Barnett
Senior Vice President/Retail Banking

Peter M. Bristow
Senior Vice President/Retail Banking

Jay C. Case
Executive Vice President/Controller/Chief Financial Officer

Charles S. McLaurin, III
Executive Vice President/Retail Banking

William K. Brumbach, Jr.
Senior Vice President/Trust Director

Charles D. Cook
Senior Vice President/Commercial Lending Director

Ed L. Prosser
Senior Vice President/Consumer Lending Director

Janis B. Summers
Senior Vice President/First Citizens Mortgage Group

Mike E. Toole
Audit and Security Services Director

E. W. Wells
Senior Vice President/Secretary

DEPARTMENT HEADS AND
GROUP EXECUTIVES
Accounting
Jerue B. Hallman, III
Senior Vice President

Auditing
Mike E. Toole
Audit and Security Services Director

Business Banking
J. Richard Spencer
Senior Vice President

Central Operations
J. Ronald Black
Senior Vice President

Commercial Credit Review
Richard O. Westfall
Senior Vice President

Commercial Loan
Charles D. Cook
Senior Vice President

Community Banking/Professional Banking
James A. Bennett
Senior Vice President

Compliance
K. Gail Askins-Cole
Senior Vice President

Consumer Loan
Ed L. Prosser
Senior Vice President

Controller
Jay C. Case
Executive Vice President

Corporate Secretary/Corporate Communications
E. W. Wells
Senior Vice President

Executive Projects
Laura W. Messer
Senior Vice President

Financial Services
James R. Stevens
Senior Vice President

Group Executive
Jerry M. Williams
Senior Vice President

Human Resources
Carnie P. Hipp, Jr.
Senior Vice President

Marketing
Jan C. Burt
Senior Vice President

Mortgage Group
Janis B. Summers
Senior Vice President

Retail Banking Division
David G. Barnett
Senior Vice President

Peter M. Bristow
Senior Vice President

Charles S. McLaurin, III
Executive Vice President

Trust
William K. Brumbach, Jr.
Senior Vice President

40
<PAGE>

FIRST CITIZENS BANCORPORATION OF SOUTH CAROLINA, INC.

COMMUNITIES SERVED
Abbeville
James A. Timmerman, III
Vice President/City Executive
Aiken
Joe E. Lewis
Vice President/City Executive
Anderson
John B. Buice, Jr.
Vice President/Area Executive
Ballentine
Richard Pascal, Jr.
Assistant Vice President/Manager
Barnwell
John J. Sanders
Vice President/Area Executive
Beaufort
Douglas E. Henderson
Vice President/City Executive
Beech Island
Carol L. Albion
Branch Officer/Supervisor
Belvedere
Steven M. Phillips
Vice President/City Executive
Bennettsville
Phillips M. Wilkins
Vice President/City Executive
Bishopville
Bruce C. Snipes
Assistant Vice President/City Executive
Boiling Springs
Penny S. Guinn
Assistant Vice President/Manager
Calhoun Falls
Donald M. Rochelle
Assistant Vice President/Manager
Cayce
C. Brian McLane, Sr.
Assistant Vice President/Manager
Central
Yancy F. Cousins
Assistant Vice President/Manager
Charleston
Dwight L Moody, Jr.
Vice President/City Executive
Cheraw
Brian J. Mickleberry
Vice President/City Executive
Chester
John M. Bozard
Assistant Vice President/City Executive
Chesterfield
J. Michael Caskey
Vice President/City Executive
Clemson
William B. Harley, Jr.
Vice President/City Executive
Clio
Derry W. McCormick
Vice President/City Executive
Columbia
Kevin C. Fernald
Vice President/Area Executive
Conway
John C. Griggs, Jr.
Vice President/City Executive
Cowpens
Linda D. Porter
Branch Officer/ Manager
Darlington
John H. Martin, III
Vice President/City Executive
Dillon
Stephen S. Jacobs
Vice President/City Executive
Eastover
Robert G. Woods
Assistant Vice President/Manager
Elgin
Adelia A. Owens
Branch Officer/ Manager
Forest Acres
G. Eddie Wingard
Vice President/Commercial Lender
Fort Mill
Dennis J. Stuber
Vice President/Area Executive
Florence
D. Leroy Bailey, Jr.
Vice President/Area Executive
Georgetown
Robert R. Martin, Jr.
Vice President/City Executive
Great Falls
John P. Davis
Vice President/Manager
Greenville
Donald L. Kiser
Vice President/City Executive
Greenwood
C. Sidney Abney
Vice President/City Executive
Hanahan
Tanya K. Rudman
Branch Officer/Lender/Business Development
Hickory Grove
Phillip D. Faulkner
Assistant Vice President/Manager
Hollywood
Rebecca D. Beylotte
Branch Manager
Irmo
Lisa A. Moseley
Assistant Vice President/Manager
Jackson
L. Walker Padgett, Jr
Vice President/Manager
Joanna
Wanda M. Prater
Branch Officer/Supervisor
Johnston
John C. Timmerman
Vice President/City Executive
Jonesville
Patricia V. Morrison
Branch Officer/ Manager
Kershaw
Nancy L. Taylor
Assistant Vice President/City Executive
Lake View
Edna R. Miller
Assistant Vice President/Manager
Lancaster
Don T. Gardner
Vice President/City Executive
Landrum
John W. Killough
Vice President/Manager
Laurens
Melanie P. Young
Branch Officer/Assistant Manager
Lexington
Stanford W. Dawsey
Vice President/City Executive
Liberty
Margaret A. Holder
Consumer Banking Officer/Consumer Lender
Lugoff
William E. Gore, Jr.
Vice President/Manager
Lyman
Terry K. Phillips
Vice President/Manager
Marion
Richard M. Lane
Vice President/City Executive
Mauldin
Ted G. Sanders
Vice President/Branch Manager
Moncks Corner
Dorothy C. Gatlin
Vice President/City Executive
Mount Pleasant
John L. Tobin, Jr.
Branch Officer/Lender/Business Development
Myrtle Beach
John D. Brown
Vice President/City Executive
New Ellenton
Dorothy E. Creech
Assistant Vice President/Manager
Nichols
Gerald M. Bane
Vice President/City Executive
North
Betty H. Williamson
Branch Officer/Manager
Pacolet
Catherine G. Dunnaway
Assistant Vice President/Manager
Pageland
C. Hamilton Hutto
Vice President/City Executive
Pawleys Island
Robert R. Martin, Jr.
Vice President/City Executive
Powdersville
Celia M. Thompson
Vice President/Manager
Prosperity
Judy F. Boozer
Branch Officer/ Manager
Richburg/Lewisville
Russell L. Workman
Assistant Vice President/Manager
Ridge Spring
Donna J. Wise
Assistant Vice President/Supervisor
Rock Hill
Dennis J. Stuber
Vice President/Area Executive
Salem
Betty J. Barker
Branch Supervisor
Saluda
William H. Rushton, Jr.
Vice President/City Executive
Sharon
Phillip D. Faulkner
Assistant Vice President/Manager
Six Mile
Amy J. White
Branch Supervisor
Socastee
Charles S. Page
Assistant Vice President/Manager
South of the Border
Catherine B. Baxley
Branch Officer/Supervisor
Spartanburg
Gaines H. Mason, Jr.
Vice President/City Executive
Summerville
R. Blan Rosebrock
Vice President/City Executive
Sumter
Richard M. Knowlton, Jr.
Vice President/City Executive
St. George
D. Carl Walters, Jr.
Vice President/City Executive
Tega Cay
Christina L. Hines
Branch Officer/Manager
Trenton
John C. Timmerman
Vice President/City Executive
Ware Shoals
David A. Estes, Jr.
Vice President/Manager
West Columbia
Rhonda P. Boatwright
Branch Manager
Westminister
Paul A. Busey
Branch Officer/Manager
Whitmire
Janie A. Lusk
Branch Officer/Manager
Williston
Frank M. Mizell
Vice President/City Executive
Woodruff
William W. Baxley
Vice President/Manager
York
William B. Arthur
Vice President/City Executive

