CAROLINA FIRST CORP, S-3, 1995-04-27

CAROLINA FIRST CORP
S-3, 1995-04-27
STATE COMMERCIAL BANKS

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<PAGE>
REGISTRATION FILE NO. 33-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
CAROLINA FIRST CORPORATION
(Exact name of Registrant as specified in its charter)
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<S> <C> <C>
SOUTH CAROLINA 6712 57-0824914
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or organization) Classification Code No.) Identification No.)
</TABLE>

102 SOUTH MAIN STREET
GREENVILLE, SOUTH CAROLINA 29601
(803) 255-7900
(Address, including Zip Code, and telephone number,
including area code, of registrant's principal executive offices)
WILLIAM S. HUMMERS III
EXECUTIVE VICE PRESIDENT
CAROLINA FIRST CORPORATION
102 SOUTH MAIN STREET
GREENVILLE, SOUTH CAROLINA 29601
(803) 255-7913
(Name, address, including Zip Code, and telephone number,
including area code, of agent for service)
COPIES TO:
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<S> <C>
WILLIAM P. CRAWFORD, JR., ESQ. GLENN W. STURM, ESQ.
WYCHE, BURGESS, FREEMAN & PARHAM, P.A. NELSON, MULLINS, RILEY & SCARBOROUGH, L.L.P.
POST OFFICE BOX 728 1201 PEACHTREE STREET, SUITE 2200
GREENVILLE, SOUTH CAROLINA 29602 ATLANTA, GEORGIA 30361
(803) 242-8265 (TEL) (803) 235-8900 (FAX) (404) 817-6106 (TEL) (404) 817-6050 (FAX)
</TABLE>

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. ( )
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. ( )
CALCULATION OF REGISTRATION FEE
[CAPTION]
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<S> <C> <C> <C>
TITLE OF EACH CLASS PROPOSED MAXIMUM
OF SECURITIES TO AMOUNT TO BE PROPOSED MAXIMUM AGGREGATE OFFER-
BE REGISTERED REGISTERED PRICE PER UNIT ING PRICE
<S> <C> <C> <C>
% Subordinated
Notes due 2005............ $26,450,000 (1) 100% $26,450,000
<CAPTION>
TITLE OF EACH CLASS AMOUNT OF
OF SECURITIES TO REGISTRATION
BE REGISTERED FEE
<S> <C>
% Subordinated
Notes due 2005............ $9,120.75
</TABLE>
(1) Includes $3,450,000 aggregate principal amount subject to Underwriters'
over-allotment option.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.

<PAGE>
CAROLINA FIRST CORPORATION
CROSS REFERENCE SHEET
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<CAPTION>
ITEM
NUMBER CAPTION HEADING IN PROSPECTUS
<C> <S> <C>
1. Forepart of the Registration Statement and
Outside Front Cover Page of Prospectus.......... Outside Front Cover Page; Inside Front and Outside Back Cover
Pages; Cross Reference Sheet
2. Inside Front and Outside Back Cover Pages of
Prospectus...................................... Available Information; Incorporation of Certain Information by
Reference; Inside Front and Outside Back Cover Pages; Additional
Information
3. Summary Information, Risk Factors and Ratio of
Earnings to Fixed Charges....................... Prospectus Summary; Risk Factors; Selected Consolidated Financial
Data
4. Use of Proceeds................................. Use of Proceeds
5. Determination of Offering Price................. Not Applicable
6. Dilution........................................ Not Applicable
7. Selling Security Holders........................ Not Applicable
8. Plan of Distribution............................ Outside Front Cover Page; Underwriting
9. Description of Securities to Be Registered...... Description of Notes
10. Interests of Named Experts and Counsel.......... Experts; Legal Matters
11. Material Changes................................ Management's Discussion and Analysis of Financial Condition and
Results of Operations; Business.
12. Incorporation of Certain Information by
Reference....................................... Incorporation of Certain Information by Reference
13. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities..................................... Not Applicable
</TABLE>

<PAGE>
PROSPECTUS SUBJECT TO COMPLETION, DATED APRIL , 1995
$23,000,000

(Carolina First Corporation Logo appears here)

% SUBORDINATED NOTES DUE 2005
The % Subordinated Notes (the "Notes") offered hereby are unsecured debt
obligations of Carolina First Corporation (the "Company" or "CFC"). The Notes
are due on September 1, 2005. Interest on the Notes is payable quarterly on the
first day of March, June, September and December in each year, commencing
September 1, 1995.
The Company will redeem at any time, at 100% of the principal amount plus
accrued interest to the date of redemption, Notes tendered by the personal
representative or surviving joint tenant, tenant by the entirety or tenant in
common of a deceased holder, within 60 days of presentation of the necessary
documents, up to an annual maximum of $25,000 per holder and an annual maximum
for all holders of 2% of the original aggregate principal amount of the Notes.
The Notes are redeemable at the option of the Company, in whole or in part, at
any time on or after September 1, 2000, at 100% of the principal amount plus
accrued interest to the date of redemption.
The Notes are unsecured and subordinated in right of payment to all present
and future senior indebtedness of the Company, including all general creditors
of the Company. There is no limitation on the Company's ability to issue
additional debt obligations in the future which are senior to, or which rank on
parity with, the Notes as to all matters. The Notes will be issued in integral
multiples of $1,000 and will be in fully registered form. The minimum principal
amount of Notes which may be purchased is $1,000. No sinking fund will be
established for the Notes.
Payment of principal of the Notes may be accelerated only in certain cases
involving the bankruptcy or insolvency of the Company. There is no right of
acceleration in the case of a default in the payment of the principal of or
interest on the Notes or in the performance of any covenant or agreement of the
Company. The indenture entered into by the Company in connection with the Notes
does not require the Company to maintain any financial ratios or specified
levels of net worth or liquidity. See "Description of Notes."
The Company has been advised by the Underwriters that each Underwriter
intends to make a market in the Notes; however, no assurance can be given that
an active trading market for the Notes will develop. The Company has no present
intention to have the Notes authorized for quotation on any automated quotation
system or listed on any securities exchange.
SEE "RISK FACTORS" FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE
CONSIDERED BY PROSPECTIVE PURCHASERS OF THE NOTES.
THE SECURITIES OFFERED HEREBY ARE NOT SAVINGS ACCOUNTS OR DEPOSIT ACCOUNTS OR
OTHER OBLIGATIONS OF A BANK OR SAVINGS ASSOCIATION AND ARE NOT INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
[CAPTION]
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UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC COMMISSIONS (1) COMPANY (2)
<S> <C> <C> <C>
Per Note............................................ % % %
Total (3)........................................... $ $ $
</TABLE>
(1) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Underwriting."
(2) Before deducting estimated expenses of $300,000 payable by the Company.
(3) The Company has granted the Underwriters a 30-day option to purchase up to
$3,450,000 aggregate principal amount of additional Notes on the same terms
and conditions set forth above, solely to cover over-allotments, if any. If
all such additional Notes are purchased, the total Price to Public,
Underwriting Discounts and Commissions, and Proceeds to Company will be
$ , $ and $ , respectively. See "Underwriting."
The Notes are offered subject to receipt and acceptance by the several
Underwriters, to prior sale and to the Underwriters' right to
reject orders in whole or in part and to withdraw, cancel or modify the offer
without notice. It is expected that the Notes will be available for delivery on
or about , 1995.
J.C. Bradford &Co.
Interstate/Johnson Lane
Corporation
Morgan Keegan & Company, Inc.
May , 1995

Rotated 90 degrees on left side of page the following type appears:

Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with
the Securities and Exchange Commission. These securities may not be sold
nor may offers to buy be accepted prior to the time the registration
statement becomes effective. This prospectus shall not constitute an offer
to sell or the solicitation of an offer to buy nor shall there by any sale
of these securities in any State in which such offer, solicitation or sale
would be unlawful prior to registration or qualification under the securities
laws of any such state.

<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company with the Commission may be
inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
following Regional Offices of the Commission: New York Regional Office, 7 World
Trade Center, 13th Floor, New York, New York 10048; and Chicago Regional Office,
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Copies of such material may also be obtained from the Public Reference Section
of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents, heretofore filed by the Company with the Commission
pursuant to the Exchange Act, are incorporated by reference, except as
superseded or modified herein:
1. Annual Report on Form 10-K for the year ended December 31, 1994; and
2. Current Reports on Form 8-K dated January 24, 1995, March 15, 1995
and April 10, 1995.
All other reports filed pursuant to Section 13(a) or 15(d) of the Exchange
Act since December 31, 1994 shall be deemed to be incorporated by reference in
this Prospectus and shall be part hereof from the date of filing of such
document. All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act, prior to the termination of this
offering shall be deemed to be incorporated by reference into this prospectus.
Any statement contained herein or in a document incorporated herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently-filed
document which also is incorporated by reference herein modifies or supersedes
such statement. Any such statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus is delivered, upon the
written or oral request of any such person, a copy of any document incorporated
by reference herein (other than exhibits to such a document unless such exhibit
is specifically incorporated by reference into such document). Requests for such
copies should be directed to: Carolina First Corporation, 102 South Main Street,
Greenville, South Carolina 29601, Attn: Chief Financial Officer, telephone (803)
255-7913.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES AT A
LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
2

<PAGE>
PROSPECTUS SUMMARY
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED
INFORMATION AND FINANCIAL STATEMENTS APPEARING ELSEWHERE IN THIS PROSPECTUS. ALL
PER SHARE INFORMATION SET FORTH HEREIN HAS BEEN ADJUSTED TO REFLECT COMMON STOCK
DIVIDENDS PAID ON CFC'S COMMON STOCK. UNLESS OTHERWISE INDICATED, THE
INFORMATION IN THIS PROSPECTUS ASSUMES NO EXERCISE OF THE UNDERWRITERS'
OVER-ALLOTMENT OPTION. EXCEPT WHERE EXPRESSLY STATED OTHERWISE, THE FINANCIAL
INFORMATION CONTAINED HEREIN ALSO REFLECTS THE COMPANY'S ACQUISITION OF AIKEN
COUNTY NATIONAL BANK WHICH WAS CONSUMMATED ON APRIL 10, 1995 AND ACCOUNTED FOR
AS A POOLING OF INTERESTS.
THE COMPANY
Carolina First Corporation is a bank holding company headquartered in
Greenville, South Carolina which operates through two subsidiaries: Carolina
First Bank and Carolina First Mortgage Company ("CF Mortgage"). The Company,
which commenced operations in December 1986, currently conducts business through
47 locations in South Carolina. At March 31, 1995, the Company had $1.1 billion
in assets, $877 million in loans, $943 million in deposits and $84 million in
stockholders' equity.
The Company was formed principally in response to perceived opportunities
resulting from the takeovers of several South Carolina-based banks by large
southeastern regional bank holding companies. A significant number of the
Company's executive officers and management personnel were previously employed
by certain of the larger South Carolina-based banks that were acquired by these
southeastern regional institutions. Consequently, these officers and management
personnel have significant customer relationships and commercial banking
experience that have contributed to the Company's loan and deposit growth.
The Company's objective is to become the leading South Carolina-based
banking institution. It believes that it can accomplish this goal by pursuing a
"super-community bank" strategy, offering the personalized service and local
decision-making authority that characterize community banks, as well as the
sophisticated banking products offered by regional and super-regional
institutions. The Company targets individuals and small to medium-sized
businesses in South Carolina that require a full range of quality banking
services.
The Company currently serves three principal market areas: the Greenville
metropolitan area and surrounding counties (located in the "Upstate" region of
South Carolina); the Columbia metropolitan area and surrounding counties
(located in the "Midlands" region of South Carolina); and Georgetown and Horry
counties (located in the "Coastal" region of South Carolina). In April 1994, the
Company entered the Charleston market with its acquisition of Citadel Federal
Savings & Loan Association from the Resolution Trust Corporation. The Company's
principal market areas, together with the Charleston market, represent the four
largest Metropolitan Statistical Areas in the state.
The Company began its operations with the de novo opening of Carolina First
Bank in Greenville and has pursued a strategy of growth through internal
expansion and through the acquisition of branch locations and financial
institutions in selected market areas. Its more significant acquisitions include
(i) the acquisition in August 1990 of First Federal Savings and Loan Association
of Georgetown (subsequently renamed Carolina First Savings Bank) which was
merged into Carolina First Bank in February 1995, (ii) the acquisitions in March
1993 and May 1994 of twelve branch locations and six branch locations,
respectively, of Republic National Bank, (iii) the acquisition of First Sun
Mortgage Corporation (subsequently renamed Carolina First Mortgage Company) in
September 1993, and (iv) the merger of Aiken County National Bank into Carolina
First Bank in April 1995. Approximately half of the Company's total deposits
have been generated through acquisitions.
CF Mortgage's principal activities include the origination and servicing of
one-to-four family residential mortgage loans through its seven offices in South
Carolina. At March 31, 1995, CF Mortgage was servicing 10,360 loans having an
aggregate principal balance of approximately $800 million. This servicing
includes approximately $435 million in servicing sold to an unrelated party as
of March 31, 1995. The Company is subservicing these loans until June 1995 and
is actively seeking to acquire additional servicing rights to replace the
servicing which was sold. See "Business -- CF Mortgage."
Since 1990, Carolina First Bank acquired or originated credit card
receivables which had outstanding balances of approximately $104 million as of
December 31, 1994. In January 1995, Carolina First Bank contributed
approximately $97 million of its credit card receivables to a master trust (the
"Trust") in connection with a securitization of such credit card receivables
(the "Securitization"). In connection with the Securitization, certain interests
in the Trust were sold to an institutional investor, while Carolina First Bank
retained certain residual interests in the Trust assets and potential income. In
connection with the sale of such interests, Carolina First Bank received cash
proceeds of approximately $66 million.
3

<PAGE>
In the fourth quarter of 1994, the Company initiated a restructuring which
was designed to improve its long-term competitive position. This restructuring
had several unrelated components and involved (i) the merger of Carolina First
Bank and Carolina First Savings Bank, F.S.B. ("CF Savings Bank"), (ii) the
Securitization, and (iii) the write-off of certain intangible assets. In
connection with these transactions, the Company incurred in the fourth quarter
of 1994 an aggregate, one-time, after-tax charge of $9.4 million. The Company
believes that on a going-forward basis, the aggregate effect of the
restructuring will be to increase pre-tax income by approximately $2.8 million a
year. Absent the one-time charge associated with these transactions, the Company
would have had net income of $7.2 million during 1994.
In November 1994, the Company entered into an agreement to acquire Midlands
National Bank, a national bank headquartered in Prosperity, South Carolina. The
Company expects that this acquisition will be consummated in the second quarter
of 1995. At March 31, 1995, Midlands National Bank operated through three
locations and had approximately $42 million in assets, $37 million in deposits
and $27 million in loans. The Company expects to issue up to 784,242 shares of
the Company's $1 par value common stock ("Common Stock") in connection with this
acquisition, which is expected to be accounted for as a pooling of interests.
THE OFFERING
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<S> <C>
Securities offered................................. $23,000,000 principal amount of % Subordinated Notes due 2005,
assuming no exercise of the Underwriters' over-allotment option to
purchase up to an additional $3,450,000 principal amount of Notes. The
Notes are unsecured, general obligations of the Company and are not
insured by the Federal Deposit Insurance Corporation (the "FDIC"). See
"Description of Notes."
Maturity........................................... September 1, 2005
Interest payment dates............................. Interest is payable quarterly on the first day of March, June, September
and December, commencing September 1, 1995. The first interest payment
will represent interest from the date of original issuance through
September 1, 1995.
Redemption option upon death of holder............. The Company will redeem, at 100% of the principal amount plus accrued
interest to the date of redemption, Notes tendered by the personal
representative or surviving joint tenant, tenant by the entirety or
tenant in common of a deceased holder, up to an annual maximum of
$25,000 per holder and an annual maximum for all holders of 2% of the
original aggregate principal amount of the Notes. See "Description of
Notes -- Redemption in the Event of Death of a Holder."
Redemption at Company's option..................... The Notes may be redeemed at the Company's option on or after September
1, 2000 at 100% of the principal amount plus accrued interest to the
date of redemption. See "Description of Notes -- Optional Redemption by
Company."
Subordination...................................... The Notes are unsecured and subordinated in right of payment to all
existing and future senior indebtedness of the Company, including
general creditors.
Sinking fund....................................... None
Use of proceeds.................................... The Company anticipates that approximately $15 million of the proceeds
of this offering will be contributed to Carolina First Bank to provide
additional capital to support internal growth and acquisitions. The
balance of the proceeds will be used for general corporate purposes.
Pending such use, the net proceeds will be invested in marketable
investment securities.
Trustee............................................ First American National Bank
</TABLE>

<PAGE>
SUMMARY CONSOLIDATED FINANCIAL DATA
<TABLE>
<CAPTION>
THREE
MONTHS
ENDED
YEARS ENDED DECEMBER 31, MARCH 31,
1990 1991 1992 1993 1994 1994
<S> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
INCOME STATEMENT
Net interest income................................. $ 11,467 $ 14,295 $ 19,368 $ 28,573 $ 43,471 $ 8,138
Provision for loan losses........................... 793 1,687 1,828 961 1,090 20
Net interest income after provision for loan
losses............................................ 10,674 12,608 17,540 27,612 42,381 8,118
Noninterest income, excluding gain on sale of
purchased mortgage servicing rights and securities
transactions...................................... 1,250 1,809 3,156 5,802 7,912 1,969
Gain on sale of purchased mortgage servicing
rights............................................ -- -- -- -- -- --
Securities transactions............................. (4) 664 535 662 75 73
Total noninterest income............................ 1,246 2,473 3,691 6,464 7,987 2,042
Noninterest expense, excluding credit card
restructuring charges............................. 10,058 12,889 17,688 26,855 40,378 8,190
Credit card restructuring charges................... -- -- -- -- 12,214 --
Total noninterest expense........................... 10,058 12,889 17,688 26,855 52,592 8,190
Net income (loss)................................... 1,288 1,738 2,383 5,048 (2,175) 1,487
Net income (loss) applicable to common
shareholders...................................... 1,288 1,738 1,758 3,118 (4,608) 1,177
PER SHARE DATA (1)(2)
Net income (loss) per common share:
Primary........................................... $ 0.35 $ 0.47 $ 0.47 $ 0.82 $ (0.93) $ 0.24
Fully diluted..................................... n/a n/a 0.47 0.82 (0.93) 0.24
Cash dividends declared............................. -- -- -- 0.05 0.21 0.05
Weighted average common shares outstanding:
Primary........................................... 3,686,446 3,719,100 3,743,504 3,784,599 4,974,087 4,951,558
Fully diluted..................................... n/a n/a 4,495,895 5,930,216 7,442,816 6,247,201
Common shares outstanding (period end).............. 3,712,241 3,737,406 3,758,820 4,732,537 5,034,060 4,962,175
Book value per common share (period end)............ $ 9.13 $ 9.52 $ 9.66 $ 10.08 $ 8.48 $ 10.21
Tangible book value per common share (period end)
(3)............................................... 9.11 8.80 8.92 7.12 4.46 7.27
FINANCIAL RATIOS
Return on average assets (annualized)............... 0.36% 0.41% 0.46% 0.68% (0.21)% 0.69%
Return on average equity (annualized)............... 3.89 4.98 5.44 8.16 (2.61) 8.90
Net interest margin (annualized).................... 3.47 3.63 4.03 4.29 4.89 4.28
Average loans as a percentage of average deposits... 96.17 94.14 92.09 87.09 95.63 87.46
ASSET QUALITY RATIOS (4)
Nonperforming assets as a percentage of loans and
other real estate owned........................... 0.73% 0.87% 1.18% 0.77% 0.46% 0.58%
Allowance for loan losses as a percentage of
loans............................................. 0.91 1.15 1.14 1.05 0.63 0.95
Allowance for loan losses as a percentage of
nonperforming loans............................... 184.03 238.06 195.36 299.00 228.40 281.56
Allowance for loan losses as a percentage of
nonperforming assets, including other real estate
owned............................................. 125.10 132.31 97.31 138.28 137.40 160.89
Net loan charge-offs as a percentage of average
loans (annualized)................................ 0.13 0.19 0.35 0.27 0.37 0.16
CAPITAL RATIOS (5)
Leverage ratio...................................... 8.87% 6.77% 7.95% 6.23% 5.54% 6.03%
Risk-based capital
Tier 1............................................ 10.25 9.04 10.44 8.52 7.53 8.33
Total............................................. 11.08 10.20 11.56 9.54 8.21 9.30
RATIO OF EARNINGS TO FIXED CHARGES (6)................ 1.08x 1.08x 1.16x 1.31x 0.93x 1.31x
BALANCE SHEET (PERIOD END)
Total assets........................................ $ 381,497 $ 493,430 $ 574,351 $ 860,373 $1,161,722 $ 889,457
Loans, net of unearned income....................... 300,932 372,231 427,172 594,519 895,605 643,447
Allowance for loan losses........................... 2,731 4,235 4,884 6,270 5,669 6,048
Total earning assets................................ 349,732 449,408 517,419 773,967 1,020,390 791,842
Total deposits...................................... 331,469 449,220 517,699 764,677 963,470 773,654
Stockholders' equity................................ 33,899 35,598 47,814 66,571 82,434 67,402
Nonperforming assets (4)............................ 2,183 3,225 5,019 4,531 4,126 3,759
OTHER DATA
Locations........................................... 11 17 18 39 48 39
Full-time equivalent employees...................... 151 226 252 453 527 470
<CAPTION>

1995
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INCOME STATEMENT
Net interest income................................. $ 12,166
Provision for loan losses........................... 3,011
Net interest income after provision for loan
losses............................................ 9,155
Noninterest income, excluding gain on sale of
purchased mortgage servicing rights and securities
transactions...................................... 2,963
Gain on sale of purchased mortgage servicing
rights............................................ 2,026
Securities transactions............................. 97
Total noninterest income............................ 5,086
Noninterest expense, excluding credit card
restructuring charges............................. 10,590
Credit card restructuring charges................... --
Total noninterest expense........................... 10,590
Net income (loss)................................... 2,414
Net income (loss) applicable to common
shareholders...................................... 1,687
PER SHARE DATA (1)(2)
Net income (loss) per common share:
Primary........................................... $ 0.33
Fully diluted..................................... 0.30
Cash dividends declared............................. 0.06
Weighted average common shares outstanding:
Primary........................................... 5,056,582
Fully diluted..................................... 7,989,638
Common shares outstanding (period end).............. 5,088,979
Book value per common share (period end)............ $ 8.87
Tangible book value per common share (period end)
(3)............................................... 5.05
FINANCIAL RATIOS
Return on average assets (annualized)............... 0.85%
Return on average equity (annualized)............... 11.62
Net interest margin (annualized).................... 4.94
Average loans as a percentage of average deposits... 91.72
ASSET QUALITY RATIOS (4)
Nonperforming assets as a percentage of loans and
other real estate owned........................... 0.34%
Allowance for loan losses as a percentage of
loans............................................. 0.91
Allowance for loan losses as a percentage of
nonperforming loans............................... 615.70
Allowance for loan losses as a percentage of
nonperforming assets, including other real estate
owned............................................. 262.74
Net loan charge-offs as a percentage of average
loans (annualized)................................ 0.33
CAPITAL RATIOS (5)
Leverage ratio...................................... 5.86%
Risk-based capital
Tier 1............................................ 7.47
Total............................................. 8.38
RATIO OF EARNINGS TO FIXED CHARGES (6)................ 1.36x
BALANCE SHEET (PERIOD END)
Total assets........................................ $1,135,961
Loans, net of unearned income....................... 877,122
Allowance for loan losses........................... 7,961
Total earning assets................................ 1,006,037
Total deposits...................................... 943,108
Stockholders' equity................................ 84,366
Nonperforming assets (4)............................ 3,030
OTHER DATA
Locations........................................... 47
Full-time equivalent employees...................... 524
</TABLE>

(1) Restated for 5% Common Stock dividends issued on the Common Stock each year
from 1989 through 1994.
(2) The Company redeemed its Series 1992 Preferred Stock on December 31, 1993.
Prior to that date, substantially all of the holders of the Series 1992
Preferred Stock elected to convert their shares into Common Stock resulting
in the issuance of 1,089,674 shares of Common Stock at an exchange value of
$9.97 per share.
(3) For purposes of computing tangible book value per common share, intangible
assets include goodwill and core deposit premiums.
(4) Nonperforming assets and nonperforming loans exclude loans which are 90 days
or more past due and still accruing interest.
(5) Computed in accordance with prevailing regulatory capital guidelines at the
period end. See "Business -- Supervision and Regulation -- Capital
Adequacy."
(6) For the purpose of computing the ratio of earnings to fixed charges,
earnings represent net income plus income taxes and fixed charges. Fixed
charges consist of interest on deposits, long-term debt and short-term
borrowings and one-third of rental expense (which is deemed representative
of the interest factor).
5