Exhibit 22

Subsidiaries of the Registrant

1. First-Citizens Bank and Trust Company of South Carolina

2. FCB/SC Capital Trust I

Subsidiaries of First-Citizens Bank and Trust Company of South Carolina

1. Wateree Enterprises, Inc. and its subsidiaries:

a. Wateree Life Insurance Company

b. Wateree Agency, Inc. (inactive)

2. Congaree Investor Services, Inc/

<ARTICLE> 9
<LEGEND>
FORM 10-K
</LEGEND>
<CIK> 0000708848
<NAME> FIRST CITIZENS BANCORPORATION
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> DEC-31-1998
<CASH> 115,795
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 64,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 32,542
<INVESTMENTS-CARRYING> 591,286
<INVESTMENTS-MARKET> 594,433
<LOANS> 1,573,069
<ALLOWANCE> (28,306)
<TOTAL-ASSETS> 2,483,768
<DEPOSITS> 2,037,487
<SHORT-TERM> 204,702
<LIABILITIES-OTHER> 17,404
<LONG-TERM> 50,000
0
3,282
<COMMON> 4,608
<OTHER-SE> 166,285
<TOTAL-LIABILITIES-AND-EQUITY> 2,483,768
<INTEREST-LOAN> 129,415
<INTEREST-INVEST> 33,405
<INTEREST-OTHER> 2,551
<INTEREST-TOTAL> 165,371
<INTEREST-DEPOSIT> 60,257
<INTEREST-EXPENSE> 73,032
<INTEREST-INCOME-NET> 92,339
<LOAN-LOSSES> 4,303
<SECURITIES-GAINS> 36
<EXPENSE-OTHER> 80,609
<INCOME-PRETAX> 36,334
<INCOME-PRE-EXTRAORDINARY> 36,334
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 23,618
<EPS-PRIMARY> 25.30
<EPS-DILUTED> 25.30
<YIELD-ACTUAL> 7.76
<LOANS-NON> 2,248
<LOANS-PAST> 1,522
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 23,610
<ALLOWANCE-OPEN> 26,135
<CHARGE-OFFS> 3,869
<RECOVERIES> 1,737
<ALLOWANCE-CLOSE> 28,306
<ALLOWANCE-DOMESTIC> 28,306
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 10,032

</TABLE>