<PAGE>
THE COMPANY
Carolina First Corporation is a bank holding company headquartered in
Greenville, South Carolina which operates through two subsidiaries: Carolina
First Bank and CF Mortgage. The Company, which commenced operations in December
1986, currently conducts business through 47 locations in South Carolina. At
March 31, 1995, the Company had $1.1 billion in assets, $877 million in loans,
$943 million in deposits and $84 million in stockholders' equity.
The Company was formed principally in response to perceived opportunities
resulting from the takeovers of several South Carolina-based banks by large
southeastern regional bank holding companies. A significant number of the
Company's executive officers and management personnel were previously employed
by certain of the larger South Carolina-based banks that were acquired by these
southeastern regional institutions. Consequently, these officers and management
personnel have significant customer relationships and commercial banking
experience that have contributed to the Company's loan and deposit growth.
The Company's objective is to become the leading South Carolina-based
banking institution. It believes that it can accomplish this goal by pursuing a
"super-community bank" strategy, offering the personalized service and local
decision-making authority that characterize community banks, as well as the
sophisticated banking products offered by regional and super-regional
institutions. The Company targets individuals and small to medium-sized
businesses in South Carolina that require a full range of quality banking
services.
The Company's principal executive offices are located at 102 South Main
Street, Greenville, South Carolina 29601, and its telephone number is (803)
255-7900.
RECENT ACQUISITIONS
On April 10, 1995, the Company consummated its acquisition of Aiken County
National Bank, a national bank headquartered in Aiken, South Carolina ("ACNB").
At March 31, 1995, ACNB had two locations and approximately $39 million in
assets, $35 million in deposits and $30 million in loans. In connection with
this acquisition, ACNB was merged into Carolina First Bank and the Company
issued 542,813 shares of Common Stock to the ACNB shareholders. The transaction
was accounted for as a pooling of interests, and all financial information of
the Company contained in this Prospectus includes the results of ACNB for all
periods presented, unless expressly stated otherwise, even though ACNB was not
affiliated with the Company until April 10, 1995.
In November 1994, the Company entered into an agreement to acquire Midlands
National Bank, a national bank headquartered in Prosperity, South Carolina
("MNB"). The Company expects that this acquisition will be consummated in the
second quarter of 1995. At March 31, 1995, MNB operated through three locations
and had approximately $42 million in assets, $37 million in deposits and $27
million in loans. The Company expects to issue up to 784,242 shares of Common
Stock in connection with this acquisition, which is expected to be accounted for
as a pooling of interests. The transaction will be structured as a merger of MNB
into Carolina First Bank, and the former MNB banking locations will be operated
as branch locations of Carolina First Bank after the merger.
6

<PAGE>
RISK FACTORS
In addition to the other information contained in this Prospectus, the
following factors should be considered carefully in evaluating an investment in
the Notes offered hereby.
SOURCES OF PAYMENTS TO HOLDERS OF NOTES
The Company generates cash to pay interest on the Notes primarily through
dividends paid to it by Carolina First Bank and CF Mortgage and secondarily from
existing cash reserves, sales of marketable investment securities and interest
income on its investment assets. Carolina First Bank's ability to pay dividends
to the Company is subject to and limited by certain legal and regulatory
restrictions. At March 31, 1995, there was approximately $16 million in funds
available for dividend payments to the Company from Carolina First Bank.
However, the payment of any such dividends from Carolina First Bank is subject
to receipt of appropriate regulatory approvals. See "Business -- Supervision and
Regulation."
GROWTH THROUGH ACQUISITIONS
The Company has experienced significant growth in assets as a result of
acquisitions. Moreover, the Company anticipates engaging in selected
acquisitions of financial institutions and branch locations in the future. There
are certain risks associated with the Company's acquisition strategy that could
adversely impact net income. Such risks include, among others, incorrectly
assessing the asset quality of a particular institution being acquired,
encountering greater than anticipated costs of incorporating an acquired
business into the Company and being unable to profitably deploy funds acquired
in an acquisition.
The Company may require significant amounts of additional capital in
connection with its future growth. Acquisitions may lower the capital ratios of
the entities involved. Consequently, in the event that the Company engages in
significant acquisitions in the future, the Company may be required to raise
additional capital in order to maintain capital levels required by the bank
regulatory authorities or to have sufficient resources to pay interest on the
Notes. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Financial Condition -- Capital Resources," "Business --
Growth Strategy and Acquisitions" and "Business -- Supervision and
Regulation -- Capital Adequacy."
DEPENDENCE ON SENIOR MANAGEMENT
The Company is dependent upon the services of certain of the senior
executive officers of the Company and its subsidiaries. The loss of the services
of one or more of such individuals could have an adverse effect on the Company.
No assurance can be given that replacements for any of these officers could be
employed if these officers' services were no longer available. The Company
maintains key employee insurance on Mack I. Whittle, Jr., the Company's Chief
Executive Officer. See "Business" and "Management."
COMMERCIAL LENDING ACTIVITIES
Over the past several years, the Company has experienced significant growth
in commercial and commercial mortgage loans. These loans are generally more
risky than one-to-four family or consumer loans because they are unique in
character, generally larger in amount and dependent upon the borrower's ability
to generate cash to service the loan. There are certain risks inherent in making
all loans, including risks with respect to the period of time over which loans
may be repaid, risks resulting from uncertainties as to the future value of
collateral, risks resulting from changes in economic and industry conditions and
risks inherent in dealing with individual borrowers.
The Company had loans to 39 borrowers having principal amounts ranging from
$2 million to $5 million, which loans accounted for $112.5 million, or 13%, of
the Company's loan portfolio in the first quarter of 1995. The Company had loans
to ten borrowers having principal amounts in excess of $5 million, which loans
accounted for $65.8 million, or 7%, of the Company's loan portfolio in the first
quarter of 1995. Any material deterioration in the quality of any of these
larger loans could have a significant impact on the Company's earnings and its
ability to make payments on the Notes.
While the Company's nonperforming loans as a percentage of total loans is
below its peer group average, there is a risk that the quality of the Company's
loan portfolio could decline, particularly in connection with the rapid growth
in loans the Company has experienced over the past several years.
7

<PAGE>
MARKET FOR THE NOTES
The Company has no present intention to have the Notes authorized for
quotation on any automated quotation system or listed on any securities
exchange. Although the Underwriters have advised the Company that each
Underwriter presently intends to make a market in the Notes, the Underwriters
may discontinue making a market in the Notes at any time for any reason.
Therefore, no assurance can be given that an active trading market for the Notes
will develop, or if it develops, that the trading market will continue for any
period of time thereafter.
CERTAIN TERMS OF THE NOTES
The Notes are unsecured and subordinated in right of payment to all present
and future senior indebtedness of the Company, including all general creditors
of the Company. There is no limitation on the Company's ability to issue
additional debt obligations in the future which are senior to, or rank on parity
with, the Notes as to all matters. Payment of principal of the Notes may not be
accelerated except in certain cases involving the bankruptcy or insolvency of
the Company. There is no right of acceleration in the case of a default in the
payment of the principal of, or any premium or interest on, the Notes or in the
performance of any covenant or agreement of the Company. The indenture entered
into by the Company in connection with the Notes does not require the Company to
maintain any financial ratios or specified levels of net worth or liquidity. See
"Description of Notes."
INDUSTRY DEVELOPMENTS
Certain recently-enacted or proposed legislation could have an effect on
both the costs of doing business and the competitive factors facing the
financial institutions industry. The Company is unable at this time to assess
the impact, if any, of this legislation on its financial condition or
operations. See "Business -- Supervision and Regulation."
USE OF PROCEEDS
The net proceeds to the Company from the sale of the Notes offered hereby
are estimated to be approximately $21.8 million ($25.2 million if the
Underwriters' over-allotment option is exercised in full), after deducting the
underwriting discount and estimated offering expenses payable by the Company.
The Company anticipates that approximately $15 million of the proceeds of this
offering will be contributed to Carolina First Bank to provide additional
capital to support internal growth and acquisitions. The balance of the proceeds
will be used for general corporate purposes. Pending such use, the net proceeds
will be invested in marketable investment securities.
The Company has no understandings at this time regarding any future
acquisitions other than the acquisition of MNB, which is expected to be
accounted for as a pooling of interests. See "Business -- Growth Strategy and
Acquisitions" and "Management's Discussion and Analysis of Financial Condition
and Results of Operations -- General."
8

<PAGE>
CAPITALIZATION
The following table sets forth (i) the consolidated capitalization of the
Company at March 31, 1995, (ii) such capitalization at that date as adjusted to
give effect to the sale by the Company of $23,000,000 in principal amount of the
Notes and after deducting the underwriting discounts and estimated offering
expenses, and (iii) such capitalization, at that date, as adjusted to give
effect to the sale by the Company of $23,000,000 of Notes as described in (ii)
above and assuming the consummation of the acquisition of MNB.
<TABLE>
<CAPTION>
MARCH 31, 1995
AS ADJUSTED
WITHOUT MNB WITH MNB
ACTUAL ACQUISITION ACQUISITION
<S> <C> <C> <C>
(DOLLARS IN THOUSANDS)
Long-term debt:
ESOP loan payable in annual installments of $50,000, plus interest
at 90% of prime, through 1997..................................................... $ 76 $ 76 $ 76
% Subordinated Notes due 2005................................................... -- 21,838 21,838
Mortgage debt and capital leases..................................................... 1,086 1,086 1,122
Total long-term debt.............................................................. 1,162 23,000 23,036
Stockholders' equity:
Common Stock -- par value $1 per share; authorized 20,000,000 shares;
issued and outstanding 5,088,979 shares........................................... 5,089 5,089 5,873
Preferred Stock -- authorized 10,000,000 shares; issued and outstanding
917,200 shares (Series 1994), 608,000 shares (Series 1993) and
54,067 shares (Series 1993B)...................................................... 36,633 36,633 37,622
Surplus.............................................................................. 43,198 43,198 44,971
Retained earnings.................................................................... 1,004 1,004 1,583
Nonvested restricted stock........................................................... (998) (998) (998)
Guarantee of ESOP debt............................................................... (126) (126) (126)
Unrealized loss on securities available for sale..................................... (434) (434) (459)
Total stockholders' equity........................................................ 84,366 84,366 88,466
Total capitalization.............................................................. $85,528 $ 107,366 $ 111,502
</TABLE>

CAPITAL RATIOS
The following table sets forth (i) certain capital ratios for the Company
and Carolina First Bank at March 31, 1995, (ii) those ratios at that date as
adjusted to give effect to the sale by the Company of $23,000,000 principal
amount of the Notes and after deducting the underwriting discount and estimated
offering expenses, and (iii) those ratios at that date, as adjusted to give
effect to the sale by the Company of $23,000,000 principal amount of the Notes
as described in (ii) above and assuming the consummation of the acquisition of
MNB.
<TABLE>
<CAPTION>
MARCH 31, 1995
CAPITAL REQUIREMENTS AS ADJUSTED(3)
WELL ADEQUATELY WITHOUT MNB WITH MNB
CAPITALIZED CAPITALIZED ACTUAL ACQUISITION ACQUISITION
<S> <C> <C> <C> <C> <C>
THE COMPANY:
Leverage (1)................................................... 5.00% 4.00% 5.86 % 5.74% 5.89%
Risk-based capital: (2)
Tier 1....................................................... 6.00 4.00 7.47 7.33 7.53
Total........................................................ 10.00 8.00 8.38 10.66 10.79
CAROLINA FIRST BANK:
Leverage (1)................................................... 5.00 4.00 5.77 7.02 7.12
Risk-based capital: (2)
Tier 1....................................................... 6.00 4.00 7.37 8.97 9.11
Total........................................................ 10.00 8.00 8.28 9.87 10.01
</TABLE>

(1) Leverage ratio is defined as Tier 1 capital (using current risk-based
capital guidelines) as a percent of adjusted total assets. See
"Business -- Supervision and Regulation -- Capital Adequacy."
(2) The "as adjusted" risk-based capital ratios have been computed assuming the
net proceeds of this offering are invested in assets carrying a risk-weight
that is equivalent to the Company's and Carolina First Bank's average
risk-weight at March 31, 1995. See "Business -- Supervision and
Regulation -- Capital Adequacy."
(3) The "as adjusted" capital ratios of Carolina First Bank have been computed
assuming a capital contribution of $15,000,000 to it from the Company.
9

<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
The following table presents selected consolidated financial data for the
Company for each of the five years ended December 31, 1990, 1991, 1992, 1993 and
1994 and for the three months ended March 31, 1994 and 1995. The selected
consolidated financial data reflects the Company's acquisition of Carolina First
Savings Bank, F.S.B. ("CF Savings Bank") in August 1990 and ACNB in April 1995,
both of which were accounted for by as a pooling of interests. Therefore, the
Company's operating results contained herein include the results of CF Savings
Bank and ACNB for all periods presented, even though CF Savings Bank and ACNB
were not affiliated with the Company until August 1990 and April 1995,
respectively. See "Business -- Growth Strategy and Acquisitions" for additional
information regarding acquisitions by the Company of branch offices and other
financial assets, which acquisitions are reflected in the financial information
set forth in this table.
<TABLE>
<CAPTION>
THREE
MONTHS
ENDED
YEARS ENDED DECEMBER 31, MARCH 31,
1990 1991 1992 1993 1994 1994
<S> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
INCOME STATEMENT
Net interest income.............................. $ 11,467 $ 14,295 $ 19,368 $ 28,573 $ 43,471 $ 8,138
Provision for loan losses........................ 793 1,687 1,828 961 1,090 20
Net interest income after provision for loan
losses......................................... 10,674 12,608 17,540 27,612 42,381 8,118
Noninterest income, excluding gain on sale of
purchased mortgage servicing rights and
securities transactions........................ 1,250 1,809 3,156 5,802 7,912 1,969
Gain on sale of purchased mortgage servicing
rights......................................... -- -- -- -- -- --
Securities transactions.......................... (4) 664 535 662 75 73
Total noninterest income......................... 1,246 2,473 3,691 6,464 7,987 2,042
Noninterest expense, excluding credit card
restructuring charges.......................... 10,058 12,889 17,688 26,855 40,378 8,190
Credit card restructuring charges................ -- -- -- -- 12,214 --
Total noninterest expense........................ 10,058 12,889 17,688 26,855 52,592 8,190
Net income (loss)................................ 1,288 1,738 2,383 5,048 (2,175) 1,487
Net income (loss) applicable to common
shareholders................................... 1,288 1,738 1,758 3,118 (4,608) 1,177
PER SHARE DATA (1)(2)
Net income (loss) per common share:
Primary........................................ $ 0.35 $ 0.47 $ 0.47 $ 0.82 $ (0.93) $ 0.24
Fully diluted.................................. n/a n/a 0.47 0.82 (0.93) 0.24
Cash dividends declared.......................... -- -- -- 0.05 0.21 0.05
Weighted average common shares outstanding:
Primary........................................ 3,686,446 3,719,100 3,743,504 3,784,599 4,974,087 4,951,558
Fully diluted.................................. n/a n/a 4,495,895 5,930,216 7,442,816 6,247,201
Common shares outstanding (period end)........... 3,712,241 3,737,406 3,758,820 4,732,537 5,034,060 4,962,175
Book value per common share (period end)......... $ 9.13 $ 9.52 $ 9.66 $ 10.08 $ 8.48 $ 10.21
Tangible book value per common share (period end)
(3)............................................ 9.11 8.80 8.92 7.12 4.46 7.27
FINANCIAL RATIOS
Return on average assets (annualized)............ 0.36% 0.41% 0.46% 0.68% (0.21)% 0.69%
Return on average equity (annualized)............ 3.89 4.98 5.44 8.16 (2.61) 8.90
Net interest margin (annualized)................. 3.47 3.63 4.03 4.29 4.89 4.28
Average loans as a percentage of average
deposits....................................... 96.17 94.14 92.09 87.09 95.63 87.46
ASSET QUALITY RATIOS (4)
Nonperforming assets as a percentage of loans and
other real estate owned........................ 0.73% 0.87% 1.18% 0.77% 0.46% 0.58%
Allowance for loan losses as a percentage of
loans.......................................... 0.91 1.15 1.14 1.05 0.63 0.95
Allowance for loan losses as a percentage of
nonperforming loans............................ 184.03 238.06 195.36 299.00 228.40 281.56
Allowance for loan losses as a percentage of
nonperforming assets, including other real
estate owned................................... 125.10 132.31 97.31 138.28 137.40 160.89
Net loan charge-offs as a percentage of average
loans (annualized)............................. 0.13 0.19 0.35 0.27 0.37 0.16
CAPITAL RATIOS (5)
Leverage ratio................................... 8.87% 6.77% 7.95% 6.23% 5.54% 6.03%
Risk-based capital
Tier 1......................................... 10.25 9.04 10.44 8.52 7.53 8.33
Total.......................................... 11.08 10.20 11.56 9.54 8.21 9.30
RATIO OF EARNINGS TO FIXED CHARGES (6)............. 1.08x 1.08x 1.16x 1.31x 0.93x 1.31x
BALANCE SHEET (PERIOD END)
Total assets..................................... $ 381,497 $ 493,430 $ 574,351 $ 860,373 $1,161,722 $ 889,457
Loans, net of unearned income.................... 300,932 372,231 427,172 594,519 895,605 643,447
Allowance for loan losses........................ 2,731 4,235 4,884 6,270 5,669 6,048
Total earning assets............................. 349,732 449,408 517,419 773,967 1,020,390 791,842
Total deposits................................... 331,469 449,220 517,699 764,677 963,470 773,654
Stockholders' equity............................. 33,899 35,598 47,814 66,571 82,434 67,402
Nonperforming assets (4)......................... 2,183 3,225 5,019 4,531 4,126 3,759
OTHER DATA
Locations........................................ 11 17 18 39 48 39
Full-time equivalent employees................... 151 226 252 453 527 470
<CAPTION>

1995
<S> <C>

INCOME STATEMENT
Net interest income.............................. $ 12,166
Provision for loan losses........................ 3,011
Net interest income after provision for loan
losses......................................... 9,155
Noninterest income, excluding gain on sale of
purchased mortgage servicing rights and
securities transactions........................ 2,963
Gain on sale of purchased mortgage servicing
rights......................................... 2,026
Securities transactions.......................... 97
Total noninterest income......................... 5,086
Noninterest expense, excluding credit card
restructuring charges.......................... 10,590
Credit card restructuring charges................ --
Total noninterest expense........................ 10,590
Net income (loss)................................ 2,414
Net income (loss) applicable to common
shareholders................................... 1,687
PER SHARE DATA (1)(2)
Net income (loss) per common share:
Primary........................................ $ 0.33
Fully diluted.................................. 0.30
Cash dividends declared.......................... 0.06
Weighted average common shares outstanding:
Primary........................................ 5,056,582
Fully diluted.................................. 7,989,638
Common shares outstanding (period end)........... 5,088,979
Book value per common share (period end)......... $ 8.87
Tangible book value per common share (period end)
(3)............................................ 5.05
FINANCIAL RATIOS
Return on average assets (annualized)............ 0.85%
Return on average equity (annualized)............ 11.62
Net interest margin (annualized)................. 4.94
Average loans as a percentage of average
deposits....................................... 91.72
ASSET QUALITY RATIOS (4)
Nonperforming assets as a percentage of loans and
other real estate owned........................ 0.34%
Allowance for loan losses as a percentage of
loans.......................................... 0.91
Allowance for loan losses as a percentage of
nonperforming loans............................ 615.70
Allowance for loan losses as a percentage of
nonperforming assets, including other real
estate owned................................... 262.74
Net loan charge-offs as a percentage of average
loans (annualized)............................. 0.33
CAPITAL RATIOS (5)
Leverage ratio................................... 5.86%
Risk-based capital
Tier 1......................................... 7.47
Total.......................................... 8.38
RATIO OF EARNINGS TO FIXED CHARGES (6)............. 1.36x
BALANCE SHEET (PERIOD END)
Total assets..................................... $1,135,961
Loans, net of unearned income.................... 877,122
Allowance for loan losses........................ 7,961
Total earning assets............................. 1,006,037
Total deposits................................... 943,108
Stockholders' equity............................. 84,366
Nonperforming assets (4)......................... 3,030
OTHER DATA
Locations........................................ 47
Full-time equivalent employees................... 524
</TABLE>

<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
Since its inception in 1986, the Company has pursued a strategy of growth
through internal expansion and through the acquisition of branch locations and
financial institutions in selected market areas. At March 31, 1995, the Company
had grown to $1.1 billion in total assets and operated through 47 locations.
The Company's net income is comprised principally of Carolina First Bank's
net interest income. Net interest income is the difference between interest
earned on assets and interest paid for liabilities used to support such assets.
Variations in the volume and mix of assets and liabilities and their relative
sensitivity to interest rate movements determine changes in net interest income.
Net income is also affected by the level of the provision for loan losses,
noninterest income and noninterest expense. Noninterest income consists
primarily of service charges on deposit accounts, income from mortgage banking
operations, fees for trust services, net gains on the sale of securities and
sundry noninterest income. Noninterest expense consists primarily of salaries
and employee benefits, amortization of intangibles, credit card processing fees,
occupancy expense, furniture and equipment expense, federal deposit insurance
premiums and sundry noninterest expense.
Loans are the largest single component of the Company's earning assets and
generally have a more favorable return than other categories of earning assets.
The Company's loans increased 36% from $643.4 million at March 31, 1994 to
$877.1 million at March 31, 1995. This increase resulted principally from
internal growth and the acquisition of $37.5 million in loans in connection with
Carolina First Bank's acquisition of 6 branch locations of Republic National
Bank in May 1994 (the "6 Republic Branches"), and is net of mortgage loans sold
of approximately $51.0 million and the Securitization.
The Company has experienced significant growth in commercial and commercial
mortgage loans over the past several years. These loans constitute approximately
54% of the Company's total loans. There are certain risks inherent in making all
loans, including risks resulting from uncertainties as to the future value of
collateral, risks resulting from changes in economic and industry conditions and
risks inherent in dealing with individual borrowers. However, commercial and
commercial mortgage loans are generally more risky than one-to-four family or
consumer loans because they are unique in character, are generally larger in
amount and are dependent upon the borrower's ability to generate cash to service
the loan.
Deposits in Carolina First Bank are the largest source of liabilities used
to support earning assets. The Company's deposits increased 22% from $773.7
million at March 31, 1994 to $943.1 million at March 31, 1995. Approximately
$135.4 million of the increase resulted from the acquisition of the 6 Republic
Branches. In 1994, the Company modified its funding strategy to rely more on
advances from the Federal Home Loan Bank (the "FHLB") because management
determined that, due to increased competition for deposits, the marginal cost of
borrowing from the FHLB is lower than the marginal cost of raising deposits. At
March 31, 1994, FHLB advances totaled $18.0 million, compared to $68.2 million
at March 31, 1995.
In September 1993, the Company acquired CF Mortgage through a transaction
that was accounted for as a purchase. Due to accounting rules associated with
the purchase method of accounting, the financial information contained herein
does not include the results of CF Mortgage except for periods after the
acquisition.
In the fourth quarter of 1994, the Company initiated a restructuring which
was designed to improve the long-term competitive position of the Company. This
restructuring had several, unrelated components, and involved (i) the merger of
Carolina First Bank and CF Savings Bank, (ii) the Securitization, and (iii) the
write-off of certain intangible assets. In connection with these transactions,
the Company incurred in the fourth quarter of 1994 an aggregate one-time charge
of $12.2 million pre-tax ($9.4 million after-tax). The Company believes that on
a going-forward basis, the aggregate effect of the restructuring will be to
increase pre-tax income by approximately $2.8 million a year. Absent the
one-time charge associated with these transactions, the Company would have had
net income of $7.2 million during 1994.
In February 1995, the Company received a letter from the FDIC which
indicated that, based on its analysis of Carolina First Bank's Report of
Condition as of December 31, 1994, Carolina First Bank was undercapitalized
because its total risk-based capital ratio had fallen below 8% to 6.70%
(excluding ACNB), principally as a result of the inclusion of certain off-
balance sheet items as risk-weighted assets. As a result of the capital
deficiency, Carolina First Bank committed to (1) merge CF Savings Bank and
Carolina First Bank, (2) consummate the Securitization, (3) have the Company
contribute capital of $3.5 million to Carolina First Bank, and (4) sell certain
purchased mortgage servicing rights. All of these steps were taken by March 31,
1995. Although these steps were the subject of an agreement between Carolina
First Bank and the FDIC, the Company had determined to effect all of these
actions, except the $3.5 million capital contribution, prior to and independent
of the capital deficiency matter. As a result of its total risk-based capital
ratio declining below 8%, the Company, Carolina
11

<PAGE>
First Bank and the FDIC entered into a Capital Maintenance Commitment and
Guaranty Agreement pursuant to which the Company guaranteed that Carolina First
Bank will comply with the capital restoration plan described above until
Carolina First Bank has been adequately capitalized on average during each of
four consecutive quarters. At the end of February, Carolina First Bank's total
risk-based capital ratio was 8.10% (excluding ACNB). Carolina First Bank has
received a letter from the FDIC confirming that it is adequately capitalized.
See " -- Capital Resources."
In April 1995, the Company acquired ACNB through a transaction that was
accounted for as a pooling of interests. The Company's financial information has
been restated for the periods before the transaction. Unless expressly stated
otherwise, the Company's financial information contained herein includes the
results of ACNB for all periods presented, even though ACNB was not affiliated
with the Company until April 1995.
In November 1994, the Company entered into an agreement to acquire MNB. The
Company expects to consummate this acquisition in the second quarter of 1995. At
March 31, 1995, MNB operated through three locations and had approximately $42
million in assets, $37 million in deposits and $27 million in loans. Pro forma
condensed financial information reflecting the Company's acquisition of MNB is
set forth below in "Unaudited Pro Forma Condensed Financial Information."
RESULTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1994 AND 1995
The Company's net income increased 62% from $1.5 million, or $0.24 per
common share and $0.24 per fully diluted share, in the first quarter of 1994 to
$2.4 million, or $0.33 per common share and $0.30 per fully diluted share, in
the first quarter of 1995. Increases in average earning assets, net interest
income and noninterest income were the principal reasons for this earnings
growth.
Fully tax equivalent net interest income increased 49% from $8.3 million in
the first quarter of 1994 to $12.3 million in the first quarter of 1995. The
increase resulted from an improvement in the net interest margin and a higher
level of average earning assets. The improvement in net interest margin, which
increased from 4.28% in the first quarter of 1994 to 4.94% in the first quarter
of 1995, primarily resulted from loans repricing more rapidly than deposits in a
rising interest rate environment and a higher level of noninterest-bearing
deposits. The growth in average earning assets, which increased $224.5 million
from $771.9 million in the first quarter of 1994 to $996.4 million in the first
quarter of 1995, resulted from internal loan growth, which more than offset a
decrease in investment securities. Loans averaged $256.7 million higher in the
first quarter of 1995 than in the same period in 1994.
The provision for loan losses was $20,000 and $3.0 million in the first
quarter of 1994 and 1995, respectively. The $3.0 million provision for loan
losses in the first quarter of 1995 was made for several reasons. As a general
matter, management believed that such provision was appropriate in view of a
potential slowdown in the economy (which became evident in the first quarter)
and an increase in the prime interest rate in February 1995, both of which could
make it more difficult for certain borrowers to repay loans. Furthermore,
management believed that such provision was prudent because the Company was
expanding in new markets and was expecting to experience continued strong growth
in loans. Also, the mix of its loan portfolio was changing such that a number of
small loans were being replaced by larger credits, particularly in connection
with the Securitization, which occurred in January 1995. In the first quarter of
1995 the Company had loans to 39 borrowers having principal amounts ranging from
$2 million to $5 million, which loans accounted for $112.5 million, or 13%, of
the Company's loan portfolio. In the first quarter of 1995 the Company had loans
to ten borrowers having principal amounts in excess of $5 million, which loans
accounted for $65.8 million, or 7%, of the Company's loan portfolio. Finally,
management determined that such provision was warranted because of the increase
in chargeoffs in the first quarter to $782,000. At March 31, 1995, the Company's
allowance for loan losses as a percentage of nonperforming assets and other real
estate owned was 262.7%, compared to 160.9% a year earlier. The allowance for
loan losses as a percentage of total loans was 0.95% and 0.91% at March 31, 1994
and 1995, respectively.
Noninterest income, excluding gain on sale of purchased mortgage servicing
rights and securities transactions, increased 50% from $2.0 million in the first
quarter of 1994 to $3.0 million in the first quarter of 1995. On March 31, 1995,
the Company sold purchased mortgage servicing rights associated with $435
million in loans, which resulted in a gain of approximately $2 million. See
"Business -- CF Mortgage." Service charges on deposit accounts increased 45%
from $866,000 in the first quarter of 1994 to $1.3 million in the first quarter
of 1995. The increase in service charges was attributable to the acquisition of
branches and new deposit accounts, increased fee charges and improved collection
results. During the first quarter of 1995, the Company received income of
$377,000 from its interests in the Trust (created in the Securitization).
Mortgage banking income decreased 50% from $501,000 in the first quarter of 1994
to $252,000 in the first quarter of 1995.
12

<PAGE>
The decline in mortgage banking income is attributable to lower origination fees
due to a significant decrease in mortgage loan refinancings as a result of
rising interest rates and a decline in servicing fees net of related
amortization of purchased mortgage servicing rights. Fees for trust services
increased 22% from $245,000 in the first quarter of 1994, to $300,000 in the
first quarter of 1995 from the generation of new trust department business.
Realized gains on securities transactions increased from $73,000 in the first
quarter of 1994 to $97,000 in the first quarter of 1995.
Noninterest expense increased $2.4 million, or 29%, from $8.2 million in
the first quarter of 1994 to $10.6 million in the first quarter of 1995.
Salaries and employee benefits, which increased $1.1 million in the first
quarter of 1995, were the principal reason for this increase. The staffing cost
increases were principally attributable to acquisitions (primarily the
acquisition of the 6 Republic Branches), the opening of de novo branches
(including the Lexington and Myrtle Beach main offices), and additional
personnel hired to support the internal growth in loans and deposits. Sundry
noninterest expense increased $800,000 from $2.8 million in the first quarter of
1994 to $3.6 million in the first quarter of 1995. Of this increase, $442,000
represented the amortization of intangibles and $185,000 represented higher
federal deposit insurance premiums associated with higher deposit levels. The
remaining increase in noninterest expense was primarily attributable to the
overhead and operating expenses associated with higher lending and deposit
activity.
FOR THE YEARS ENDED DECEMBER 31, 1993 AND 1994
The Company had a net loss for 1994 of $2.2 million, or $0.93 per common
share. The net loss for 1994 includes one-time restructuring charges of $9.4
million (after-tax) and losses of $306,000 associated with ACNB. The
restructuring in the fourth quarter of 1994 had several unrelated components
which involved (i) the merger of CF Savings Bank into Carolina First Bank, (ii)
the Securitization, and (iii) the write-off of certain intangible assets.
Although the charges associated with the restructuring offset all Company
earnings in 1994, the Company believes that on a going-forward basis, the
aggregate effect of the restructuring will be to increase pre-tax income by
approximately $2.8 million a year. Absent the one-time restructuring charges and
losses associated with ACNB, the Company would have had net income of $7.5
million during 1994. Net income for 1993 was $5.0 million, or $0.82 per common
share. Increased net interest income and growth in noninterest income were the
primary reasons for the growth in earnings excluding restructuring charges and
ACNB.
Fully tax-equivalent net interest income increased $15.2 million, or 53%,
from $28.8 million in 1993 to $44.0 million in 1994. The increase resulted from
an improvement in the net interest margin and a higher level of average earning
assets. The improvement in net interest margin, which increased from 4.29% in
1993 to 4.89% in 1994, primarily resulted from lower rates paid on deposits and
a higher level of noninterest-bearing deposits. The growth in average earning
assets, which increased from $671.7 million in 1993 to $901.0 million in 1994,
primarily resulted from internal loan growth and branch acquisitions.
The provision for loan losses increased from $1.0 million in 1993 to $1.1
million in 1994. The allowance for loan losses as a percentage of total loans
decreased from 1.0% at December 31, 1993 to 0.6% at December 31, 1994. Continued
reductions in nonperforming asset levels enabled the Company to reduce the
allowance for loan losses compared with the prior year's level. Nonperforming
assets as a percentage of loans and other real estate owned were 0.77% and 0.46%
at December 31, 1993 and 1994, respectively. At December 31, 1994, the Company's
allowance for loan losses as a percentage of nonperforming assets and other real
estate owned was 137.4%, compared to 138.4% at December 31, 1993.
Noninterest income, excluding securities transactions, increased from $5.8
million in 1993 to $7.9 million in 1994. Service charges on deposit accounts,
the largest contributor to noninterest income, increased 45% from $2.7 million
in 1993 to $3.9 million in 1994. The increase in service charges was
attributable to the acquisition of branches and new deposit accounts, increased
fee charges and improved collection results. The expansion of mortgage banking
activities and the generation of new trust department business also contributed
to the increase in noninterest income. Mortgage banking income includes
origination fees, gains from the sale of loans and servicing fees. In 1994,
origination fees, gains from the sale of loans and servicing fees contributed
$954,000, $112,000 and $572,000, respectively, to noninterest income. Realized
gains on securities transactions decreased from $662,000 in 1993 to $75,000 in
1994.
Noninterest expense increased 96% from $26.9 million in 1993 to $52.6
million in 1994. The 1994 noninterest expense includes one-time restructuring
charges of $12.2 million (pre-tax). Also contributing to the increase in
noninterest expense was the acquisition of the 6 Republic Branches and the
opening of four branches de novo, a higher level of loan and deposit activity,
an increase in the amortization of intangibles and higher credit card processing
fees. Salaries and employee benefits, which increased $6.2 million in 1994, also
contributed to this increase. Sundry noninterest expense increased $5.2 million
from $10.4 million in 1993 to $15.6 million in 1994. Approximately half of this
increase was comprised of increases of $1.6 million in the amortization of
intangibles, $597,000 in the cost of servicing credit card receivables, $930,000
in advertising
13

<PAGE>
and public relations expense, and $509,000 in federal deposit insurance premiums
associated with higher deposit levels. The remaining increase in noninterest
expense is primarily attributable to higher lending and deposit activity.
FOR THE YEARS ENDED DECEMBER 31, 1992 AND 1993
The Company's net income increased 112% from $2.4 million, or $0.47 per
common share, in 1992 to $5.0 million, or $0.82 per common share, in 1993.
Increases in average earning assets, net interest income and noninterest income
were the principal reasons for this earnings growth.
Fully tax-equivalent net interest income increased $9.3 million, or 48%,
from $19.5 million in 1992 to $28.8 million in 1993. The increase resulted from
an improvement in the net interest margin and a higher level of average earning
assets. The improvement in net interest margin, which increased from 4.03% in
1992 to 4.29% in 1993, primarily resulted from lower deposit interest rates and
a higher level of noninterest-bearing deposits. The growth in average earning
assets, which increased from $483.6 million in 1992 to $671.7 million in 1993,
primarily resulted from internal loan growth and branch acquisitions. The
majority of this increase was in loans, which averaged $113.4 million higher in
1993 than in 1992.
The provision for loan losses decreased from $1.8 million in 1992 to $1.0
million in 1993. The allowance for loan losses as a percentage of total loans
decreased from 1.1% at December 31, 1992 to 1.0% at December 31, 1993. Continued
reductions in nonperforming asset levels enabled the Company to reduce the
allowance for loan losses compared with the prior year's level. Nonperforming
assets as a percentage of loans and other real estate owned were 1.18% and 0.77%
at December 31, 1992 and 1993, respectively. At December 31, 1993, the Company's
allowance for loan losses as a percentage of nonperforming assets and other real
estate owned was 138.3% compared to 97.3% at December 31, 1992.
Noninterest income, excluding securities transactions, increased 84% from
$3.2 million in 1992 to $5.8 million in 1993. Service charges on deposit
accounts, the largest contributor to noninterest income, increased 66% from $1.6
million in 1992 to $2.7 million in 1993. The increase in service charges was
attributable to the acquisition of branches and new deposit accounts, increased
fee charges and improved collection results. The expansion of mortgage banking
activities and the generation of new trust department business also contributed
to the increase in noninterest income. Mortgage banking income includes
origination fees, gains from the sale of loans (starting in 1992) and servicing
fees (starting in 1993). In 1993, origination fees, gains from the sale of loans
and servicing fees contributed $1.1 million, $509,000 and $228,000,
respectively, to noninterest income. Realized gains on securities transactions
increased to $662,000 in 1993 from $535,000 in 1992.
Noninterest expense increased $9.2 million, or 52%, from $17.7 million in
1992 to $26.9 million in 1993. Salaries and employee benefits, which increased
$4.5 million in 1993, were the principal reason for this increase. The staffing
cost increases were principally attributable to (i) acquisitions (primarily the
acquisitions of the Piedmont branch of Republic National Bank (the
"Republic-Piedmont Branch"), twelve branches of Republic National Bank (the "12
Republic Branches") and CF Mortgage), (ii) the opening of three de novo branches
(including the Columbia main office), and (iii) additional personnel hired to
support internal growth in loans and deposits. Sundry noninterest expense
increased $3.4 million from $7.0 million in 1992 to $10.4 million in 1993. Of
this increase, $306,000 represented the cost of servicing the purchased credit
card receivables, $440,000 represented the amortization of intangibles, and
$492,000 represented higher federal deposit insurance premiums from higher
levels of deposits. The remaining increase in noninterest expense is primarily
attributable to higher lending and deposit activity.
NET INTEREST INCOME
The largest component of the Company's net income is Carolina First Bank's
net interest income. Net interest income is the difference between the interest
earned on assets and the interest paid for the liabilities used to support such
assets. Variations in the volume and mix of assets and liabilities and their
relative sensitivity to interest rate movements determine changes in net
interest income.
14

<PAGE>
The following table sets forth, on a tax-equivalent basis, for the periods
indicated, certain information relating to the Company's average balances and
its average yields on assets and average costs of liabilities. Such yields and
costs are derived by dividing income or expense by the average balance of assets
or liabilities. Average balances are derived from daily balances.
COMPARATIVE AVERAGE BALANCES -- YIELDS AND COSTS
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
1992 1993 1994
AVERAGE INCOME/ YIELD/ AVERAGE INCOME/ YIELD/ AVERAGE INCOME/
BALANCE EXPENSE RATE BALANCE EXPENSE RATE BALANCE EXPENSE
<S> <C> <C> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
ASSETS
Earning assets
Loans, net of unearned
income (1).................... $406,288 $37,339 9.19 % $519,710 $44,617 8.58 % $ 753,482 $67,911
Investment securities,
taxable....................... 57,505 3,462 6.02 124,407 6,076 4.88 116,745 5,224
Investment securities,
nontaxable (2)................ 3,741 456 12.18 8,252 731 8.86 17,188 1,540
Federal funds sold.............. 15,680 538 3.43 19,035 577 3.03 13,066 492
Interest bearing deposits with
other banks................... 340 16 4.62 250 15 5.89 476 20
Total earning assets........ 483,554 41,811 8.65 % 671,654 52,016 7.74 % 900,957 75,187
Non-earning assets.............. 39,723 67,953 112,603
Total assets................ $523,277 $739,607 $1,013,560
LIABILITIES AND STOCKHOLDERS'
EQUITY
Liabilities
Interest-bearing liabilities
Interest-bearing deposits
Interest checking............. $ 31,558 $ 962 3.05 % $ 64,393 $ 1,465 2.28 % $ 98,073 $ 2,108
Savings....................... 21,821 892 4.09 58,613 1,788 3.05 85,691 2,564
Money market.................. 120,766 4,727 3.91 133,255 3,900 2.93 152,833 4,743
Certificates of deposit....... 236,296 13,548 5.73 307,155 13,779 4.49 408,239 17,895
Other......................... 30,734 1,968 6.40 33,358 1,707 5.12 43,077 2,083
Total interest-bearing
deposits................. 441,175 22,097 5.01 596,774 22,639 3.79 787,913 29,393
Short-term borrowings......... 2,290 128 5.57 14,023 427 3.05 41,362 1,638
Long-term borrowings.......... 1,374 110 8.00 1,318 120 9.10 1,264 120
Total interest-bearing
liabilities.............. 444,839 22,335 5.02 612,115 23,186 3.79 830,539 31,151
Noninterest-bearing liabilities
Noninterest-bearing
deposits.................... 30,871 59,591 98,638
Other noninterest
liabilities................. 3,793 6,042 1,006
Total liabilities........... 479,503 677,748 930,183
Stockholders' equity.............. 43,774 61,859 83,377
Total liabilities and
stockholders' equity..... $523,277 $739,607 $1,013,560
Net interest margin............... $19,476 4.03 % $28,830 4.29 % $44,036
<CAPTION>
YIELD/
RATE
<S> <C>
ASSETS
Earning assets
Loans, net of unearned
income (1).................... 9.01 %
Investment securities,
taxable....................... 4.47
Investment securities,
nontaxable (2)................ 8.96
Federal funds sold.............. 3.76
Interest bearing deposits with
other banks................... 4.25
Total earning assets........ 8.35 %
Non-earning assets..............
Total assets................
LIABILITIES AND STOCKHOLDERS'
EQUITY
Liabilities
Interest-bearing liabilities
Interest-bearing deposits
Interest checking............. 2.15 %
Savings....................... 2.99
Money market.................. 3.10
Certificates of deposit....... 4.38
Other......................... 4.84
Total interest-bearing
deposits................. 3.73
Short-term borrowings......... 3.96
Long-term borrowings.......... 9.50
Total interest-bearing
liabilities.............. 3.75
Noninterest-bearing liabilities
Noninterest-bearing
deposits....................
Other noninterest
liabilities.................
Total liabilities...........
Stockholders' equity..............
Total liabilities and
stockholders' equity.....
Net interest margin............... 4.89 %
</TABLE>

(1) Includes nonaccruing loans.
(2) Fully tax-equivalent basis at a 35% tax rate.
15

<PAGE>
ANALYSIS OF CHANGES IN NET INTEREST INCOME
The following table sets forth the effect which the varying levels of
earning assets and interest-bearing liabilities and the applicable rates have
had on the changes in net interest income from 1992 to 1993 and from 1993 to
1994. For purposes of this table, changes which are not solely attributable to
volume or rate have been allocated to volume and rate on a pro-rata basis.
RATE/VOLUME VARIANCE ANALYSIS
<TABLE>
<CAPTION>
1992 COMPARED TO 1993 1993 COMPARED TO 1994
AMOUNT AMOUNT AMOUNT AMOUNT
CAUSED CAUSED CAUSED CAUSED
BY BY BY BY
CHANGE CHANGE CHANGE CHANGE
TOTAL IN IN TOTAL IN IN
CHANGE VOLUME RATE CHANGE VOLUME RATE
<S> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
EARNING ASSETS
Loans, net of unearned income............................. $ 7,278 $ 9,871 $(2,593) $23,294 $21,002 $ 2,292
Securities, taxable....................................... 2,614 3,331 (717) (852) (367) (485)
Securities, nontaxable.................................... 275 435 (160) 810 793 17
Federal funds sold........................................ 39 115 (76) (86) (256) 170
Interest-bearing deposits with other banks................ (1) (5) 4 5 8 (3)
Total interest income................................ 10,205 13,747 (3,542) 23,171 21,180 1,991
INTEREST-BEARING LIABILITIES
Interest-bearing deposits
Interest checking...................................... 503 767 (264) 643 733 (90)
Savings................................................ 896 1,165 (269) 776 812 (36)
Money market........................................... (827) 457 (1,284) 843 600 243
Certificates of deposit................................ 231 3,503 (3,272) 4,116 4,430 (314)
Other.................................................. (261) 163 (424) 376 469 (93)
Total interest-bearing deposits...................... 542 6,055 (5,513) 6,754 7,044 (290)
Short-term borrowings..................................... 299 381 (82) 1,211 1,049 162
Long-term borrowings...................................... 10 (4) 14 -- (5) 5
Total interest expense............................... 851 6,432 (5,581) 7,965 8,088 (123)
Net interest income............................... $ 9,354 $ 7,315 $ 2,039 $15,206 $13,092 $ 2,114
</TABLE>

PROVISION FOR LOAN LOSSES
During 1992, 1993, 1994 and the first quarter of 1995, the Company expensed
$1.8 million, $1.0 million, $1.1 million and $3.0 million, respectively, through
its provision for loan losses. The $3.0 million provision for loan losses in the
first quarter of 1995 was made for several reasons. As a general matter,
management believed that such provision was appropriate in view of a potential
slowdown in the economy (which became evident in the first quarter) and an
increase in the prime interest rate in February 1995, both of which could make
it more difficult for certain borrowers to repay loans. Furthermore, management
believed that such provision was prudent because the Company was expanding in
new markets and was expecting to experience continued strong growth in loans.
Also, the mix of its loan portfolio was changing such that a number of small
loans were being replaced by larger credits, particularly in connection with the
Securitization, which occurred in January 1995. Finally, management determined
that such provision was warranted because of the increase in chargeoffs in the
first quarter to $782,000.
At March 31, 1995, the Company's allowance for loan losses as a percentage
of nonperforming assets and other real estate owned was 262.7%, compared to
160.9% a year earlier. The allowance for loan losses as a percentage of total
loans was 0.95% and 0.91% at March 31, 1994 and 1995, respectively. Net
charge-offs as a percentage of average loans were 0.35% in 1992, 0.27% in 1993,
0.37% in 1994 and 0.33% (annualized) in the first quarter of 1995.
At March 31, 1995, the Company was closely monitoring loans totaling
approximately $8.5 million to three borrowers which were experiencing financial
difficulty. None of these loans was included in nonperforming assets or loans 90
days or more past due and still accruing interest at March 31, 1995.
16

<PAGE>
NONINTEREST INCOME
The following table sets forth, for the periods indicated, the principal
components of noninterest income.
NONINTEREST INCOME
<TABLE>
<CAPTION>
THREE MONTHS
YEARS ENDED DECEMBER 31, ENDED MARCH 31,
1990 1991 1992 1993 1994 1994 1995
<S> <C> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
Service charges on deposits.............................. $ 538 $ 983 $1,632 $2,717 $3,930 $ 866 $1,260
Mortgage banking income:
Origination fees....................................... 309 461 778 1,051 954 231 189
Gain on sale of mortgage loans......................... -- -- 496 509 112 32 56
Servicing and other.................................... -- -- -- 228 572 238 7
Fees for trust services.................................. 141 197 305 542 919 245 300
Credit card trust income................................. -- -- -- -- -- -- 377
Sundry................................................... 262 168 (55) 755 1,425 357 774
Noninterest income, excluding gain on sale of purchased
mortgage servicing rights and securities
transactions........................................... 1,250 1,809 3,156 5,802 7,912 1,969 2,963
Gain on sale of purchased mortgage servicing rights...... -- -- -- -- -- -- 2,026
Gain on sale of securities............................... (4) 664 535 662 75 73 97
Total noninterest income............................... $1,246 $2,473 $3,691 $6,464 $7,987 $2,042 $5,086
</TABLE>

On March 31, 1995, the Company sold purchased mortgage servicing rights
associated with $435 million in mortgage loans to an unrelated party. In
connection with this transaction, the Company realized a gain of approximately
$2 million. The Company entered into this transaction because of its favorable
terms and is actively seeking to purchase additional servicing rights to replace
the servicing which was sold. See "Business -- CF Mortgage."
Service charges on deposit accounts, generally the largest contributor to
noninterest income, rose 45% from $866,000 in the first quarter of 1994 to $1.3
million in the first quarter of 1995. Service charges on deposit accounts rose
45% to $3.9 million in 1994, which followed increases of 66% in both 1993 and
1992. Each of these increases in service charges is attributable to acquiring
branches and new deposit accounts, increasing fee charges and improving
collection results.
Mortgage banking income includes origination fees, gains from the sale of
loans and servicing fees. Mortgage banking income in the first quarter of 1995
decreased 50% to $252,000, as compared to the first quarter of 1994. This
decrease is attributable to lower origination fees resulting from a slowdown in
mortgage loan refinancings and a decline in servicing fees net of the related
amortization of purchased mortgage servicing rights. Mortgage banking income for
1994 decreased 8% to $1.6 million. This followed increases of 40% in 1993 and
176% in 1992. The decrease in 1994 resulted from declines in gains from the sale
of loans from $509,000 in 1993 to $112,000 in 1994. Origination fees totaled
$778,000 in 1992, $1.1 million in 1993, $954,000 in 1994, and $189,000 in the
first quarter of 1995. Until the third quarter of 1992, mortgage loans were
originated primarily for the account of correspondent financial institutions,
with Carolina First Bank retaining an origination fee. Beginning in the third
quarter of 1992, the Company expanded the activities of its mortgage loan
operations and began self-funding the loans prior to sale in the secondary
market. Mortgage loans totaling approximately $80 million, $55 million and $7
million were sold in 1993 and 1994 and in the first quarter of 1995,
respectively.
Fees for trust services increased 22% from $245,000 in the first quarter of
1994 to $300,000 in the first quarter of 1995. Fees for trust services in 1994
increased 70% from the previous year to $919,000 from the previous year. This
followed increases of 78% in 1993 and 55% in 1992. All of these increases in
fees for trust services resulted from the generation of new trust business and
additional assets under management. Assets under management of the trust
department increased to approximately $214 million at December 31, 1994 from
approximately $129 million at December 31, 1993 and approximately $55 million at
December 31, 1992. Assets under management of the trust department increased to
approximately $264 million at March 31, 1995.
The Company recognized gains on the sale of securities of $535,000 in 1992,
$662,000 in 1993, $75,000 in 1994, and $97,000 in the first quarter of 1995.
Sundry income was $670,000 higher in 1994 as compared to 1993, primarily because
of
17

<PAGE>
higher customer service fees, insurance commissions and appraisal fee income
which were related to increased lending and deposit activities.
NONINTEREST EXPENSE
Noninterest expense increased 29% from $8.2 million in the first quarter of
1994 to $10.6 million in the first quarter of 1995. Noninterest expense was
$17.7 million in 1992, $26.9 million in 1993 and $52.6 million in 1994. Included
in 1994 noninterest expense was a $12.2 million one-time restructuring charge
associated with the Securitization and the write-down of certain intangible
assets. Excluding the restructuring charges, 1994 noninterest expense increased
50% over 1993, while 1993 was 52% higher than 1992. The increased expenditures
primarily reflect the costs of additional personnel to support the Company's
current and anticipated growth.
The following table sets forth, for the periods indicated, the principal
components of noninterest expense.
NONINTEREST EXPENSE
<TABLE>
<CAPTION>
THREE MONTHS
YEARS ENDED DECEMBER 31, ENDED MARCH 31,
1990 1991 1992 1993 1994 1994 1995
<S> <C> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
Salaries and wages................................ $ 3,392 $ 4,484 $ 6,495 $10,165 $14,470 $2,956 $ 4,125
Benefits.......................................... 1,041 1,440 1,428 2,301 4,239 1,126 1,075
Occupancy......................................... 910 1,009 1,421 2,215 3,638 817 1,065
Furniture and equipment........................... 805 1,035 1,346 1,747 2,443 487 737
Federal deposit insurance premiums................ 472 780 1,025 1,517 2,026 441 618
Credit card processing charges.................... -- 458 603 909 1,506 311 201
Intangibles amortization.......................... 25 214 462 902 2,485 333 775
Credit card restructuring......................... -- -- -- -- 12,214 -- --
Sundry............................................ 3,413 3,469 4,908 7,099 9,571 1,719 1,994
Total noninterest expense....................... $10,058 $12,889 $17,688 $26,855 $52,592 $8,190 $10,590
</TABLE>

Salaries and wages and benefits increased 27% from $4.1 million in the
first quarter of 1994 to $5.2 million in the first quarter of 1995. Full-time
equivalent employees rose to 524 at March 31, 1995, compared to 470 at March 31,
1994. Staff increases were attributable to the addition of 11 new branches,
higher loan and deposit activity resulting from internal growth and
acquisitions, and the expansion of the mortgage banking operations. Salaries and
wages and benefits increased 50% to $18.7 million in 1994 from $12.5 million in
1993. This followed increases of 57% in 1993 and 34% in 1992. Full-time
equivalent employees rose to 527 at the end of 1994 from 453 and 252 at the end
of 1993 and 1992, respectively. Staff increases were again attributable to the
addition of new branches, higher loan and deposit activity resulting from
internal growth and acquisitions, and the expansion of the mortgage banking
operations.
Occupancy and furniture and equipment expenses increased $498,000, or 38%,
in the first quarter of 1995 compared to the first quarter of 1994. Occupancy
and furniture and equipment expenses increased $2.1 million, or 53%, in 1994.
These increases resulted principally from the addition of new banking offices
including new Myrtle Beach and Lexington main offices, the establishment of CF
Mortgage and the expansion of administrative offices in Greenville to a second
location. Occupancy and furniture and equipment expenses increased $1.2 million,
or 43%, in 1993 due to the addition of 18 branches and the opening of a regional
headquarters office in Columbia for the Midlands region of South Carolina. In
addition, the Company relocated its operations center from Greenville, South
Carolina to Columbia, South Carolina, a location more central to its branches.
Occupancy and furniture and equipment expenses increased 35% during 1992.
Federal deposit insurance premiums increased 40% to $618,000 in the first
quarter of 1995 as compared to the first quarter of 1994. Federal deposit
insurance premiums increased 34% in 1994 to $2.0 million, which followed
increases of 31% in 1992 and 48% in 1993. These increases were primarily due to
higher levels of deposits.
18

<PAGE>
Service charges for processing credit cards decreased $110,000 in the first
quarter of 1995 as compared to the same period in 1994, as a result of the
consummation in January 1995 of the Securitization. Service charges for
processing credit cards increased $597,000 in 1994, principally as a result of
the origination of approximately $60 million in credit card receivables during
the year. This increase in 1994 followed increases of $306,000 in 1993 and
$145,000 in 1992.
Intangibles amortization increased $442,000, or 133%, during the first
quarter of 1995 as compared to the first quarter of 1994, principally as a
result of the acquisition of 6 Republic Branches in May 1994 and the
reclassification of loan premiums as intangible assets. Intangibles amortization
increased $1.6 million in 1994 to $2.5 million principally as a result of
intangibles relating to the acquisition of branches, credit card receivables and
CF Mortgage. This increase in 1994 followed increases of $440,000 in 1993 and
$248,000 in 1992 . The increase in sundry noninterest expense was primarily
attributable to the overhead and operating expenses associated with higher
lending and deposit activities. The largest items of sundry noninterest expense
were stationery, supplies and printing, telephone, postage and advertising.
SELECTED FINANCIAL RATIOS
The following table includes, for the periods indicated, selected financial
ratios of the Company.
SELECTED FINANCIAL RATIOS
<TABLE>
<CAPTION>
THREE MONTHS
YEARS ENDED DECEMBER 31, ENDED MARCH 31,
1990 1991 1992 1993 1994 1994 1995
<S> <C> <C> <C> <C> <C> <C> <C>
Return on average assets (annualized)................... 0.36 % 0.41 % 0.46 % 0.68 % (0.21) % 0.69 % 0.85 %
Return on average equity (annualized)................... 3.89 4.98 5.44 8.16 (2.61) 8.90 11.62
Return on average common equity (annualized)............ 3.89 4.98 4.75 7.93 (8.77) 9.21 14.61
Average equity as a percentage of average assets........ 9.30 8.17 8.37 8.36 8.23 7.76 7.34
Dividend payout ratio................................... 0.00 0.00 0.00 0.00 n/m 20.83 20.00
</TABLE>

<PAGE>

FINANCIAL CONDITION
LOAN PORTFOLIO
The Company's loan portfolio consists of commercial mortgage loans,
commercial loans, consumer loans and one-to-four family residential mortgage
loans. A substantial portion of these borrowers are located in South Carolina
and are concentrated in the Company's market areas. The Company has no foreign
loans or loans for highly leveraged transactions. The loan portfolio does not
contain any industry concentrations of credit risk exceeding 10% of the
portfolio. At March 31, 1995, the Company had total loans outstanding of $877.1
million which equaled approximately 93% of the Company's total deposits and
approximately 77% of the Company's total assets.
The Company's loans increased 36% from $643.4 million at March 31, 1994 to
$877.1 million at March 31, 1995. Of this increase, $37.5 million resulted from
loan acquisitions. This increase was net of $51.0 million of mortgage loans
sold, which were predominantly current production fixed rate mortgage loans. The
Company's loans increased 51% in 1994 and 39% in 1993. These increases were net
of mortgage loans sold, which were predominantly current production fixed rate
mortgage loans.
The Company has experienced significant growth in its commercial and
commercial mortgage loans over the past several years. Furthermore, these loans
constitute approximately 54% of the Company's total loans. There are certain
risks inherent in making all loans, including risks resulting from uncertainties
as to the future value of collateral, risks resulting from changes in economic
and industry conditions and risks inherent in dealing with individual borrowers.
However, commercial and commercial mortgage loans are generally more risky than
one-to-four family or consumer loans because they are unique in character, are
generally larger in amount and are dependent upon the borrower's ability to
generate cash to service the loan. For additional information regarding the
Company's procedures in dealing with credit risks, see "Business -- Credit
Review and Philosophy."
The Company had loans to 39 borrowers having principal amounts ranging from
$2 million to $5 million, which loans accounted for $112.5 million, or 13%, of
the Company's loan portfolio in the first quarter of 1995. The Company had loans
to ten borrowers having principal amounts in excess of $5 million, which loans
accounted for $65.8 million, or 7%, of the Company's loan portfolio in the first
quarter of 1995. Any material deterioration in the quality of any of these
larger loans could have a significant impact on the Company's earnings and its
ability to make payments on the Notes.
The table below sets forth the composition of the Company's loan portfolio
at the dates indicated.
LOAN PORTFOLIO COMPOSITION
<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1990 1991 1992 1993 1994 1994 1995
<S> <C> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
Commercial, financial and agricultural......... $ 64,534 $ 91,041 $106,858 $132,530 $175,221 $135,331 $189,389
Real Estate
Construction................................. 17,808 20,791 17,191 21,242 23,103 25,466 30,397
Mortgage
Residential............................... 118,219 118,591 115,813 148,888 198,590 101,313 239,156
Commercial and multifamily (1)............ 56,475 63,469 87,566 150,764 268,628 242,703 278,454
Consumer....................................... 46,486 82,104 96,886 135,616 159,241 140,372 139,311
Loans held for sale............................ -- -- 6,801 7,700 71,695 -- 1,100
Total gross loans....................... 303,522 375,996 431,115 596,740 896,478 645,185 877,807
Unearned income................................ (2,590) (3,765) (3,943) (2,221) (873) (1,738) (685)
Total loans net of unearned income...... 300,932 372,231 427,172 594,519 895,605 643,447 877,122
Allowance for loan losses...................... (2,731) (4,235) (4,884) (6,270) (5,669) (6,048) (7,961)
Total net loans......................... $298,201 $367,996 $422,288 $588,249 $889,936 $637,399 $869,161
</TABLE>

(1) The majority of these loans were made to operating businesses where real
property has been taken as additional collateral.
20

<PAGE>
LOAN PORTFOLIO COMPOSITION BY PERCENTAGES
<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1990 1991 1992 1993 1994 1994 1995
<S> <C> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
Commercial, financial and agricultural......... 21.26% 24.21% 24.79% 22.21% 19.55% 20.98% 21.58%
Real Estate
Construction................................. 5.87 5.53 3.99 3.56 2.58 3.95 3.46
Mortgage
Residential............................... 38.94 31.54 26.86 24.95 22.15 15.70 27.24
Commercial and multifamily (1)............ 18.61 16.88 20.31 25.26 29.96 37.62 31.72
Consumer....................................... 15.32 21.84 22.47 22.73 17.76 21.75 15.87
Loans held for sale............................ -- -- 1.58 1.29 8.00 -- 0.13
Total gross loans....................... 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Total gross loans (dollars)............. $303,522 $375,996 $431,115 $596,740 $896,478 $645,185 $877,807
</TABLE>

(1) The majority of these loans were made to operating businesses where real
property has been taken as additional collateral.
Management expects that less than one third of the principal balance of the
loans scheduled to mature in the next twelve months will be paid out completely.
The remainder of the loans will be renewed in the normal course of business.
The following table shows the maturity distribution and interest
sensitivity of a portion of the Company's loan portfolio at March 31, 1995.
LOAN MATURITY AND INTEREST SENSITIVITY
<TABLE>
<CAPTION>
OVER ONE
BUT OVER
ONE YEAR LESS THAN FIVE
OR LESS FIVE YEARS YEARS TOTAL
<S> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
Commercial, financial, agricultural and commercial real estate................ $360,813 $ 76,235 $30,796 $467,844
Real estate -- construction................................................... 25,664 4,733 -- 30,397
Total of loans with:
Predetermined interest rates................................................ 49,337 21,003 30,796 101,136
Floating interest rates..................................................... 337,140 59,965 -- 397,105
</TABLE>

ALLOWANCE FOR LOAN LOSSES
Management maintains an allowance for loan losses which it believes is
adequate to cover possible losses in the loan portfolio. However, management's
judgment is based upon a number of assumptions about future events which are
believed to be reasonable, but which may or may not prove valid. Thus, there can
be no assurance that charge-offs in future periods will not exceed the allowance
for loan losses or that additional increases in the allowance for loan losses
will not be required.
The allowance for loan losses is established through charges in the form of
a provision for loan losses and purchased loan adjustments. Loan losses and
recoveries are charged or credited directly to the allowance. The amount charged
to the provision for loan losses by the Company is based on management's
judgment as to the amount required to maintain an allowance adequate to provide
for potential losses in the Company's loan portfolio. The level of this
allowance is dependent upon the total amount of past due loans, general economic
conditions and management's assessment of potential losses.
During 1991, management reviewed the allowance for loan losses in light of
deterioration in the national and South Carolina economies, as well as increased
originations of commercial and consumer loans at CF Savings Bank. In order to
achieve an allowance that reflected this review, the Company increased its
provision for loan losses by approximately 113%. During 1993, 1994 and the first
quarter of 1995, the allowance for loan losses was comparable, as a percentage
of loans, to the levels set in 1991 and 1992. Provisions for loan losses of $1.0
million, $1.1 million and $3.0 million were made in 1993, 1994 and the first
quarter of 1995, respectively.
In addition, various regulatory agencies, as a part of their examination
process, periodically review Carolina First Bank's allowance for loan losses and
real estate owned. Such agencies may require Carolina First Bank to recognize
changes to the allowance based on their judgments about information available to
them at the time of their examination.
21

<PAGE>
The provision for loan losses was $20,000 and $3.0 million in the first
quarters of 1994 and 1995, respectively. The $3.0 million provision for loan
losses in the first quarter of 1995 was made for several reasons. As a general
matter, management believed that such provision was appropriate in view of a
potential slowdown in the economy (which became evident in the first quarter)
and an increase in the prime interest rate in February 1995, both of which could
make it more difficult for certain borrowers to repay loans. Furthermore,
management believed that such provision was prudent because the Company was
expanding in new markets and was expecting to experience continued strong growth
in loans. Also, the mix of its loan portfolio was changing such that a number of
small loans were being replaced by larger credits, particularly in connection
with the Securitization, which occurred in January 1995. Finally, management
determined that such provision was warranted because of the increase in
chargeoffs in the first quarter to $782,000. At March 31, 1995, the Company's
allowance for loan losses as a percentage of nonperforming assets and other real
estate owned was 262.7%, compared to 160.9% a year earlier. The allowance for
loan losses as a percentage of total loans was 0.95% and 0.91% at March 31, 1994
and 1995, respectively.
The table below presents an allocation of the allowance for loan losses by
the different loan categories at December 31 for each of the last five years and
at March 31, 1995. The breakdown is based on a number of qualitative factors and
the amounts presented are not necessarily indicative of actual amounts which
will be charged to any particular category.
COMPOSITION OF ALLOWANCE FOR LOAN LOSSES
<TABLE>
<CAPTION>
DECEMBER 31
1990 1991 1992 1993 1994
PERCENT PERCENT PERCENT PERCENT PERCENT
OF LOANS OF LOANS OF LOANS OF LOANS OF LOANS
ALLOWANCE IN ALLOWANCE IN ALLOWANCE IN ALLOWANCE IN ALLOWANCE IN
BREAKDOWN CATEGORY BREAKDOWN CATEGORY BREAKDOWN CATEGORY BREAKDOWN CATEGORY BREAKDOWN CATEGORY
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
Commercial, financial
and agricultural...... $ 823 21.26 % $ 1,146 24.21 % $ 1,666 24.79 % $ 1,744 22.21 % $ 1,638 19.55%
Real estate:
Construction......... 183 5.87 255 5.53 338 3.99 128 3.56 115 2.58
Mortgage:
Residential........ 60 38.94 100 31.54 250 26.86 100 24.95 100 22.15
Commercial and
multifamily...... 880 18.61 1,427 16.88 1,135 20.31 542 25.26 506 29.96
Consumer and loans held
for sale.............. 512 15.32 912 21.84 1,007 24.05 3,130 24.02 2,745 25.76
Unallocated............ 273 -- 427 -- 488 -- 626 -- 565 --
Total.............. $ 2,731 100.00 % $ 4,267 100.00 % $ 4,884 100.00 % $ 6,270 100.00 % $ 5,669 100.00%
<CAPTION>
MARCH 31
1995
PERCENT
OF LOANS
ALLOWANCE IN
BREAKDOWN CATEGORY
<S> <C> <C>
Commercial, financial
and agricultural...... $ 2,021 21.58 %
Real estate:
Construction......... 250 3.46
Mortgage:
Residential........ 197 27.37
Commercial and
multifamily...... 1,283 31.72
Consumer and loans held
for sale.............. 3,414 15.87
Unallocated............ 796 --
Total.............. $ 7,961 100.00 %
</TABLE>

<PAGE>
SUMMARY OF LOAN LOSS EXPERIENCE
The table below summarizes certain information with respect to the
Company's allowance for loan losses and the composition of charge-offs and
recoveries for each of the last five years and for the first quarter of 1995.
SUMMARY OF LOAN LOSS EXPERIENCE
<TABLE>
<CAPTION>
THREE MONTHS
YEARS ENDED DECEMBER 31, ENDED MARCH 31,
1990 1991 1992 1993 1994 1994 1995
<S> <C> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
Loan loss reserve at beginning of period....... $ 2,290 $ 2,731 $ 4,235 $ 4,884 $ 6,270 $ 6,270 $ 5,669
Valuation allowance for loans acquired......... -- 450 255 1,811 1,078 -- --
Charge-offs:
Commercial, financial and agricultural....... 298 311 1,177 332 394 68 207
Real estate -- construction.................. -- 31 30 -- 85 -- --
Real estate -- mortgage...................... 12 88 115 234 233 37 --
Consumer..................................... 176 230 195 381 542 147 174
Credit cards................................. -- -- -- 488 1,641 6 401
Total loans charged-off................... 486 660 1,517 1,435 2,895 258 782
Recoveries:
Commercial, financial and agricultural....... 103 -- 42 12 59 -- 49
Real estate -- construction.................. -- -- 1 -- -- -- --
Real estate -- mortgage...................... -- -- 18 23 9 -- 3
Consumer..................................... 30 27 22 14 58 15 11
Credit cards................................. -- -- -- -- -- 1 1
Total loans recovered..................... 133 27 83 49 126 16 64
Net charge-offs................................ 353 633 1,434 1,386 2,769 242 718
Provision charged to expense................. 794 1,687 1,828 961 1,090 20 3,010
Loan loss reserve at end of period............. $ 2,731 $ 4,235 $ 4,884 $ 6,270 $ 5,669 $ 6,048 $ 7,961
Average loans.................................. $276,228 $335,509 $406,288 $519,710 $753,482 $608,327 $864,977
Total loans, net of unearned income
(period end)................................. 300,932 372,231 427,172 594,519 895,605 643,447 877,122
Net charge-offs as a percentage of average
loans........................................ 0.13% 0.19% 0.35% 0.27% 0.37% 0.16% 0.33%
Allowance for loan losses as a percentage
of loans..................................... 0.91 1.15 1.14 1.05 0.63 0.95 0.91
</TABLE>

In January 1995, the Company transferred $97 million of receivables
associated with its credit card portfolio to the Trust in connection with the
Securitization. Of the increase in consumer loan charge-offs experienced during
1994, $1.6 million resulted from charge-offs associated with credit card
receivables. Charge-offs in 1993 included $488,000 from charge-offs associated
with credit card receivables during a three month period during which the
Company had no escrow balance against which to offset losses. Except for 1994
and a three month period in 1993, the Company had escrow balances established by
the seller of the credit card accounts against which substantially all of the
credit card losses were offset.
23

<PAGE>
The following table sets forth information regarding the Company's
nonperforming assets for the dates indicated. Management does not believe that,
as of March 31, 1995 other than as set forth in the table below, the Company has
any loans where known information concerning credit problems causes senior
management to have serious doubts as to the ability of such borrowers to comply
with present loan repayment terms. At March 31, 1995, the Company was closely
monitoring loans totaling approximately $8.5 million to three borrowers, which
were experiencing financial difficulty. None of these loans was included in
nonperforming assets or loans 90 days or more past due and still accruing
interest at March 31, 1995. The table includes nonperforming assets for ACNB,
which were significantly higher, as a percentage of total loans, than those of
Carolina First Bank. The nonperforming assets ratios in the table below are
shown both including and excluding ACNB.
NONPERFORMING ASSETS
<TABLE>
<CAPTION>
THREE MONTHS
YEARS ENDED DECEMBER 31, ENDED MARCH 31,
1990 1991 1992 1993 1994 1994 1995
<S> <C> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
Nonaccrual loans................................................ $1,484 $1,779 $2,147 $2,097 $1,807 $2,148 $ 618
Restructured loans.............................................. -- -- 353 -- 675 -- 675
Total nonperforming loans.................................. 1,484 1,779 2,500 2,097 2,482 2,148 1,293
Other real estate owned......................................... 699 1,446 2,519 2,434 1,644 1,611 1,737
Total nonperforming assets................................. $2,183 $3,225 $5,019 $4,531 $4,126 $3,759 $3,030
Loans 90 days or more past due and still accruing interest...... $ 605 $1,784 $2,127 $2,060 $1,285 $1,148 $2,347
Total nonperforming assets as a percentage of loans and other
real estate owned (including ACNB)............................ 0.73% 0.87% 1.18% 0.77% 0.46% 0.58% 0.34%
Total nonperforming assets as a percentage of loans and other
real estate owned (excluding ACNB)............................ 0.69 0.46 0.49 0.28 0.25 0.20 0.17
Allowance for loan losses as a percentage of nonperforming loans
(including ACNB).............................................. 184.03 238.06 195.36 299.00 228.40 281.56 615.70
</TABLE>

Carolina First Bank ceases to recognize interest income on a loan when, in
the judgment of management, the interest is not collectible in the normal course
of business. Foregone interest income that would have been recorded if the loans
had been current in accordance with their original terms and had been
outstanding throughout the period or since origination was approximately
$407,000 in 1992, $507,000 in 1993, $178,000 in 1994, and $63,000 in the first
quarter of 1995. Interest income from these loans included in net income was
$54,000 in 1992, $43,000 in 1993, $28,000 in 1994, and $3,000 in the first
quarter of 1995.
INVESTMENT PORTFOLIO
Debt securities held as assets are classified as investment securities,
securities available for sale or trading securities. Effective January 1, 1994,
the Company adopted Statement of Financial Accounting Standards 115, "Accounting
for Certain Investments in Debt and Equity Securities." Securities classified as
investments are carried at cost, adjusted for the amortization of premiums and
the accretion of discounts. In order to qualify as an investment asset, the
Company must have the ability and a positive intention to hold them to maturity.
Securities available for sale are carried at market value with unrealized gains
or losses reported in stockholders' equity (net of tax effect). These securities
may be disposed of if management believes that the sale would provide the
Company and its subsidiaries with increased liquidity or, based upon prevailing
or projected economic conditions, that such sales would be a safe and sound
banking practice and in the best interest of the stockholders. Trading
securities are carried at market value with adjustments for unrealized gains or
losses reported in noninterest income. The Company's policy is to acquire
trading securities only to facilitate their sale to customers.
The Company's subsidiaries are generally limited to investments in (i)
United States Treasury securities or United States Government guaranteed
securities, (ii) securities of United States Government agencies, (iii)
mortgage-backed securities, (iv) general obligation municipal bonds and revenue
bonds which are investment grade rated and meet certain other standards, and (v)
money market instruments which are investment grade rated and meet certain other
standards. To date, the Company has not used derivative products.
24

<PAGE>
The following table sets forth the carrying value of the securities of the
Company at the end of each of the last three years and at March 31, 1995.
SECURITIES
<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1992 1993 1994 1995
<S> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
U.S. Treasury securities...................................................... $30,574 $ 16,316 $ 27,705 $ 28,008
Obligations of U.S. Government agencies and corporations...................... 38,311 88,993 69,815 77,291
Obligations of states and political subdivisions.............................. 3,316 11,907 20,628 20,137
Other securities.............................................................. 6,099 4,262 2,002 216
$78,300 $121,478 $120,150 $ 125,652
</TABLE>

The following tables indicate the carrying value of each investment
category due in one year or less, after one year through five years, after five
years through ten years, and after ten years. The weighted average yield for
each range of maturities at March 31, 1995 is also shown.
TYPES AND MATURITY GROUPINGS OF INVESTMENTS
HELD FOR INVESTMENT
<TABLE>
<CAPTION>
WITHIN AFTER ONE BUT AFTER FIVE BUT
ONE YEAR WITHIN FIVE YEARS WITHIN TEN YEARS AFTER TEN YEARS TOTAL
WEIGHTED WEIGHTED WEIGHTED WEIGHTED
CARRYING AVERAGE CARRYING AVERAGE CARRYING AVERAGE CARRYING AVERAGE CARRYING
VALUE YIELD VALUE YIELD VALUE YIELD VALUE YIELD VALUE
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
U.S. Treasury............... $ 200 8.50% $ 5,990 5.18% $-- -- % $ -- -- % $ 6,190
U.S. Government agencies and
corporations.............. -- -- 34,531 5.70 -- -- 8,768 6.25 43,299
States and political
subdivisions (1).......... 500 6.60 6,170 4.23 8,913 4.67 4,554 5.06 20,137
Other securities............ -- -- -- -- 53 -- -- -- 53
Total (1)................. $ 700 7.14% $46,691 5.44% $8,966 4.67% $13,322 5.84% $69,679
<CAPTION>
WEIGHTED AVERAGE
AVERAGE MATURITY
YIELD IN YEARS
<S> <C> <C>
U.S. Treasury............... 5.29% 3.51
U.S. Government agencies and
corporations.............. 5.81 3.23
States and political
subdivisions (1).......... 4.67 5.81
Other securities............ -- --
Total (1)................. 5.43% 3.82
</TABLE>

AVAILABLE FOR SALE
<TABLE>
<CAPTION>
WITHIN AFTER ONE BUT AFTER FIVE BUT
ONE YEAR WITHIN FIVE YEARS WITHIN TEN YEARS AFTER TEN YEARS TOTAL
WEIGHTED WEIGHTED WEIGHTED WEIGHTED
CARRYING AVERAGE CARRYING AVERAGE CARRYING AVERAGE CARRYING AVERAGE CARRYING
VALUE YIELD VALUE YIELD VALUE YIELD VALUE YIELD VALUE
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
U.S. Treasury............... $16,296 4.26% $ 5,522 5.85% $ -- -- % $ -- -- % $21,818
U.S. Government agencies and
corporations.............. 26,256 5.34 7,736 4.72 -- -- -- -- 33,992
States and political
subdivisions (1).......... -- -- -- -- -- -- -- -- --
Other securities............ 163 -- -- -- -- -- -- -- 163
Total (1)................. $42,715 4.90% $13,258 5.19% $ -- -- % $ -- -- % $55,973
<CAPTION>
WEIGHTED AVERAGE
AVERAGE MATURITY
YIELD IN YEARS
<S> <C> <C>
U.S. Treasury............... 4.66% 0.91
U.S. Government agencies and
corporations.............. 5.00 0.72
States and political
subdivisions (1).......... -- --
Other securities............ -- --
Total (1)................. 4.97% 0.74
</TABLE>

(1) Fully tax-equivalent basis at a 35% tax rate.
DEPOSITS
Carolina First Bank's primary source of funds for loans and investments is
its deposits which are gathered through Carolina First Bank's branch network.
Competition for deposit accounts is primarily based on the interest rates paid
thereon and the convenience of and the services offered by the branch locations.
The Company's pricing policy with respect to deposits takes into account the
liquidity needs of the Company, the direction and level of interest rates, and
local market conditions. Certificates of deposit in amounts in excess of
$100,000 are held primarily by customers in the Company's market areas. It is
the Company's policy not to use deposit brokers. Approximately $229 million, or
24%, of the Company's
25

<PAGE>
deposits were insured through the Savings Association Insurance Fund at December
31, 1994. See "Business -- Supervision and Regulation -- Insurance."
The following table sets forth the distribution of the Company's deposit
accounts at the dates indicated on each category of deposits:
DEPOSITS
<TABLE>
<CAPTION>
DECEMBER 31
1990 1991 1992 1993 1994
PERCENT PERCENT PERCENT PERCENT PERCENT
OF OF OF OF OF
AMOUNT DEPOSITS AMOUNT DEPOSITS AMOUNT DEPOSITS AMOUNT DEPOSITS AMOUNT DEPOSITS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
Demand deposit
accounts...... $ 25,638 7.73 % $ 27,765 6.18 % $ 43,069 8.32 % $ 71,094 9.30 % $124,530 12.93%
NOW accounts... 15,160 4.57 27,660 6.16 39,299 7.59 82,891 10.84 114,030 11.83
Savings
accounts...... 12,504 3.77 16,468 3.67 24,317 4.70 68,731 8.99 92,776 9.63
Money market
accounts...... 85,411 25.78 116,707 25.98 129,042 24.93 151,019 19.75 151,392 15.71
Time
deposits...... 143,861 43.40 199,906 44.49 205,713 39.73 277,868 36.34 351,846 36.52
Time deposits
of $100,000 or
over.......... 48,895 14.75 60,714 13.52 76,259 14.73 113,074 14.78 128,896 13.38
Total
deposits.... $331,469 100.00 % $449,220 100.00 % $517,699 100.00 % $764,677 100.00 % $963,470 100.00%
<CAPTION>
MARCH 31
1995
PERCENT
OF
AMOUNT DEPOSITS
<S> <C> <C>
Demand deposit
accounts...... $119,376 12.66 %
NOW accounts... 109,178 11.58
Savings
accounts...... 72,429 7.68
Money market
accounts...... 142,605 15.12
Time
deposits...... 371,691 39.41
Time deposits
of $100,000 or
over.......... 127,829 13.55
Total
deposits.... $943,108 100.00 %
</TABLE>

The Company uses its deposit base as its primary source of funds. Deposits
grew 26% from $764.7 million at December 31, 1993 to $963.5 million at December
31, 1994. Of the $198.8 million increase in deposits, approximately $141.2
million resulted from the acquisition of the 6 Republic Branches and Citadel
Federal Savings and Loan Association. Of the $247.0 million increase in deposits
in 1993, approximately $243.3 million resulted from the acquisitions of the
Republic-Piedmont Branch, the 12 Republic Branches and the three Columbia, South
Carolina branches of Bay Savings Bank, FSB (the "Bay Savings Bank Branches"). No
deposits were acquired in 1992.
The following table sets forth information with respect to the maturity of
the Company's certificates of deposit greater than $100,000 at March 31, 1995.
CERTIFICATES OF DEPOSIT GREATER THAN $100,000
(DOLLARS IN THOUSANDS)
<TABLE>
<S> <C>
Maturing in three months or less...................................................................... $ 61,084
Maturing in over three through six months............................................................. 31,797
Maturing in over six through twelve months............................................................ 21,204
Maturing in over twelve months........................................................................ 13,744
Total............................................................................................ $127,829
</TABLE>

Generally, certificates of deposits greater than $100,000 have a higher
degree of interest rate sensitivity than other certificates of deposit. The
percentage of Company deposits represented by certificates of deposit greater
than $100,000 is higher than the percentage of such deposits held by the
Company's peers. However, the Company does not believe that its relatively high
percentage of certificates of deposits greater than $100,000 will have a
material adverse effect on the Company because such certificates are principally
held by long-term customers located in Carolina First Bank's market areas.
LIQUIDITY AND INTEREST RATE SENSITIVITY
Asset/liability management is the process by which the Company monitors and
controls the mix and maturities of its assets and liabilities. The essential
purposes of asset/liability management are to ensure adequate liquidity and to
maintain an appropriate balance between interest sensitive assets and
liabilities. Liquidity management involves meeting the cash flow requirements of
the Company. These cash flow requirements primarily involve withdrawals of
deposits, extensions of credit, payment of operating expenses and repayment of
purchased funds. The Company's principal sources of funds for liquidity purposes
are customer deposits, principal and interest payments on loans, maturities and
sales of debt securities, temporary
26

<PAGE>
investments and earnings. Temporary investments averaged 3.31% of earning assets
in 1992, 2.87% in 1993, 1.50% in 1994 and 0.64% in the first quarter of 1995.
Management believes that the Company maintains an adequate level of liquidity by
retaining liquid assets and other assets that can easily be converted into cash,
and by maintaining access to alternate sources of funds, including federal funds
purchased from correspondent banks and borrowings from the FHLB.
The liquidity ratio is an indication of a company's ability to meet its
short-term funding obligations. FDIC examiners suggest that a commercial bank
maintain a liquidity ratio of between 20% and 25%. At March 31, 1995, excluding
ACNB, Carolina First Bank's liquidity ratio was approximately 15.21%. Excluding
ACNB, the liquidity ratio averaged 15.91% in 1994 and 15.23% in the first
quarter of 1995. At March 31, 1995, Carolina First Bank had unused short-term
lines of credit totaling approximately $33.7 million. All of the lenders have
reserved the right to withdraw these lines of credit at their option. In
addition, Carolina First Bank has access to borrowing from the FHLB. At March
31, 1995, unused borrowing capacity from the FHLB totaled $91.8 million.
Management believes that these sources are adequate to meet its liquidity needs.
The Company's core deposit base consists of consumer time deposits, savings
and NOW accounts, money market accounts and checking accounts. Although core
deposits are becoming increasingly interest sensitive for both the Company and
the industry as a whole, core deposits continue to provide the Company with a
large and stable source of funds. Core deposits averaged 75.1% of assets in
1992, 73.2% in 1993, 73.2% in 1994 and 73.1% in the first quarter of 1995. The
Company closely monitors its reliance on certificates of deposit greater than
$100,000, which are generally considered less stable than core deposits. The
Company's certificates of deposit in excess of $100,000 are held primarily by
customers in the Company's market areas. In 1994, the Company modified its
funding strategy to rely more on advances from the FHLB because management
determined that, due to increased competition for deposits, the marginal cost of
borrowing from the FHLB is lower than the marginal cost of raising deposits. At
March 31, 1995, FHLB advances totaled $68.2 million, compared to $18.0 million
at March 31, 1994.
The Company has certain cash needs, including general operating expenses
and the payment of dividends and interest on borrowings. The Company generates
cash to meet these needs primarily through management fees and dividends paid to
it by its subsidiaries and secondarily from existing cash reserves, sales of
marketable investment securities, interest income on its investment assets and
certain other vehicles. See "Business -- Supervision and Regulation."
The interest sensitivity gap is the difference between total interest
sensitive assets and liabilities in a given time period. The objective of
interest sensitivity management is to maintain reasonably stable growth in net
interest income despite changes in market interest rates by maintaining the
proper mix of interest sensitive assets and liabilities. Over the past several
years, the environment in which financial institutions operate has been
characterized by volatile interest rates and greater reliance on
market-sensitive deposits, increasing both the importance and the difficulty of
interest sensitivity management. Management seeks to maintain a general
equilibrium between interest sensitive assets and liabilities in order to
insulate net interest income from significant adverse changes in market rates.
The Company uses a variety of tools to analyze the Company's interest
sensitivity. The table below is a "static gap" presentation which reflects the
difference between total interest sensitive assets and liabilities within
certain time periods. At December 31, 1994 on a cumulative basis through twelve
months, rate-sensitive liabilities exceeded rate-sensitive assets, resulting in
a liability sensitive position at the end of 1994 of $222.1 million. Management
expects that its net interest margin and net income would increase, in the short
term, in a rising interest rate environment as the interest rates charged on
approximately 70% of the commercial loan portfolio is tied to the prime rate and
would reprice immediately in the event of a corresponding increase in the prime
rate. In a falling rate environment, the Company's net interest margin and net
income would decrease for the short term. Management believes that the Company's
savings and interest-bearing transaction accounts are not interest rate
sensitive and, accordingly, would not be repriced upward as quickly or to the
same degree as the Company's earning assets.
27

<PAGE>
The following table illustrates the Company's interest rate sensitivity at
December 31, 1994 as well as the cumulative gap position at December 31, 1994
and March 31, 1995.
INTEREST RATE SENSITIVITY
<TABLE>
<CAPTION>
TOTAL OVER ONE
0-3 4-6 7-12 WITHIN YEAR OR
MONTHS MONTHS MONTHS ONE YEAR NON-SENSITIVE TOTAL
<S> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
ASSETS
Earning assets
Loans, net of unearned income............... $505,802 $ 29,707 $ 48,732 $ 584,241 $ 311,364 $ 895,605
Investment securities, taxable.............. 19,025 2,796 23,916 45,737 55,537 101,274
Investment securities, nontaxable........... 1,346 -- 50 1,396 18,635 20,031
Federal funds sold.......................... 2,980 -- -- 2,980 -- 2,980
Interest bearing deposits with other
banks.................................... 500 -- -- 500 -- 500
Total earning assets................... 529,653 32,503 72,698 634,854 385,536 1,020,390
Non-earning assets, net....................... -- -- -- -- 141,332 141,332
Total assets........................... $529,653 $ 32,503 $ 72,698 $ 634,854 $ 526,868 $1,161,722
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Interest-bearing liabilities
Interest-bearing deposits
Interest checking...................... $105,966 $ -- $ -- $ 105,966 $ -- $ 105,966
Savings................................ 92,745 -- -- 92,745 -- 92,745
Money market........................... 151,312 -- -- 151,312 -- 151,312
Certificates of deposit................ 139,647 110,034 109,332 359,013 79,881 438,894
Other.................................. 20,834 10,826 10,209 41,869 12,734 54,603
Total interest-bearing deposits........ 510,504 120,860 119,541 750,905 92,615 843,520
Short-term borrowings.................... 105,986 -- 52 106,038 -- 106,038
Long-term borrowings..................... -- -- -- -- 1,162 1,162
Total interest-bearing liabilities..... 616,490 120,860 119,593 856,943 93,777 950,720
Noninterest bearing liabilities
Noninterest bearing deposits........... -- -- -- -- 119,950 119,950
Other noninterest bearing liabilities,
net................................. -- -- -- -- 8,618 8,618
Total liabilities...................... 616,490 120,860 119,593 856,943 222,345 1,079,288
Stockholders' equity.......................... -- -- -- -- 82,434 82,434
Total liabilities and stockholders'
equity.............................. $616,490 $ 120,860 $ 119,593 $ 856,943 $ 304,779 $1,161,722
Interest sensitive gap........................ $(86,837) $ (88,357) $ (46,895) $(222,089) $ 222,089 $ --
Cumulative interest sensitive gap at December
31, 1994.................................... $(86,837) $(175,194) $(222,089) $(222,089)
Cumulative interest sensitive gap at
March 31, 1995.............................. $(98,647) $(208,610) $(235,731) $(235,731)
</TABLE>

While the static gap is a widely used measure of interest sensitivity,
management believes it is not a precise indicator of the Company's interest
sensitivity position. The table above presents a static view of the timing of
maturities and repricing opportunities, without taking into consideration that
changes in interest rates do not affect all assets and liabilities equally. For
example, rates paid on a substantial portion of savings and core time deposits
may contractually change within a relatively short time frame, but those rates
are significantly less interest sensitive than market based rates such as those
paid on non-core deposits. Accordingly, a liability sensitive static gap
position is not as indicative of the Company's true interest sensitivity as
would be the case for an organization which depends to a greater extent on
purchased funds to support earning
28

<PAGE>
assets. Net interest income may be impacted by other significant factors in a
given interest rate environment, including the spread between the prime rate and
the incremental borrowing cost and the volume and mix of earning asset growth.
Accordingly, the Company uses an asset/liability simulation model which
quantifies balance sheet and earnings variations under different interest rate
environments as its primary tool to measure and manage interest rate risk.
CAPITAL RESOURCES
The Company's capital needs have been met principally through public
offerings of common and preferred stock and through the retention of earnings.
In addition, the Company issued common and preferred stock in connection with
the acquisitions of CF Savings Bank, CF Mortgage and ACNB.
The Company's initial public offering in 1986 raised $15.3 million in
common equity and, to date, represents the largest amount of initial equity
raised in connection with the startup of a financial institution in South
Carolina. Other public offerings of capital stock include the offering of the
Series 1992 Preferred Stock in May 1992, which raised $10.3 million, the
offering of the Series 1993 Preferred Stock in March 1993, which raised $14.5
million, and the offering of the Series 1994 Preferred Stock in April 1994,
which raised $21.4 million. In December 1993, the Company redeemed the Series
1992 Preferred Stock. In connection with such redemption, substantially all of
the outstanding shares of Series 1992 Preferred Stock were converted into
1,089,674 shares of Common Stock.
The Company anticipates that approximately $15 million of the proceeds of
this offering will be contributed to Carolina First Bank to provide additional
capital to support internal growth and acquisitions. The balance of the proceeds
will be used for general corporate purposes. Pending such use, the net proceeds
will be invested in marketable investment securities.
Risk-based capital guidelines for financial institutions adopted by the
regulatory authorities went into effect after December 31, 1991. The risk-based
capital rules are designed to make regulatory capital requirements more
sensitive to differences in asset risk profile among financial institutions, to
account for off-balance sheet exposure and to minimize disincentives for holding
liquid assets. Risk-based capital guidelines have not had a material effect on
the Company's operations or on the operations of its subsidiaries. However, the
guidelines require that intangible assets be deducted when computing risk-based
capital ratios. Acquisitions accounted for using the purchase method of
accounting generally create intangible assets. Consequently, the Company's
ability to make cash acquisitions in the future using the purchase method of
accounting may be adversely affected. Intangible assets created as a result of
the purchase method of accounting also reduce the Company's tangible book value.
The ability of the Company to make acquisitions using the pooling of interests
method of accounting will not be affected by the guidelines. Acquisitions using
the pooling of interests methods of accounting involve the issuance of equity
securities in exchange for the securities of the acquired company.
Book value per share at December 31, 1993 and 1994 and March 31, 1995 was
$10.08, $8.48 and $8.87, respectively. The decline in book value at December 31,
1994 was attributable to the one-time restructuring charges. Tangible book value
per share at December 31, 1993 and 1994 and March 31, 1995 was $7.12, $4.46 and
$5.05, respectively. Tangible book value was significantly below book value as a
result of the purchase premiums associated with branch acquisitions and the
purchase of CF Mortgage. Tangible book value declined during 1994 as a result of
the addition of intangible assets related to the branch acquisitions and
reclassifications of loan premiums as intangible assets.
Under the capital guidelines of the Board of Governors of the Federal
Reserve (the "Federal Reserve Board") and the FDIC, the Company and Carolina
First Bank are currently required to maintain a minimum risk-based total capital
ratio of 8%, with at least 4% being Tier 1 capital. Tier 1 capital consists of
common stockholders' equity, qualifying perpetual preferred stock and minority
interests in equity accounts of consolidated subsidiaries, less goodwill. In
addition, the Company and Carolina First Bank must maintain a minimum Tier 1
leverage ratio (Tier 1 capital to total assets) of at least 3%, but this minimum
ratio is increased by 100 to 200 basis points for other than the highest-rated
institutions.
At December 31, 1994, the Company and CF Savings Bank were in compliance
with each of the applicable regulatory capital requirements and exceeded the
"adequately capitalized" regulatory guidelines. Carolina First Bank exceeded the
"adequately capitalized" regulatory guidelines for the Tier 1 risk-based capital
and leverage ratios, but was "undercapitalized" for the total risk-based capital
ratio. In February 1995, the Company received a letter from the FDIC which
indicated that, based on its analysis of Carolina First Bank's Report of
Condition as of December 31, 1994, Carolina First Bank was undercapitalized
because its total risk-based capital ratio had fallen below 8% to 6.70%
(excluding ACNB), principally as a result of the inclusion of certain
off-balance sheet items as risk-weighted assets. As a result of the capital
deficiency, Carolina First Bank committed to (1) merge CF Savings Bank and
Carolina First Bank, (2) consummate the Securitization, (3) have the Company
29

<PAGE>
contribute capital of $3.5 million to Carolina First Bank, and (4) sell certain
purchased mortgage servicing rights. All of these steps were taken by March 31,
1995. Although these steps were the subject of an agreement between the Carolina
First Bank and the FDIC, the Company had determined to effect all of these
actions, except the $3.5 million capital contribution, prior to and independent
of the capital deficiency matter.
At the end of February, Carolina First Bank's total risk-based capital
ratio was 8.10% (excluding ACNB). Carolina First Bank has received a letter from
the FDIC confirming that it is adequately capitalized. Carolina First Bank
expects that its total risk-based capital ratio will continue to increase as a
result of monthly operating results, the consummation of the acquisition of MNB
(which Carolina First Bank expects to consummate in the second quarter of 1995)
and the contribution of approximately $15 million to Carolina First Bank in
connection with this offering.
Pursuant to the Federal Deposit Insurance Corporation Improvement Act of
1991 ("FDICIA") and as a result of its total risk-based capital ratio declining
below 8%, the Company, Carolina First Bank and the FDIC entered into a Capital
Maintenance Commitment and Guaranty Agreement (the "Guaranty Agreement")
pursuant to which the Company guaranteed that Carolina First Bank will comply
with the capital restoration plan described above until Carolina First Bank has
been adequately capitalized on average during each of four consecutive quarters.
The Guaranty Agreement provides that in the event Carolina First Bank fails to
comply with the applicable capital requirements, the Company will pay to
Carolina First Bank or its successors or assigns an amount equal to the lesser
of (a) 5% of Carolina First Bank's total assets at the time Carolina First Bank
was notified or deemed to have notice that Carolina First Bank was
undercapitalized, or (b) the amount which is necessary to bring Carolina First
Bank into compliance with all capital standards applicable to Carolina First
Bank at the time Carolina First Bank failed to so comply. In the event that the
Company failed to make any such payments, the Company would be subject to
certain remedial provisions under FDICIA. Management does not believe that it
will be required to make payments under the Guaranty Agreement or that Carolina
First Bank will not be at least adequately capitalized in the foreseeable
future. See "Business -- Supervision and Regulation -- General."
The following tables set forth certain capital ratios and the amount of
capital of the Company and Carolina First Bank at December 31, 1993 and 1994 and
March 31, 1995, giving full effect to the exclusion of intangible assets.
CAPITAL RATIOS
<TABLE>
<CAPTION>
TOTAL RISKED-BASED TIER 1 RISK-BASED
CAPITAL RATIO CAPITAL RATIO LEVERAGE RATIO
12/31/93 12/31/94 3/31/95 12/31/93 12/31/94 3/31/95 12/31/93 12/31/94
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Company.............................. 9.54% 8.21% 8.38% 8.52% 7.53% 7.47% 6.23% 5.54%
Carolina First Bank.................. 9.06 6.97 8.28 8.05 6.37 7.37 6.01 5.26
<CAPTION>

3/31/95
<S> <C>
Company.............................. 5.66%
Carolina First Bank.................. 5.77
</TABLE>

CAPITAL REQUIREMENTS
<TABLE>
<CAPTION>
MARCH 31, 1995
ACTUAL AMOUNTS REQUIRED TO BE EXCESS
AMOUNTS ADEQUATELY CAPITALIZED AMOUNTS
<S> <C> <C> <C>
(DOLLARS IN THOUSANDS)
COMPANY
Leverage............................................................. $65,374 $ 44,662 $20,712
Risk-based capital
Tier 1............................................................. 65,374 34,986 30,388
Total.............................................................. 73,336 69,972 3,364
CAROLINA FIRST BANK
Leverage............................................................. 64,339 44,590 19,749
Risk-based capital
Tier 1............................................................. 64,339 34,915 29,424
Total.............................................................. 72,301 69,830 2,471
</TABLE>

IMPACT OF INFLATION
Unlike most industrial companies, the assets and liabilities of financial
institutions such as the Company's subsidiaries are primarily monetary in
nature. Therefore, interest rates have a more significant effect on the
Company's performance than do the general levels of inflation in the price of
goods and services. While the Company's noninterest income and expense and the
interest rates earned and paid are affected by the rate of inflation, the
Company believes that the effects of inflation are generally manageable through
asset/liability management. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Liquidity and Interest Rate
Sensitivity."
INDUSTRY DEVELOPMENTS
Certain recently-enacted and proposed legislation could have an effect on
both the costs of doing business and the competitive factors facing the
financial institutions industry. The Company is unable at this time to assess
the impact of this legislation on its financial condition or operations. See
"Business -- Supervision and Regulation."
30

<PAGE>
UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL INFORMATION
In November 1994, the Company entered into an agreement to acquire MNB. The
Company expects that this acquisition will be consummated in the second quarter
of 1995. The Unaudited Pro Forma Combined Condensed Balance Sheet is based on
combining the historical consolidated balance sheet for the Company at March 31,
1995 and December 31, 1994 with the balance sheet of MNB at the same dates, and
adjusting for the issuance of additional shares expected to be issued in the
merger.
The Unaudited Pro Forma Combined Condensed Summary of Earnings combines the
consolidated statements of income of the Company for the years ended December
31, 1992, 1993 and 1994 and for the three months ended March 31, 1994 and 1995
with the statements of income of MNB for the same periods.
The merger is expected to be accounted for under the pooling of interest
method of accounting and pro forma data is derived in accordance with such
method.
Information set forth below should be read in conjunction with such
historical and pro forma financial statements and the notes thereto. The
unaudited pro forma information is provided for informational purposes only and
is not necessarily indicative of actual results that would have been achieved
had the merger been consummated at the beginning of the period presented, nor is
it necessarily indicative of future results.
UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET
DECEMBER 31, 1994
<TABLE>
<CAPTION>
PRO FORMA
COMPANY MNB COMBINED
<S> <C> <C> <C>
(DOLLARS IN THOUSANDS)
Assets:
Cash and due from banks.............................................................. $ 57,250 $ 2,500 $ 59,750
Federal funds sold................................................................... 2,980 1,440 4,420
Investment securities................................................................ 121,305 9,192 130,497
Loans................................................................................ 896,478 27,463 923,941
Less unearned income.............................................................. (873) -- (873)
Less allowance for loan losses.................................................... (5,669) (333) (6,002)
Net loans.................................................................... 889,936 27,130 917,066
Premises and equipment............................................................... 38,504 1,319 39,823
Other assets......................................................................... 51,747 1,047 52,794
$1,161,722 $42,628 $1,204,350
Liabilities and shareholders' equity:
Liabilities:
Deposits:
Noninterest-bearing............................................................. $ 124,530 $ 2,444 $ 126,974
Interest bearing................................................................ 838,940 35,834 874,774
Total deposits............................................................... 963,470 38,278 1,001,748
Borrowed funds.................................................................. 107,200 36 107,236
Other liabilities............................................................... 8,618 266 8,884
Total liabilities............................................................ 1,079,288 38,580 1,117,868
Total shareholders' equity................................................... 82,434 4,048 86,482
$1,161,722 $42,628 $1,204,350
</TABLE>

<PAGE>
UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET
MARCH 31, 1995
<TABLE>
<CAPTION>
PRO FORMA
COMPANY MNB COMBINED
<S> <C> <C> <C>
(DOLLARS IN THOUSANDS)
Assets:
Cash and due from banks.............................................................. $ 49,468 $ 1,497 $ 50,965
Federal funds sold................................................................... 780 1,960 2,740
Investment securities................................................................ 127,135 8,881 136,016
Loans................................................................................ 877,807 27,225 905,032
Less unearned income.............................................................. (685) -- (685)
Less allowance for loan losses.................................................... (7,961) (334) (8,295)
Net loans......................................................................... 869,161 26,891 896,052
Premises and equipment............................................................... 38,250 1,298 39,548
Other assets......................................................................... 51,167 973 52,140
$1,135,961 $41,500 $1,177,461
Liabilities and shareholders' equity:
Liabilities:
Deposits:
Noninterest-bearing............................................................. $ 119,376 $ 2,606 $ 122,182
Interest bearing................................................................ 823,732 34,358 858,090
Total deposits............................................................... 943,108 37,164 980,272
Borrowed funds.................................................................. 97,269 36 97,305
Other liabilities............................................................... 11,218 200 11,418
Total liabilities............................................................ 1,051,595 37,400 1,088,995
Total shareholders' equity................................................... 84,366 4,100 88,466
$1,135,961 $41,500 $1,177,461
</TABLE>

<PAGE>
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
THREE MONTHS
YEARS ENDED DECEMBER 31, ENDED MARCH 31,
1992 1993 1994 1994 1995
<S> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
Interest income
Interest and fees on loans........................... $ 39,788 $ 47,313 $ 70,679 $ 13,376 $ 21,227
Interest on securities............................... 4,277 6,999 6,671 1,634 1,771
Other interest income................................ 694 654 623 194 148
Total interest income............................. 44,759 54,966 77,973 15,204 23,146
Interest expense
Interest on deposits................................. 23,760 24,055 30,750 6,389 9,084
Interest on borrowings............................... 249 552 1,759 211 1,391
Total interest expense............................ 24,009 24,607 32,509 6,600 10,475
Net interest income.................................. 20,750 30,359 45,464 8,604 12,671
Provision for loan losses.............................. 2,319 1,106 1,196 38 3,100
Net interest income after provision for loan losses.. 18,431 29,253 44,268 8,566 9,571
Noninterest income
Services charges on deposit accounts................. 1,791 2,916 4,108 900 1,295
Mortgage banking income.............................. 1,274 1,788 1,638 501 252
Gain on sale of purchased mortgage servicing
rights............................................ -- -- -- -- 2,026
Gain on sale of securities........................... 634 710 75 73 97
Sundry............................................... 418 1,350 2,404 623 1,465
Total noninterest income.......................... 4,117 6,764 8,225 2,097 5,135
Noninterest expense
Salaries, wages and benefits......................... 8,466 13,140 19,397 4,246 5,358
Occupancy and furniture and equipment................ 3,032 4,234 6,306 1,357 1,830
Sundry............................................... 7,400 10,920 16,127 2,943 3,811
Credit card restructuring charges.................... -- -- 12,214 -- --
Total noninterest expense......................... 18,898 28,294 54,044 8,546 10,999
Income before income taxes........................... 3,650 7,723 (1,551) 2,117 3,707
Income taxes........................................... 1,184 2,305 190 540 1,270
Net income........................................... 2,466 5,418 (1,741) 1,577 2,437
Dividends on preferred stock........................... 625 1,930 2,433 310 727
Net income applicable to common shareholders......... $ 1,841 $ 3,488 $ (4,174) $ 1,267 $ 1,710
Net income per common share:
Primary.............................................. $ 0.43 $ 0.80 $ (0.75) $ 0.23 $ 0.30
Fully diluted........................................ 0.43 0.79 (0.75) 0.23 0.28
Average shares outstanding:
Primary.............................................. 4,295,043 4,339,760 5,540,814 5,536,526 5,641,550
Fully diluted........................................ 5,358,191 6,848,706 7,994,354 6,832,169 8,574,606
</TABLE>

<PAGE>
BUSINESS
GENERAL
The Company is a bank holding company headquartered in Greenville, South
Carolina which operates through two subsidiaries: Carolina First Bank and CF
Mortgage. The Company was formed in 1986 principally in response to perceived
opportunities resulting from the takeovers of several South Carolina-based banks
by large southeastern regional bank holding companies. A significant number of
the Company's executive officers and management personnel were previously
employed by certain of the larger South Carolina-based banks that were acquired
by these southeastern regional institutions. Consequently, these officers and
management personnel have significant customer relationships and commercial
banking experience that have contributed to the Company's loan and deposit
growth. The Company targets individuals and small to medium-sized businesses in
South Carolina that require a full range of quality banking services typically
provided by larger regional banking concerns, but that prefer the personalized
service afforded by a South Carolina-based institution. At March 31, 1995, the
Company had $1.1 billion in assets and operated through 47 locations in South
Carolina.
The Company's objective is to become the leading South Carolina-based
banking institution. It believes that it can accomplish this goal by pursuing a
"super-community bank" strategy, offering the personalized service and local
decision-making authority that characterize community banks, as well as the
sophisticated banking products offered by regional and super-regional
institutions. The Company is currently the fourth largest South Carolina-based
banking institution (and the largest South Carolina-based commercial bank) in
terms of total assets.
Management believes that a substantial number of individuals and small to
medium-sized businesses have become dissatisfied with the banking services that
they have received since their local "community" banks were acquired by large
regional concerns. Consequently, as a super-community bank, Carolina First
Bank's principal strategy is to take advantage of this dissatisfaction and
provide both the level of personal service and sophisticated products that these
customers require.
GROWTH STRATEGY AND ACQUISITIONS
Since its inception in 1986, the Company has pursued a strategy of growth
through internal expansion and through the acquisition of branch locations and
financial institutions in selected market areas.
INTERNAL GROWTH
The Company has emphasized internal growth through the acquisition of
market share from the large southeastern regional bank holding companies. It
attempts to acquire such market share by providing quality banking services and
personal service to business customers and individuals. The Company believes
that certain recent or pending acquisitions of other banks in the Company's
market areas, including the acquisitions of South Carolina National Bank by
Wachovia Corporation, The First Savings Bank, F.S.B. by Southern National
Corporation, Southern National Corporation by BB&T of South Carolina, Lexington
State Bank by BB&T of South Carolina, and National Bank of South Carolina by
Synovus Financial Corporation, present opportunities for internal growth which
are similar to those that existed at the time of the Company's formation in
1986. Since its opening in December 1986, the Company has grown to $1.1 billion
in assets as of March 31, 1995.
ACQUISITION STRATEGY
Management believes that past acquisitions have had a favorable impact on
the Company, enabling it to expand more rapidly than would otherwise have been
possible and attain the assets, market penetration and economies of scale
necessary to become a "super-community" institution. Management also believes
that selective acquisitions in the future could improve the Company's market
share and enhance the Company's ability to compete with other financial
institutions by expanding and improving the Company's branch network and the
range of services it offers. The Company's principal acquisition focus is on
acquiring South Carolina deposits and lending franchises that are located in
market areas characterized by economic growth. In particular, the Company seeks
acquisitions in its current market areas or in market areas with which Company
management is familiar or in which management has business ties.
PENDING ACQUISITIONS
On November 13, 1994, the Company, Carolina First Bank and MNB entered into
an agreement which provided that MNB would be merged into Carolina First Bank.
In connection with such transaction, up to 784,242 shares of the Company's
common stock will be issued to the shareholders of MNB. Regulatory approvals
have been received and the Company
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expects to consummate such acquisition in the second quarter of 1995. At March
31, 1995, MNB had approximately $42 million in assets, $37 million in deposits
and $27 million in loans.
The Company may consider other acquisitions if attractive opportunities
develop. However, other than the acquisition of MNB, the Company currently has
no other understandings, arrangements or agreements with any other party
regarding future acquisitions.
PAST ACQUISITIONS
The Company's past acquisitions include the following:
(Bullet) In August 1990, the Company acquired CF Savings Bank in a merger
transaction which resulted in the acquisition of approximately
$118 million in assets, $102 million in loans and $100 million in
deposits. This transaction was accounted for as a
pooling-of-interests. With this acquisition, the Company became
the largest financial institution in Georgetown County in terms of
total deposits.
(Bullet) In April 1991, Carolina First Bank acquired two Anderson, South
Carolina branches of American Federal Bank, F.S.B., which resulted
in the assumption of approximately $20 million in deposits, on
which a premium of $1.2 million was paid, and the acquisition of
$3.8 million in loans and approximately $800,000 in fixed assets.
(Bullet) In December 1991, CF Savings Bank acquired four Myrtle Beach,
South Carolina branches of The First Savings Bank, F.S.B., which
resulted in the assumption of approximately $36 million in
deposits, on which a premium of $1.3 million was paid, and the
acquisition of approximately $10 million in loans.
(Bullet) In January 1993, Carolina First Bank acquired the
Republic-Piedmont Branch, which resulted in the assumption of
approximately $15 million in deposits, on which a premium of
$600,000 was paid, and the acquisition of $3 million in loans and
approximately $500,000 in fixed assets. See "Management -- Certain
Transactions."
(Bullet) In March 1993, Carolina First Bank acquired the 12 Republic
Branches, which resulted in the assumption of approximately $190
million in deposits, on which a premium of $6.3 million was paid,
and the acquisition of approximately $28 million in loans and $6
million in fixed assets. See "Management -- Certain Transactions."
(Bullet) In five transactions during the period of time from December 1991
through November 1993, Carolina First Bank purchased an aggregate
of approximately $35 million in credit card receivables and
related accounts from Republic National Bank. These transactions
resulted in a credit card premium of approximately $7.6 million.
(Bullet) In September 1993, the Company acquired CF Mortgage, which
resulted in the acquisition of servicing rights to a portfolio of
approximately $250 million in mortgages and two origination
offices. The cost of the acquisition in excess of the fair value
of net assets acquired aggregated approximately $3.1 million. See
"Management -- Certain Transactions."
(Bullet) In December 1993, Carolina First Bank acquired the Bay Savings
Bank Branches, which resulted in the assumption of approximately
$40 million in deposits, on which a premium of $1.1 million was
paid, and the acquisition of approximately $100,000 in loans and
approximately $87,000 in fixed assets.
(Bullet) In April 1994, Carolina First Bank acquired the sole branch of
Citadel Federal Savings and Loan Association, from the Resolution
Trust Corporation, which resulted in the assumption of
approximately $5.8 million in deposits, on which a premium of
$533,000 was paid.
(Bullet) In May 1994, Carolina First Bank acquired the 6 Republic Branches,
which resulted in the assumption of approximately $135 million in
deposits, on which a premium of $5.4 million was paid, and the
acquisition of approximately $37.5 million in loans and $1.6
million in fixed assets. See "Management -- Certain Transactions."
(Bullet) In April 1995, the Company acquired ACNB in a merger transaction
which resulted in the acquisition of approximately $39 million in
assets, $30 million in loans and $35 million in deposits. This
transaction was accounted for as a pooling of interests.
CAROLINA FIRST BANK
Carolina First Bank is a South Carolina-chartered bank headquartered in
Greenville, South Carolina. It currently operates through 45 branches located
principally in the Upstate, Midlands and Coastal regions of South Carolina. Its
primary focus is on commercial and consumer lending to customers in its market
areas, with mortgage lending being of secondary
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emphasis. It also provides demand transaction accounts to businesses and
individuals. Since the acquisition of CF Mortgage in 1993, all of Carolina First
Bank's mortgage origination activities have been performed by CF Mortgage.
Carolina First Bank provides a full range of commercial and consumer
banking services, including short and medium-term loans, mortgage loans,
revolving credit arrangements, inventory and accounts receivable financing,
equipment financing, real estate lending, safety deposit services, savings
accounts, interest- and noninterest-bearing checking accounts and installment
and other personal loans. Carolina First Bank also provides trust services and
various cash management programs. At March 31, 1995, Carolina First Bank
exceeded all applicable regulatory capital requirements. See "Management's
Discussion and Analysis of Financial Condition and Results of
Operations -- Capital Resources."
A significant number of Carolina First Bank's management and lending
personnel were previously employed by larger South Carolina-based banks.
Consequently, Carolina First Bank's management personnel have significant
customer relationships and commercial banking experience that have contributed
to the loan and deposit growth. In addition, the Board of Directors of the
Company and Carolina First Bank and Carolina First Bank's local advisory boards
include local business and community leaders whose contacts and relationships
have also contributed to Carolina First Bank's growth.
CF MORTGAGE
On September 30, 1993, the Company acquired First Sun Mortgage Corporation
(subsequently renamed CF Mortgage). CF Mortgage is headquartered in Columbia,
South Carolina and is engaged primarily in originating, underwriting and
servicing mortgage loans. In connection with its acquisition of CF Mortgage, the
Company issued 60,000 shares of its Series 1993B Preferred Stock which has a
liquidation value of $20.00 per share. As a result of this acquisition the
Company recorded approximately $3.1 million in goodwill.
CF Mortgage's mortgage loan origination operation is conducted principally
through seven offices, including its headquarters in Columbia and loan
origination offices located in Litchfield Beach, Greenville, Charleston,
Columbia, Anderson and Orangeburg. Mortgage loan applications are forwarded to
CF Mortgage's headquarters in Columbia for processing in accordance with GNMA,
FNMA and other applicable guidelines. With the acquisition of CF Mortgage on
September 30, 1993, substantially all of Carolina First Bank's mortgage loan
origination activity was transferred to CF Mortgage. During 1994, CF Mortgage
and Carolina First Bank originated $108 million of mortgage loans, which
generated $1.0 million in origination fee income. See "Management -- Certain
Transactions" and "Description of Capital Stock -- Series 1993B Preferred
Stock." The Company's present intention is to sell all conforming fixed rate
mortgage loans into the secondary market.
CF Mortgage's mortgage servicing operations consist of servicing mortgage
loans that are owned by Carolina First Bank and subservicing loans, to which the
right to service is owned by Carolina First Bank and other non-affiliated
financial institutions. This servicing operation is conducted at its
headquarters location in Columbia, South Carolina. At March 31, 1995, CF
Mortgage was servicing or subservicing 10,360 loans having an aggregate
principal balance of approximately $800 million. These amounts include 5,237
loans having a principal balance of approximately $435 million which were sold
to an unrelated third party effective March 31, 1995 but which CF Mortgage will
continue to service through June 1995. This sale resulted in a gain for the
Company of approximately $2 million and was effected because the Company
believed that the terms were favorable. CF Mortgage expects to purchase loan
servicing in the future in order to increase its servicing portfolio and replace
the servicing rights sold. As it has done in the past, the Company will
emphasize the purchase of current loan servicing production to reduce prepayment
risks.
The Company views its mortgage banking operation as a means of increasing
noninterest income without increasing assets. The Company purchased the rights
to service the loan portfolios to take advantage of excess capacity thereby
creating a revenue stream to more rapidly cover the fixed costs associated with
its mortgage banking operations. The Company's long-term strategy is to have a
servicing portfolio principally comprised of loans originated by the Company but
which have been sold into the secondary market.
LENDING ACTIVITIES
Carolina First Bank's primary focus has been on commercial and installment
lending to individuals and small- to medium-sized businesses in its market
areas. Such loans totaled approximately $600 million and constituted
approximately 70% of Carolina First Bank's loan portfolio at March 31, 1995.
Since September 1993, mortgage loan origination activities that were
previously performed by Carolina First Bank and CF Savings Bank have been
performed by CF Mortgage. CF Mortgage performs all mortgage origination
activities and all mortgage loans originated and not sold in the secondary
market are placed in Carolina First Bank's loan portfolio.
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For information regarding the composition of the Company's loan portfolio,
see "Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Loan Portfolio."
There are inherent interest rate risks in making loans. For example, if
loans have long maturities and fixed rates of interest, the Company could be
adversely affected by a rise in the general level of interest rates. Except for
conforming residential mortgage loans, the Company generally attempts to
originate variable rate loans or short term fixed rate loans to deal with these
interest rate risks. The Company also mitigates interest rate risk by selling on
the secondary market substantially all of the conforming fixed rate mortgage
loans currently originated by the Company. At March 31, 1995, approximately 60%
of the Company's loan portfolio either had interest rates that adjust with the
prime rate or had maturity dates within 90 days.
The Company's residential mortgage loans typically are structured with
30-year maturities and adjustable interest rates. Commercial and multifamily
mortgage loans are made with a variety of maturity and interest structures,
primarily (i) three-to five-year maturities with 20-year amortization schedules
and adjustable rates of interest, and (ii) one-year maturities with single
principal payments at maturity and predetermined rates of interest.
Approximately $15.6 million in mortgage loans were originated in the first
quarter of 1995.
The Company's consumer loans (excluding credit card loans) generally have
initial maturities of four years or less and carry fixed rates of interest.
The Company's commercial, financial and agricultural loans are typically
structured with maturities of less than five years. At March 31, 1995,
approximately 65% of these loans have adjustable rates that average 91 basis
points above the prime rate. The Company's construction loans typically have
maturities of one year or less and may have fixed or adjustable interest rates.
The interest rates charged on loans vary with the degree of risk, maturity
and amount of the loan, and are further subject to competitive pressures, money
market rates, the availability of funds and government regulations.
The amount of collateral required depends upon the quality of the borrower,
the type of loan, the purpose of the loan and type of collateral being offered.
For commercial mortgage loans, the loan to value ratio generally ranges from 50%
to 80%. For one-to-four family residential mortgage loans, the loan to value
ratio is typically 80%. For commercial and consumer loans not secured by real
estate, the general policy of the Company is to obtain collateral, the value of
which is dependent on the type of loan, the quality of the borrower and the
quality of the collateral. The Company's general policy is to require appraisals
on all real estate given as collateral in connection with loans. Updates on
appraisals are typically not obtained unless there has been a deterioration in
either the loan or the collateral.
CREDIT REVIEW AND PHILOSOPHY
GENERAL. Certain credit risks are inherent in making loans, particularly
commercial, real estate and consumer loans. These include risks with respect to
the period of time over which loans may be repaid, risks resulting from
uncertainties as to the future value of collateral, risks resulting from changes
in economic and industry conditions and risks inherent in dealing with
individual borrowers. In particular, longer maturities increase the risks that
economic conditions will change and adversely affect collectibility.
The Company attempts to minimize loan losses through various means. In
particular, it attempts to rely primarily on the cash flow of a debtor as the
source of repayment and secondarily on the value of the underlying collateral.
The Company also attempts to utilize shorter loan terms in order to reduce the
risk of a decline in the value of such collateral.
The Company addresses repayment risks by adhering to internal credit
policies and procedures. These policies and procedures include a multi-layered
loan approval process, officer and customer lending limits, periodic
documentation examination, and follow-up procedures for any exceptions to credit
policies.
LOAN APPROVAL PROCESS. The point in the Company's loan approval process at
which a loan is approved depends on the size of the borrower's credit
relationship with the Company. Smaller loans may be approved by an individual
loan officer; however, such loans are later reviewed by an internal loan
committee. This internal loan committee must approve loans in advance when the
credit relationship exceeds the lending officer's lending limits. Certain larger
loans are reviewed and approved by the Directors' loan committee or are reviewed
by the Directors' loan committee and approved by the entire Board of Directors.
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ASSESSMENT OF LOANS. A grade is assigned to every commercial loan based on
management's assessment of the credit risk of each loan. These grades range from
1 (the highest grade loan, with little credit risk), to 8 (the lowest grade
loan, considered a loss), and are used to help management assess the adequacy of
the allowance for loan losses. Each grade bears a different weight factor. By
multiplying the grade weight factor times the dollar amount of loans in that
grade, management is given an indication of an appropriate allowance level.
Grades on loans change as circumstances change. Therefore, the required level of
the allowance is subject to change based on management's assessment of the
individual credit risk of the commercial loan portfolio. This review is
performed monthly.
The amounts of the allowance for loan losses associated with consumer and
mortgage loans are based on the Company's historical loss experiences for these
types of loans, coupled with an assessment of local economic conditions. The
assessment of consumer and mortgage loans is performed quarterly. See
"Business -- Growth Strategy and Acquisitions."
The Company has no foreign loans or loans for highly leveraged
transactions.
PLACEMENT ON NONACCRUAL STATUS. For commercial and consumer loans, Carolina
First Bank ceases to recognize interest income on a loan when, in the judgment
of management, the interest is not collectible in the normal course of business.
This generally occurs when a loan is greater than 90 days past due; however,
management may cease to recognize income at an earlier or later point, depending
on the particular circumstances involved. With respect to one-to-four family
residential mortgage loans, Carolina First Bank continues to accrue interest on
loans greater than 90 days past due unless a specific analysis of a particular
loan indicates that interest accrual should be discontinued. Carolina First Bank
has historically experienced minimal losses on one-to-four family residential
mortgage loans which become greater than 90 days past due. Because of this
experience and because Carolina First Bank's collection efforts are initiated
promptly after loans become 30 days past due, management believes that its
policy is justified.
MARKET AREAS
The Company operates principally in three general market areas, (1)
Greenville County and the contiguous counties of Spartanburg, Anderson and
Pickens counties, (2) the Columbia metropolitan statistical area ("MSA"), which
includes most of Richland and Lexington counties, and (3) the "Grand Strand"
coastal area, which includes Horry and Georgetown counties.
GREENVILLE COUNTY. The Company's largest market area is Greenville County
and its contiguous counties of Spartanburg, Anderson and Pickens. The Company
has nine locations in this market, and approximately 30% of Company's deposits
are located there. Carolina First Bank is the largest locally-based independent
commercial Bank in Greenville County. The City of Greenville is the economic
center of this Upstate market.
Greenville County had a population of approximately 328,000 in 1992 and is
the most populous county in South Carolina. It also leads the state in average
monthly employment, retail sales, and number of manufacturing units. Greenville
County has the third highest per capita income in the state. Unemployment in
Greenville County has been below national and state averages over the past
several years and averaged 4.1% in 1994. Greenville County is in the
Greenville/Spartanburg MSA, which is the largest MSA in South Carolina with a
population of approximately 659,000 in 1992.
Greenville County, and the Upstate market in general, is located in what is
known as the I-85 Business Corridor, which runs along Interstate 85 from
Atlanta, Georgia to Charlotte, North Carolina. The I-85 Business Corridor has
seen significant economic growth over the past decade and management expects
this growth to continue at above-average levels. The Upstate market is
characterized by a diverse base of industrial and service firms and is
considered to be one of the Southeast's leading areas for engineering and
manufacturing.
Although historically the Upstate market has been known for its
textile-related products, Upstate companies produce, among other products,
turbines, automobile tires, household cleaners, pharmaceutical products and
polyester plastic packaging. Examples of companies headquartered in the Upstate
market include Michelin North America, Hitachi USA, Delta Woodside Industries,
Inc., Multimedia, Inc., Bowater Incorporated, JPS Textile Group and Fluor Daniel
Corporation. In 1992, BMW North America announced that it would invest
approximately $645 million in a manufacturing facility located approximately 15
miles from Greenville. This plant is the only BMW manufacturing facility outside
Germany. This facility has been substantially completed and is currently
producing automobiles. It has and is expected to continue to have a significant
economic impact on the Upstate market. The Upstate's economy is also expected to
benefit from the Olympics Games, which will be held in Atlanta, Georgia in 1996.
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COLUMBIA MSA. The Company entered the Columbia MSA market in 1993 through
the acquisition of five former Republic National Bank branches and currently has
9 locations there. Approximately 25% of the Company's deposits are located in
this market.
The Columbia MSA is comprised of Richland and Lexington counties. In 1992,
Richland and Lexington counties had populations of approximately 294,000 and
178,000, respectively and had the third and fifth highest per capita income in
the state, respectively. Unemployment in Richland and Lexington counties has
been below national and state averages over the past several years and averaged
4.6% and 4.0% in 1994, respectively. The Columbia MSA had a population of
approximately 472,000 in 1992 and is the third largest MSA in South Carolina.
The Columbia market is characterized by a mixture of business and
government-related activity. Columbia is the state capital and the home of the
main campus of the University of South Carolina. Fort Jackson is a major
military installation which is located near Columbia and is designated for
expansion as a result of other base closings. Business activity in the Columbia
market is diverse. Companies in the Columbia market produce, among other things,
nylon, tractors, soft drinks, chemicals, and plastics. The Columbia market is
home to divisions of 27 Fortune 500 companies. Major companies having a
significant presence in Columbia include NCR Corporation, Martin Marietta
Corporation, Knight-Ridder, Inc. and Allied-Signal, Inc.
GRAND STRAND COASTAL AREA. The third principal market area of the Company
is the "Grand Strand" coastal area, which includes Georgetown and Horry counties
and contiguous portions of Williamsburg and Charleston counties. Carolina First
Bank is currently the largest financial institution in Georgetown County in
terms of deposit market share.
In 1992, Horry and Georgetown counties had populations of approximately
152,000 and 49,000, respectively. From 1982 to 1992, Horry County's population
increased 39%, which was the largest increase in South Carolina.
The Grand Strand market is characterized by tourism and resort development
and manufacturing. The beaches and resort areas in this market include Myrtle
Beach, Surfside Beach, Murrells Inlet, Litchfield Beach, Pawleys Island and
Debordieu. Visitors to the Grand Strand spent an estimated $1.7 billion in 1991,
and state authorities project that tourism, as well as the general population,
will continue to increase in the Grand Strand market. The manufacturing activity
of the area is principally based on steel, paper products, and lumber products.
Major companies located in this market area include International Paper Company,
AUX Corporation, Oneida Industries and Georgetown Steel Corporation.
Unemployment in Horry and Georgetown counties was approximately 7.1% and 10.4%,
respectively, in 1994.
Several of the Company's management personnel, Directors and customers in
the Greenville market have personal and business ties to the Grand Strand area.
In particular, the Chief Executive Officer of the Company, Mack I. Whittle, Jr.,
served as Regional Executive for Bankers Trust of South Carolina in Myrtle Beach
from 1978 to 1982. These ties with the Grand Strand led the Company to expand
into this market.
OTHER MARKET AREAS. The Company also operates branches in 13 small cities
with populations of less than 10,000. Deposits in these branch locations
comprise, in the aggregate, 16% of the Company's total deposits.
In April 1994, the Company entered the Charleston market with its
acquisition of Citadel Federal Savings & Loan Association. Although Carolina
First Bank currently has only one branch in Charleston, the Company's plan is to
increase its market presence in that area. The Company is engaged in preliminary
negotiations regarding the establishment of a Charleston main office in the
downtown business district.
In April, 1995, the Company entered the Aiken market with the acquisition
of ACNB. Aiken County has a population of 128,000 and the second highest per
capita income in South Carolina. Carolina First Bank's two branches in Aiken
have approximately 6% of the deposit market share in Aiken.
COMPETITION
Each of the Company's markets is a highly competitive banking market in
which all of the largest banks in the state are represented. The competition
among the various financial institutions is based upon interest rates offered on
deposit accounts, interest rates charged on loans, credit and service charges,
the quality of services rendered, the convenience of banking facilities and, in
the case of loans to large commercial borrowers, relative lending limits. In
addition to banks and savings associations, the Company competes with other
financial institutions including securities firms, insurance companies, credit
unions, leasing companies and finance companies. For information regarding
legislation which may have an impact on competition, see
"Business -- Supervision and Regulation -- Interstate Banking."
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EMPLOYEES
At March 31, 1995, the Company employed a total of 524 full-time equivalent
employees. The Company believes that its relations with its employees are good.
LITIGATION
The Company and its subsidiaries are from time to time parties to various
legal actions arising in the normal course of business. Management believes that
there is no proceeding threatened or pending against the Company or any of its
subsidiaries that, if determined adversely, would have a material adverse effect
on the business or financial position of the Company or any of its subsidiaries.
On October 31, 1994, JW Charles Clearing Corp. filed a lawsuit against
Carolina First Bank in the Court of Common Pleas in Lexington County, South
Carolina. Such action, in general, claims that Carolina First Bank improperly
paid approximately $600,000 in checks to Harold McCarley and/or McCarley and
Associates, Inc. The complaint seeks actual and punitive damages in an amount to
be determined by a jury, plus interest on the damages and other costs. Carolina
First Bank has answered the complaint and is vigorously defending such
complaint. Carolina First Bank believes that there are valid defenses available
to it. In connection with the litigation, Carolina First Bank also expects to
make a claim under insurance policies for any losses it may suffer which, if
determined to cover the loss, could pay for substantially all of the actual
damages, if any, determined to be appropriate by a jury. However, no assurance
can be given at this time regarding whether it will be determined that any
losses suffered in this litigation will be covered by the insurance policy.
Furthermore, the Company is not in a position at this time to assess the likely
outcome of the litigation or any damages for which it may become liable.
MONETARY POLICY
The earnings of bank holding companies are affected by the policies of
regulatory authorities, including the Federal Reserve Board, in connection with
its regulation of the money supply. Various methods employed by the Federal
Reserve Board include open market operations in U.S. Government securities,
changes in the discount rate on member bank borrowings and changes in reserve
requirements against member bank deposits. These methods are used in varying
combinations to influence overall growth and distribution of bank loans,
investments and deposits, and their use may also affect interest rates charged
on loans or paid on deposits. The monetary policies of the Federal Reserve Board
have had a significant effect on the operating results of commercial banks in
the past and are expected to continue to do so in the future.
SUPERVISION AND REGULATION
GENERAL
The Company and its subsidiaries are extensively regulated under federal
and state law. To the extent that the following information describes statutory
or regulatory provisions, it is qualified in its entirety by reference to the
particular statutory and regulatory provisions. Any change in applicable laws
may have a material effect on the business and prospects of the Company. The
operations of the Company may be affected by possible legislative and regulatory
changes and by the monetary policies of the United States.
THE COMPANY. As a bank holding company registered under the Bank Holding
Company Act of 1956, as amended (the "BHCA"), the Company is subject to
regulation and supervision by the Federal Reserve Board. Under the BHCA, the
Company's activities and those of its subsidiaries are limited to banking,
managing or controlling banks, furnishing services to or performing services for
its subsidiaries or engaging in any other activity that the Federal Reserve
Board determines to be so closely related to banking or managing or controlling
banks as to be a proper incident thereto. The BHCA prohibits the Company from
acquiring direct or indirect control of more than 5% of any class of outstanding
voting stock, or substantially all of the assets of any bank, or merging or
consolidating with another bank holding company without prior approval of the
Federal Reserve Board. The BHCA also prohibits the Company from acquiring
control of any bank operating outside the state of South Carolina unless such
action is specifically authorized by the statutes of the state where the bank to
be acquired is located. See " -- Certain Regulatory Matters -- Interstate
Banking."
Additionally, the BHCA prohibits the Company from engaging in or from
acquiring ownership or control of more than 5% of the outstanding voting stock
of any company engaged in a nonbanking business unless such business is
determined by the Federal Reserve Board to be so closely related to banking or
managing or controlling banks as to be properly incident thereto. The BHCA
generally does not place territorial restrictions on the activities of such
nonbanking-related entities.
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Further, the Federal Deposit Insurance Act, as amended ("FDIA"), authorizes
the merger or consolidation of any Bank Insurance Fund ("BIF") member with any
Savings Association Insurance Fund ("SAIF") member, the assumption of any
liability by any BIF member to pay any deposits of any SAIF member or vice
versa, or the transfer of any assets of any BIF member to any SAIF member in
consideration for the assumption of liabilities of such BIF member or vice
versa, provided that certain conditions are met and, in the case of any
acquiring, assuming or resulting depository institution which is a BIF member,
such institution continues to make payment of SAIF assessments on the portion of
liabilities attributable to any acquired, assumed or merged SAIF-insured
institution (or, in the case of any acquiring, assuming or resulting depository
institution which is a SAIF member, such institution continues to make payment
of BIF assessments on the portion of liabilities attributable to any acquired,
assumed or merged BIF-insured institution).
There are a number of obligations and restrictions imposed on bank holding
companies and their depository institution subsidiaries by law and regulatory
policy that are designed to minimize potential loss exposure to the depositors
of such depository institutions and to the FDIC insurance funds in the event the
depository institution becomes in danger of defaulting or in default under its
obligations to repay deposits. For example, under current federal law, to reduce
the likelihood of receivership of an insured depository institution subsidiary,
a bank holding company is required to guarantee the compliance of any insured
depository institution subsidiary that may become "undercapitalized" with the
terms of any capital restoration plan filed by such subsidiary with its
appropriate federal banking agency up to the lesser of (i) an amount equal to 5%
of the institution's total assets at the time the institution became
undercapitalized, or (ii) the amount that is necessary (or would have been
necessary) to bring the institution into compliance with all applicable capital
standards as of the time the institution fails to comply with such capital
restoration plan. Under a policy of the Federal Reserve Board with respect to
bank holding company operations, a bank holding company is required to serve as
a source of financial strength to its subsidiary depository institutions and to
commit resources to support such institutions in circumstances where it might
not do so absent such policy. The Federal Reserve Board also has the authority
under the BHCA to require a bank holding company to terminate any activity or
relinquish control of a nonbank subsidiary (other than a nonbank subsidiary of a
bank) upon the Federal Reserve Board's determination that such activity or
control constitutes a serious risk to the financial soundness or stability of
any subsidiary depository institution of the bank holding company. Further,
federal law grants federal bank regulatory authorities additional discretion to
require a bank holding company to divest itself of any bank or nonbank
subsidiary if the agency determines that divestiture may aid the depository
institution's financial condition.
In addition, the "cross-guarantee" provisions of the FDIA require insured
depository institutions under common control to reimburse the FDIC for any loss
suffered by either the SAIF or the BIF of the FDIC as a result of the default of
a commonly controlled insured depository institution or for any assistance
provided by the FDIC to a commonly controlled insured depository institution in
danger of default. The FDIC may decline to enforce the cross-guarantee
provisions if it determines that a waiver is in the best interest of the SAIF or
the BIF, or both. The FDIC's claim for damages is superior to claims of
stockholders of the insured depository institution or its holding company but is
subordinate to claims of depositors, secured creditors and holders of
subordinated debt (other than affiliates) of the commonly controlled insured
depository institutions.
The Company is subject to the obligations and restrictions described above,
and Carolina First Bank and is subject to the cross-guarantee provisions of the
FDIA. However, management of the Company currently does not expect that any of
these provisions will have any material impact on its operations.
As a bank holding company registered under the South Carolina Bank Holding
Company Act, the Company also is subject to regulation by the South Carolina
State Board of Financial Institutions (the "State Board"). Consequently, the
Company must receive the approval of the State Board prior to engaging in the
acquisitions of banking or nonbanking institutions or assets. The Company must
also file with the State Board periodic reports with respect to its financial
condition and operations, management, and intercompany relationships between the
Company and its subsidiaries.
CAROLINA FIRST BANK. Carolina First Bank is an FDIC-insured, South
Carolina-chartered banking corporation and is subject to various statutory
requirements and rules and regulations promulgated and enforced primarily by the
State Board and the FDIC. These statutes, rules and regulations relate to
insurance of deposits, required reserves, allowable investments, loans, mergers,
consolidations, issuance of securities, payment of dividends, establishment of
branches and other aspects of the business of Carolina First Bank. The FDIC has
broad authority to prohibit Carolina First Bank from engaging in what it
determines to be unsafe or unsound banking practices. In addition, federal law
imposes a number of restrictions on state-chartered, FDIC-insured banks and
their subsidiaries. These restrictions range from prohibitions against engaging
as a principal in certain activities to the requirement of prior notification of
branch closings. Carolina First Bank also is subject to
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various other state and federal laws and regulations, including state usury
laws, laws relating to fiduciaries, consumer credit and equal credit and fair
credit reporting laws. Carolina First Bank is not a member of the Federal
Reserve System.
DIVIDENDS. The holders of Common Stock are entitled to receive dividends
when and if declared by the Board of Directors out of funds legally available
therefor. The holders of the Series 1994 Preferred Stock, Series 1993 Preferred
Stock and Series 1993B Preferred Stock are entitled to receive dividends when,
as and if declared by the Board of Directors in their discretion out of funds
legally available therefor and as set forth in the Company's Articles of
Incorporation. For a description of the dividends to which holders of the Series
1994 Preferred Stock, Series 1993 Preferred Stock and the Series 1993B Preferred
Stock are entitled, see "Description of Capital Stock." The Company is a legal
entity separate and distinct from its subsidiaries and depends for its revenues
on the payment of dividends from its subsidiaries. Current federal law would
prohibit, except under certain circumstances and with prior regulatory approval,
an insured depository institution, such as Carolina First Bank, from paying
dividends or making any other capital distribution if, after making the payment
or distribution, the institution would be considered "undercapitalized," as that
term is defined in applicable regulations. In addition, as a South
Carolina-chartered bank, Carolina First Bank is subject to legal limitations on
the amount of dividends it is permitted to pay. In particular, Carolina First
Bank must receive the approval of the South Carolina Commissioner of Banking
prior to paying dividends to the Company.
CAPITAL ADEQUACY
THE COMPANY. The Federal Reserve Board has adopted risk-based capital
guidelines for bank holding companies. Under these guidelines, the minimum ratio
of total capital to risk-weighted assets (including certain off-balance sheet
activities, such as standby letters of credit) is 8%. At least half of the total
capital is required to be "Tier 1 capital," principally consisting of common
stockholders' equity, noncumulative preferred stock, a limited amount of
cumulative perpetual preferred stock, and minority interests in the equity
accounts of consolidated subsidiaries, less certain goodwill items. The
remainder (Tier 2 capital) may consist of a limited amount of subordinated debt
and intermediate-term preferred stock, certain hybrid capital instruments and
other debt securities, perpetual preferred stock, and a limited amount of the
general loan loss allowance. In addition to the risk-based capital guidelines,
the Federal Reserve Board has adopted a minimum Tier 1 (leverage) capital ratio
under which a bank holding company must maintain a minimum level of Tier 1
capital (as determined under applicable rules) to average total consolidated
assets of at least 3% in the case of bank holding companies which have the
highest regulatory examination ratios and are not contemplating significant
growth or expansion. All other bank holding companies are required to maintain a
ratio of at least 100 to 200 basis points above the stated minimum. At March 31,
1995, the Company was in compliance with both the risk-based capital guidelines
and the minimum leverage capital ratio, with consolidated Tier 1 capital of
7.47% of risk-weighted assets, total capital of 8.38% of risk-weighted assets
and a leverage capital ratio of 5.66%.
CAROLINA FIRST BANK. As a state-chartered, FDIC-insured institution which
is not a member of the Federal Reserve System, Carolina First Bank is subject to
capital requirements imposed by the FDIC. The FDIC requires state-chartered
nonmember banks to comply with risk-based capital standards substantially
similar to those required by the Federal Reserve Board, as described above. The
FDIC also requires state-chartered nonmember banks to maintain a minimum
leverage ratio similar to that adopted by the Federal Reserve Board. Under the
FDIC's leverage capital requirement, state nonmember banks that (a) receive the
highest rating during the examination process and (b) are not anticipating or
experiencing any significant growth are required to maintain a minimum leverage
ratio of 3% of Tier 1 capital to total assets; all other banks (such as Carolina
First Bank) are required to maintain a minimum ratio of 100 to 200 basis points
above the stated minimum, with an absolute minimum leverage ratio of not less
than 4%. At March 31, 1995, Carolina First Bank had Tier 1 capital of 7.37% of
risk-weighted assets, total capital of 8.28% of risk-weighted assets, and a
leverage capital ratio of 5.77%.
At December 31, 1994, Carolina First Bank was not adequately capitalized
with respect to its total risk-based capital ratio. As a result of the capital
deficiency, Carolina First Bank committed to (1) merge CF Savings Bank and
Carolina First Bank; (2) consummate the Securitization; (3) have the Company
contribute capital of $3.5 million to Carolina First Bank; and (4) sell certain
purchased mortgage servicing rights. All of these steps were taken by March 31,
1995 and on such date, Carolina First Bank was adequately capitalized. Carolina
First Bank expects that its total risk-based capital ratio will continue to
increase as a result of monthly operating results and the consummation of the
acquisitions of MNB (which Carolina First Bank expects to consummate in the
second quarter of 1995). See "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Capital Resources."
FEDERAL DEPOSIT INSURANCE CORPORATION IMPROVEMENT ACT OF 1991
FDICIA required each federal banking agency to revise its risk-based
capital standards to ensure that those standards take adequate account of
interest rate risk, concentration of credit risk and the risk of nontraditional
activities, as well as
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reflect the actual performance and expected risk of loss on multifamily
mortgages. The Federal Reserve Board, the FDIC and the OCC have issued a joint
advance notice of proposed rulemaking, and have issued a revised proposal,
soliciting comments on a proposed framework for implementing these revisions.
Under the proposal, an institution's assets, liabilities, and off-balance sheet
positions would be weighted by risk factors that approximate the instruments'
price sensitivity to a 100 basis point change in interest rates. Institutions
with interest rate risk exposure in excess of a threshold level would be
required to hold additional capital proportional to that risk. The notice also
asked for comments on how the risk-based capital guidelines of each agency may
be revised to take account of concentration and credit risk and the risk of
nontraditional activities. The Company cannot assess at this point the impact
the proposal would have on the capital requirements of the Company or Carolina
First Bank.
INSURANCE
As an FDIC-insured institution, Carolina First Bank is subject to insurance
assessments imposed by the FDIC. Under current law, the insurance assessment to
be paid by FDIC-insured institutions shall be as specified in a schedule
required to be issued by the FDIC that specifies, at semiannual intervals,
target reserve ratios designed to increase the FDIC insurance fund's reserve
ratio to 1.25% of estimated insured deposits (or such higher ratio as the FDIC
may determine in accordance with the statute) in 15 years. Further, the FDIC is
authorized to impose one or more special assessments in any amount deemed
necessary to enable repayment of amounts borrowed by the FDIC from the United
States Department of the Treasury (the "Treasury Department")
Effective January 1, 1993, the FDIC implemented a risk-based assessment
schedule, having assessments ranging from 0.23% to 0.31% of an institution's
average assessment base. The actual assessment to be paid by each FDIC-insured
institution is based on the institution's assessment risk classification, which
is determined based on whether the institution is considered "well capitalized,"
"adequately capitalized" or "undercapitalized," as such terms have been defined
in applicable federal regulations adopted to implement the prompt corrective
action provisions of FDICIA (see " -- Certain Regulatory Matters -- Other Safety
and Soundness Regulations"), and whether such institution is considered by its
supervisory agency to be financially sound or to have supervisory concerns. As a
result of the current provisions of federal law, the assessment rates on
deposits could increase over the next 15 years over present levels. Based on the
current financial condition and capital levels of Carolina First Bank, the
Company does not expect that the current FDIC risk-based assessment schedule
will have a material adverse effect on Carolina First Bank's earnings. Carolina
First Bank's risk-based insurance assessment currently is set at 0.26% of its
average assessment base.
In connection with the merger of CF Savings Bank into Carolina First Bank
and Carolina First Bank's assumption of other SAIF-insured deposits in
connection with various acquisitions, approximately 28% of Carolina First Bank's
total deposits are subject to SAIF insurance assessments imposed by the FDIC.
Under current law, the insurance assessment to be paid by SAIF-insured
institutions must be the greater of 0.15% of the institution's average
assessment base (as defined) or such rate as the FDIC, in its sole discretion,
determines to be appropriate to be able to increase (or maintain) the SAIF
reserve ratio to 1.25% of estimated insured deposits (or such higher ratio as
the FDIC may determine in accordance with the statute) within a reasonable
period of time. From January 1, 1994 through December 31, 1997, the assessment
rate must not be less than 0.18% of the institution's average base assessment.
In each case, the assessment rate may be higher if the FDIC, in its sole
discretion, determines a higher rate to be appropriate. In addition, the FDIC
has adopted for SAIF assessments the risked based assessment schedule described
above. Carolina First Bank's risk-based insurance assessment on its SAIF-insured
deposits has been set at 0.23% of its average assessment base.
OTHER SAFETY AND SOUNDNESS REGULATIONS
PROMPT CORRECTIVE ACTION. Current law provides the federal banking agencies
with broad powers to take prompt corrective action to resolve problems of
insured depository institutions. The extent of these powers depends upon whether
the institutions in question are "well capitalized", "adequately capitalized,"
"undercapitalized," "significantly undercapitalized" or "critically
undercapitalized." Under uniform regulations defining such capital levels issued
by each of the federal banking agencies, a bank is considered "well capitalized"
if it has (i) a total risk-based capital ratio of 10% or greater, (ii) a Tier 1
risk-based capital ratio of 6% or greater, (iii) a leverage ratio of 5% or
greater, and (iv) is not subject to any order or written directive to meet and
maintain a specific capital level for any capital measure. An "adequately
capitalized" bank is defined as one that has (i) a total risk-based capital
ratio of 8% or greater, (ii) a Tier 1 risk-based capital ratio of 4% or greater,
and (iii) a leverage ratio of 4% or greater (or 3% or greater in the case of a
bank with a composite CAMEL rating of 1). A bank is considered (A)
"undercapitalized" if it has (i) a total risk-based capital ratio of less than
8%, (ii) a Tier 1 risk-based capital ratio of less than 4%, or (iii) a leverage
ratio of less than 4% (or 3% in the case of a bank with a composite CAMEL rating
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<PAGE>
of 1); (B) "significantly undercapitalized" if the bank has (i) a total
risk-based capital ratio of less than 6%, or (ii) a Tier 1 risk-based capital
ratio of less than 3%, or (iii) a leverage ratio of less than 3%; and (C)
"critically undercapitalized" if the bank has a ratio of tangible equity to
total assets equal to or less than 2%. The Company and Carolina First Bank each
currently meet the definition of adequately capitalized.
COMMUNITY REINVESTMENT ACT
Carolina First Bank is subject to the requirements of the CRA. The CRA
requires that financial institutions have an affirmative and ongoing obligation
to meet the credit needs of their local communities, including low- and
moderate-income neighborhoods, consistent with the safe and sound operation of
those institutions. Each financial institution's efforts in meeting community
credit needs are evaluated as part of the examination process pursuant to twelve
assessment factors. These factors also are considered in evaluating mergers,
acquisitions and applications to open a branch or facility. Carolina First Bank
received an outstanding rating in its most recent evaluation.
As a result of a Presidential initiative, each of the federal banking
agencies has issued a notice of proposed rulemaking that would replace the
current CRA assessment system with a new evaluation system that would rate
institutions based on their actual performance (rather than efforts) in meeting
community credit needs. Under the proposal, each institution would be evaluated
based on the degree to which it is providing loans (the lending test), branches
and other services (the service test) and investments to low- and
moderate-income areas (the investment test). Under the lending test, as
proposed, an institution would be evaluated on the basis of its market share of
reportable loans in low-and moderate-income areas in comparison to other lenders
subject to CRA in its service area, and in comparison with the institution's
market share of reportable loans in other service areas. An institution would be
evaluated under the investment test based on the amount of investments made that
have had a demonstrable impact on low- and moderate-income areas or persons as
compared to its risk-based capital. The service test would evaluate a retail
institution primarily based on the percentage of its branches located in, or
that are readily accessible to, low- and moderate-income areas. Each depository
institution would have to report to its federal supervisory agency and make
available to the public data on the geographic distribution of its loan
applications, denials, originations and purchases. Small institutions could
elect to be evaluated under a streamlined method that would not require them to
report this data. All institutions, however, would receive one of five ratings
based on their performance: Outstanding, High Satisfactory, Low Satisfactory,
Needs to Improve or Substantial Noncompliance. An institution that received a
rating of Substantial Noncompliance would be subject to enforcement action. The
Company currently is studying the proposal and determining whether the
regulation, if adopted, would require changes to Carolina First Bank's CRA
action plans.
TRANSACTIONS BETWEEN THE COMPANY, ITS SUBSIDIARIES AND AFFILIATES
The Company's subsidiaries are subject to certain restrictions on
extensions of credit to executive officers, directors, principal stockholders or
any related interest of such persons. Extensions of credit (i) must be made on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with unaffiliated persons;
and (ii) must not involve more than the normal risk of repayment or present
other unfavorable features. Aggregate limitations on extensions of credit also
may apply. The Company's subsidiaries also are subject to certain lending limits
and restrictions on overdrafts to such persons.
Subsidiary banks of a bank holding company are subject to certain
restrictions imposed by the Federal Reserve Act on extensions of credit to the
bank holding company or its nonbank subsidiary, on investments in their
securities and on the use of their securities as collateral for loans to any
borrower. Such restrictions may limit the Company's ability to obtain funds from
its bank subsidiary for its cash needs, including funds for acquisitions,
interest and operating expenses.
In addition, under the BHCA and certain regulations of the Federal Reserve
Board, a bank holding company and its subsidiaries are prohibited from engaging
in certain tie-in arrangements in connection with any extension of credit, lease
or sale of property or furnishing of services. For example, a subsidiary may not
generally require a customer to obtain other services from any other subsidiary
or the Company, and may not require the customer to promise not to obtain other
services from a competitor, as a condition to an extension of credit to the
customer.
INTERSTATE BANKING
In 1986, South Carolina adopted legislation which permitted banks and bank
holding companies in certain southern states to acquire banks in South Carolina
to the extent that such other states had reciprocal legislation which was
applicable to South Carolina banks and bank holding companies. The legislation
resulted in a number of South Carolina banks being acquired by large
out-of-state bank holding companies. Size gives the larger banks certain
advantages in competing for business from large corporations. These advantages
include higher lending limits and the ability to offer services in other
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areas of South Carolina and the region. As a result, the Company does not
generally attempt to compete for the banking relationships of large
corporations, but concentrates its efforts on small to medium-sized businesses
and on individuals.
In July 1994, South Carolina enacted legislation which effectively provides
that, after June 30, 1996, out-of-state bank holding companies (including bank
holding companies in the Southern Region, as defined under the statute) may
acquire other banks or bank holding companies having offices in South Carolina
upon the approval of the State Board and assuming compliance with certain other
conditions, including that the effect of the transaction not lessen competition
and that the laws of the state in which the out-of-state bank holding company
filing the applications has its principal place of business permit South
Carolina bank holding companies to acquire banks and bank holding companies in
that state. Although such legislation may increase takeover activity in South
Carolina, the Company does not believe that such legislation will have a
material impact on its competitive position.
Congress recently enacted the Riegle-Neal Interstate Banking and Branching
Efficiency Act of 1994, which will increase the ability of bank holding
companies and banks to operate across state lines. Under the Riegle-Neal
Interstate Banking and Branching Efficiency Act of 1994, the existing
restrictions on interstate acquisitions of banks by bank holding companies will
be repealed one year following enactment, such that the Company and any other
bank holding company located in South Carolina would be able to acquire a bank
located in any other state, and a bank holding company located outside South
Carolina could acquire any South Carolina-based bank, in either case subject to
certain deposit percentage and other restrictions. The legislation also provides
that, unless an individual state elects beforehand either (i) to accelerate the
effective date or (ii) to prohibit out-of-state banks from operating interstate
branches within its territory, on or after June 1, 1997, adequately capitalized
and managed bank holding companies will be able to consolidate their multistate
bank operations into a single bank subsidiary and to branch interstate through
acquisitions. De novo branching by an out-of-state bank would be permitted only
if it is expressly permitted by the laws of the host state. The authority of a
bank to establish and operate branches within a state will continue to be
subject to applicable state branching laws. The Company believes that this
legislation may result in increased takeover activity of South Carolina
financial institutions by out-of-state financial institutions. However, the
Company does not presently anticipate that such legislation will have a material
impact on its operations or future plans.
CHANGE IN BANK CONTROL
The BHCA and the Change in Bank Control Act, together with regulations
promulgated by the Federal Reserve Board, require that, depending on the
particular circumstances, either Federal Reserve Board approval must be obtained
or notice must be furnished to the Federal Reserve Board and not disapproved
prior to any person or company acquiring control of a bank holding company, such
as the Company, subject to certain exemptions for certain transactions. Control
is conclusively presumed to exist if an individual or company acquires 25% or
more of any class of voting securities of the bank holding company. Control is
rebuttably presumed to exist if a person acquires 10% or more but less than 25%
of any class of voting securities and either the company has registered
securities under Section 12 of the Exchange Act (which the Company has done with
respect to the Common Stock) or no other person will own a greater percentage of
that class of voting securities immediately after the transaction. The
regulations provide a procedure for challenge of the rebuttable control
presumption.
OTHER REGULATIONS
Interest and certain other charges collected or contracted for by Carolina
First Bank are subject to state usury laws and certain federal laws concerning
interest rates. The Company's loan operations are also subject to certain
federal laws applicable to credit transactions, such as the federal
Truth-In-Lending Act governing disclosures of certain terms to consumer
borrowers, including investing their assets in loans to low- and moderate-income
borrowers, the Home Mortgage Disclosure Act of 1975 requiring financial
institutions to provide information to enable the public and public officials to
determine whether a financial institution is fulfilling its obligations to help
meet the housing needs of the community it serves, the Equal Credit Opportunity
Act prohibiting discrimination on the basis of race, creed or other prohibited
factors in extending credit, the Fair Credit Reporting Act of 1978 governing the
use and provision of information to credit reporting agencies, the Fair Debt
Collection Act governing the manner in which consumer debts may be collected by
collection agencies, and the rules and regulations of the various federal
agencies charged with the responsibility of implementing such federal laws. The
deposit operations of the Company also are subject to the Right to Financial
Privacy Act, which imposes a duty to maintain confidentiality of consumer
financial records and prescribes procedures for complying with administrative
subpoenas of financial records, and the Electronic Funds Transfer Act and
Regulations E issues by the Federal Reserve Board to implement that act, which
govern automatic deposits to and withdrawals from deposit accounts and
customers' rights and liabilities arising from the use of automated teller
machines and other electronic banking services.
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MANAGEMENT
SENIOR OFFICERS
The following persons serve as executive and senior officers of the Company
or its subsidiaries.
<TABLE>
<CAPTION>
COMPANY
OFFICER
NAME AGE OFFICES CURRENTLY HELD SINCE
<S> <C> <C> <C>
Mack I. Whittle, Jr.................. 46 President and Chief Executive Officer of the Company 1986
and Chairman of Carolina First Bank
William S. Hummers III............... 49 Executive Vice President, Chief Financial Officer and 1988
Secretary/Treasurer of the Company and Carolina
First Bank
James W. Terry, Jr................... 46 President of Carolina First Bank 1991
David L. Morrow...................... 43 Executive Vice President of Carolina First Bank 1992
Joseph C. Reynolds................... 49 President of CF Mortgage 1993
Charles D. Chamberlain............... 46 Executive Vice President and Senior Commercial 1989
Lending Officer of Carolina First Bank
H. Bryce Solomon..................... 41 Senior Vice President and Senior Consumer Lending 1989
Officer of Carolina First Bank
Andrew M. Crane...................... 48 Executive Vice President, Investment Management and 1994
Trust of Carolina First Bank
</TABLE>

Officers are appointed annually and serve at the pleasure of the Board of
Directors.
BUSINESS EXPERIENCE OF OFFICERS
Mack I. Whittle, Jr. is President and CEO of the Company and Chairman of
Carolina First Bank. Mr. Whittle has held these positions since the formation of
the Company in 1986. From 1986 until 1991, Mr. Whittle also served as President
of Carolina First Bank. Mr. Whittle served as Senior Vice President and Regional
Officer for Bankers Trust of South Carolina (currently NationsBank of South
Carolina, N.A.) from 1982 until May 1986 when he resigned his position in order
to organize and form the Company. As a Regional Officer, Mr. Whittle was
responsible for all operations of Bankers Trust of South Carolina in the Upstate
region of South Carolina.
William S. Hummers III is the Executive Vice President and Chief Financial
Officer of the Company and Carolina First Bank. He joined both the Company and
Carolina First Bank in those capacities in 1988. From 1982 to 1986, Mr. Hummers
was Senior Vice President and Controller with Southern Bank and Trust,
Greenville, South Carolina, which was acquired by First Union National Bank of
South Carolina in 1986. From 1986 to 1988, Mr. Hummers was Vice
President -- Management Reporting with First Union Corporation in Charlotte,
North Carolina. As Vice President -- Management Reporting, Mr. Hummers was
responsible for the preparation and presentation of financial information to
senior management and the board of directors.
James W. Terry, Jr. has served as the President of Carolina First Bank
since 1991. From 1986 to 1991, Mr. Terry was Senior Vice President and Regional
Executive for First Union National Bank of South Carolina in Greenville, South
Carolina. As Regional Executive, Mr. Terry was responsible for all operations of
First Union National Bank of South Carolina in the Upstate region of South
Carolina. In addition, Mr. Terry was responsible for all commercial real estate
lending throughout the state.
David L. Morrow has served as Executive Vice President of Carolina First
Bank since its merger with CF Savings Bank. From 1992 until such merger, he
served as President of CF Savings Bank. From 1988 to 1992, Mr. Morrow was Vice
President/City Executive for First Union National Bank of South Carolina in
Hilton Head, South Carolina. As City Executive, Mr. Morrow was responsible for
commercial lending and branch operations in Hilton Head.
Joseph C. Reynolds has served as the President of CF Mortgage since 1993.
From 1984 until 1993, Mr. Reynolds was Senior Vice President and Chief Mortgage
Banking Officer at South Carolina Federal Savings Bank, F.S.B. in Columbia,
South Carolina. As Chief Mortgage Banking Officer, Mr. Reynolds was in charge of
a mortgage banking operation which had a loan servicing portfolio of over $1
billion.
Charles D. Chamberlain has served as Executive Vice President and Senior
Lending Officer of Carolina First Bank since 1993. Mr. Chamberlain joined
Carolina First Bank in 1989 as Senior Commercial Lending Officer in Greenville
for Carolina
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First Bank and served in such capacity until 1993. Prior to 1988, Mr.
Chamberlain served as manager of a loan production office in Greenville, South
Carolina for First American National Bank, Nashville, Tennessee.
H. Bryce Solomon, Jr. has served as Senior Vice President of Carolina First
Bank in charge of consumer lending since 1989. From 1986 until 1989, Mr. Solomon
served as Vice President-Manager of Sales Finance for South Carolina for First
Union National Bank of South Carolina. Mr. Solomon served as Vice President and
Consumer Loan Manager of Southern Bank from 1984 until 1986, when it was
acquired by First Union National Bank of South Carolina. From 1980 to 1984, Mr.
Solomon was a Regional Sales Finance Manager for Bankers Trust of South
Carolina.
Andrew M. Crane has served as Executive Vice President of Carolina First
Bank in charge of Investment Management and Trust Services since 1994. From 1991
to 1994, Mr. Crane was Executive Vice President for NationsBank in Nashville,
Tennessee responsible for private banking in Tennessee and Kentucky. From 1987
to 1991, Mr. Crane was Executive Vice President and Group CEO for C&S National
Bank of South Carolina (currently NationsBank of South Carolina, N.A.)
responsible for commercial and retail banking in a six-county area of South
Carolina.
DIRECTORS
The following table sets forth the current directors of the Company.
<TABLE>
<CAPTION>
NAME AGE DIRECTORSHIPS WITH COMPANY AND ITS SUBSIDIARIES
<S> <C> <C>
William R. Timmons, Jr................................ 70 Chairman of the Company's Board of Directors and
Director of Carolina First Bank
Mack I. Whittle, Jr................................... 46 Director of the Company and Carolina First Bank
William S. Hummers III................................ 49 Director of the Company and Carolina First Bank
Judd B. Farr.......................................... 67 Director of the Company and Carolina First Bank
C. Claymon Grimes, Jr................................. 71 Director of the Company and Carolina First Bank
M. Dexter Hagy........................................ 49 Director of the Company and Carolina First Bank
Robert E. Hamby, Jr................................... 47 Director of the Company and Carolina First Bank
R. Glenn Hilliard..................................... 51 Director of the Company
Richard E. Ingram..................................... 52 Director of the Company and Carolina First Bank
Charles B. Schooler................................... 65 Director of the Company and Carolina First Bank
Elizabeth P. Stall.................................... 62 Director of the Company and Carolina First Bank
William M. Webster III................................ 60 Director of the Company and Carolina First Bank
</TABLE>

Mack I. Whittle, Jr. is President and CEO of the Company and Chairman of
Carolina First Bank. Mr. Whittle has held these positions since the formation of
the Company in 1986. From 1986 until 1991, Mr. Whittle also served as President
of Carolina First Bank. Mr. Whittle served as Senior Vice President and Regional
Officer for Bankers Trust of South Carolina (currently NationsBank of South
Carolina, N.A.) from 1982 until May 1986 when he resigned his position in order
to organize and form the Company.
William R. Timmons, Jr. is currently Chairman of the Board of the Company.
He has been a Director since its formation in 1986. Mr. Timmons is First Vice
President and Secretary of Canal Insurance Company, an insurer of commercial
motor vehicles. He has held this position since 1947.
William S. Hummers III is Executive Vice President and Chief Financial
Officer of the Company and Carolina First Bank. He joined the Company and
Carolina First Bank in those capacities in 1988. From 1982 to 1986, Mr. Hummers
was Senior Vice President and Controller with Southern Bank and Trust,
Greenville, South Carolina, which was acquired by First Union National Bank of
South Carolina in 1986. From 1986 to 1988, Mr. Hummers was Vice
President-Management Reporting with First Union Corporation in Charlotte, North
Carolina. Mr. Hummers became a Director of the Company in 1990.
Mr. Farr is the owner and President of Greenco Beverage, Inc., a
distributorship headquartered in Greenville, South Carolina. Mr. Farr has served
as President since the opening of Greenco Beverage, Inc. in 1965.
C. Claymon Grimes, Jr. is an attorney in private practice in Georgetown,
South Carolina. He served as Director of CF Savings Bank from 1965 until its
merger with Carolina First Bank and came on the Board of the Company in 1990
after the acquisition of CF Savings Bank by the Company.
Robert E. Hamby, Jr. is Senior Vice President-Finance and Administration
and Chief Financial Officer of Multimedia, Inc., a diversified media company
headquartered in Greenville, South Carolina that owns and operates newspapers,
television
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and radio stations, cable television systems and media productions. Mr. Hamby
became Multimedia, Inc.'s Chief Financial Officer in 1987 and Senior Vice
President in 1993. Prior to 1985, when Mr. Hamby first became affiliated with
Multimedia, Inc., Mr. Hamby was a partner in the accounting firm of KPMG Peat
Marwick. Mr. Hamby became a Company Director in December 1993.
M. Dexter Hagy is President of Vaxa Corporation, an investment holding
company located in Greenville, South Carolina. From 1984 until 1987, Mr. Hagy
served as a senior executive officer of James River Corporation with
responsibility for its nonwoven fiber business. In 1987, Mr. Hagy resigned this
position to form Vaxa Corporation. From 1991 through 1993, Mr. Hagy (through
Vaxa Corporation) owned and operated Siteguard Security Holding Company, a
security alarm business which was sold in 1993. Mr. Hagy became a Company
Director in December 1993.
R. Glenn Hilliard has been a Director of the Company since its formation in
1986. Since 1989, he has served as President and CEO of ING Life Companies in
U.S. Prior to 1989, he was Chairman and CEO of Liberty Life Insurance Company in
Greenville, South Carolina.
Richard E. Ingram has been a Director of the Company since its formation in
1986. Mr. Ingram is currently Chairman of Builder Marts of America, Inc., a
company engaged in the wholesale distribution of building materials. From 1988
until 1993, Mr. Ingram served as Chairman and Chief Executive Officer of Builder
Marts of America, Inc. Mr. Ingram is also Chief Executive Officer of Snyder's
Auto Sales, Inc., a company which operates a car dealership in Greenville, South
Carolina. He has held such position since 1993. Mr. Ingram is also a director of
Synalloy Corporation.
Charles B. Schooler is a Doctor of Optometry in Georgetown, South Carolina.
He served as Director of CF Savings Bank from 1965 until its merger with
Carolina First Bank and became a Director of the Company in 1990 upon the
acquisition of CF Savings Bank by the Company.
Elizabeth P. Stall has been a Director of the Company since its formation
in 1986. She is a private investor in Greenville, South Carolina. Ms. Stall is
also a director of Multimedia, Inc. of Greenville, South Carolina. Multimedia,
Inc. is a diversified media company headquartered in Greenville, South Carolina
which owns and operates newspapers, television and radio stations, cable
television systems, security systems and media productions.
William M. Webster III has been a Director of the Company since its
formation in 1986. He is currently a partner in Carabo Capital, a company which
invests in commercial property.
DESCRIPTION OF NOTES
The Notes will be limited to $26,450,000 aggregate principal amount and
will mature on September 1, 2005. Interest on the Notes will be payable at the
rate per annum shown on the cover page of this Prospectus from the date of
delivery of the Notes, or from the most recent Interest Payment Date to which
interest has been paid or provided for, quarterly on the first day of March,
June, September and December in each year, commencing on September 1, 1995, to
the persons in whose names the Notes are registered at the close of business on
the 15th day of February, May, August and November, as the case may be,
immediately preceding such Interest Payment Date. The Notes are redeemable, in
whole or in part, at the option of the Company, at any time on or after
September 1, 2000, at 100% of the principal amount, plus accrued interest.
GENERAL
The following sets forth certain general terms and provisions of the Notes
offered hereby. The Notes are to be issued under an Indenture dated as of April
1, 1995 (the "Indenture"), between the Company and First American National Bank,
as trustee (the "Trustee"). A copy of the Indenture is an exhibit to the
Registration Statement of which this Prospectus is a part. The following
summaries of certain provisions of the Notes and the Indenture do not purport to
be complete and are subject to, and are qualified in their entirety by reference
to, all the provisions of the Indenture, including the definitions therein of
certain terms. Wherever particular Sections, Articles or defined terms of the
Indenture are referred to, it is intended that such Sections, Articles or
defined terms shall be incorporated herein by reference. Article and Section
references used herein are references to the Indenture. Capitalized terms not
otherwise defined in this Prospectus shall have the meanings given to them in
the Indenture. As used herein, the term "Securities" includes all securities
which may be issued pursuant to the Indenture, and includes the Notes.
The Notes will be unsecured and will be subordinated and junior to all
Senior Indebtedness (as defined below under "Subordination of Notes") and, in
certain circumstances relating to the dissolution, winding-up, liquidation or
reorganization of the Company, to all Additional Senior Obligations (as defined
below under "Subordination of Notes"). The Indenture does
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not contain covenants prohibiting the Company from disposing of voting stock of
its subsidiaries, including the stock of any of its banking subsidiaries. Events
of default as to which payment of the principal of the Notes may be accelerated
are limited to events relating to the bankruptcy of the Company. See
"Subordination of Notes" and "Events of Default; Limited Rights of
Acceleration."
The Indenture does not limit the amount of securities that may be issued
thereunder and provides that securities may be issued thereunder from time to
time in one or more series. (Section 301) As noted above, the Notes will be
unsecured, subordinated obligations of the Company. Neither the Indenture nor
the Notes will limit or otherwise restrict the amount of other indebtedness
which may be incurred or the other securities which may be issued by the Company
or any of its subsidiaries. In addition, the Indenture and the Notes will not
contain any provision that would provide protection to the Holders of the Notes
against a sudden and dramatic decline in credit quality resulting from a
takeover, recapitalization or similar restructuring of the Company or other
event involving the Company that may adversely affect the credit quality of the
Company.
Because the Company is a holding company, its rights and the rights of its
creditors, including the holders of the Notes, to participate in the assets of
any subsidiary upon the liquidation or reorganization of such a subsidiary will
be subject to the prior claims of such subsidiaries' creditors (including, in
the case of a subsidiary bank, its depositors) except to the extent that the
Company may itself be a creditor with recognized claims against the subsidiary.
Claims on subsidiaries of the Company by creditors other than the Company
include claims with respect to long-term debt and substantial obligations with
respect to deposit liabilities, federal funds purchased, securities sold under
repurchase agreements and other short-term borrowings.
Principal of and interest on the Notes will be payable at the office or
agency of Carolina First Bank as Paying Agent maintained for such purpose in
Greenville, South Carolina and at any other office or agency maintained by the
Company for such purpose, except that, at the option of the Company, interest
may be paid by mailing a check to the address of the person entitled thereto as
it appears on the Security Register. The transfer of Notes (other than
Book-Entry Securities) will be registrable at the corporate trust office of
Carolina First Bank as Registrar in Greenville, South Carolina. (Sections 301,
305 and 1002) Interest on the Notes will be payable to the person in whose name
the Notes are registered at the close of business on the Regular Record Date
(the 15th day of February, May, August and November) designated for an Interest
Payment Date. (Section 307) The Notes will be issued only in fully registered
form without coupons and in denominations of $1,000 or integral multiples
thereof. (Section 302) No service charge will be required for any registration
of transfer or exchange of the Notes, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge imposed in
connection therewith other than certain exchanges not involving any transfer.
(Section 305)
BOOK-ENTRY SECURITIES
The Notes will be issued in the form of one or more book-entry securities
(the "Book-Entry Securities") deposited with The Depository Trust Company
("DTC") and registered in the name of a nominee of DTC (Section 301). The term
"Depositary" refers to DTC or any successor depositary. In such a case, one or
more Book-Entry Securities will be issued in a denomination or aggregate
denominations equal to the portion of the aggregate principal amount of Notes
represented by such Book-Entry Securities. Except as set forth below, the Notes
will be available for purchase in denominations of $1,000 and integral multiples
thereof in book-entry form only. Unless and until it is exchanged in whole or in
part for Notes in definitive registered form, a Book-Entry Security may not be
transferred except as a whole by the Depositary for such Book-Entry Security to
a nominee of such Depositary or by a nominee of the Depositary to the Depositary
or another nominee of the Depositary or by the Depositary or any such nominee to
a successor of the Depositary or a nominee of such successor. (Section 305).
DTC has advised the Company that it is a limited-purpose trust company
organized under the laws of the State of New York, a member of the Federal
Reserve System, a "clearing corporation" within the meaning of the New York
Uniform Commercial Code and a "clearing agency" registered pursuant to the
provisions of Section 17A of the Securities Exchange Act of 1934. DTC was
created to hold securities of persons who have accounts with DTC
("participants") and to facilitate the clearance and settlement of securities
transactions among its participants in such securities through electronic
book-entry changes in accounts of the participants, thereby eliminating the need
for physical movement of securities certificates. DTC's participants include
securities brokers and dealers (including the Underwriters), banks, trust
companies, clearing corporations and certain other organizations, some of which
(and/or their representatives) own DTC. Access to DTC's book-entry system is
also available to others, such as banks, brokers, dealers and trust companies
that clear through or maintain a custodial relationship with a participant,
either directly or indirectly.
Upon the issuance of a Book-Entry Security, the Depositary for such
Book-Entry Security or its nominee will credit, on its book-entry registration
and transfer system, the respective principal amounts of the Notes represented
by such Book-Entry
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Security to the accounts of persons that have accounts with such Depositary
("participants"). Such accounts shall be designated by the Underwriters or
agents with respect to such Notes or by the Company if such Notes are offered
and sold directly by the Company. Participants include securities brokers and
dealers, banks and trust companies, clearing corporations and certain other
organizations. Access to the Depositary's system is also available to others,
such as banks, brokers, dealers and trust companies that clear through or
maintain a custodial relationship with a participant, either directly or
indirectly ("indirect participants"). Persons who are not participants may
beneficially own Book-Entry Securities held by the Depositary only through
participants or indirect participants.
Ownership of beneficial interests in any Book-Entry Security will be shown
on, and the transfer of that ownership will be effected only through, records
maintained by the Depositary or its nominee (with respect to interests of
participants) for such Book-Entry Security and on the records of participants
(with respect to interests of indirect participants). The laws of some states
require that certain purchasers of securities take physical delivery of such
securities in definitive form. Such laws, as well as the limits on participation
in the Depositary's book-entry system, may impair the ability to transfer
beneficial interests in a Book-Entry Security.
So long as the Depositary or its nominee is the registered owner of a
Book-Entry Security, such Depositary or such nominee will be considered the sole
owner or holder of the Notes represented by such Book-Entry Security for all
purposes under the Indenture. Except as provided below, owners of beneficial
interests in Notes represented by Book-Entry Securities will not be entitled to
have Notes represented by such Book-Entry Security registered in their names,
will not receive or be entitled to receive physical delivery of such Notes in
definitive form, and will not be considered the owners or holders thereof under
the Indenture.
Payments of principal of and interest on Notes registered in the name of
the Depositary or its nominee will be made to the Depositary or its nominee, as
the case may be, as the registered owner of the Book-Entry Security representing
such Notes. The Company expects that the Depositary or its nominee, upon receipt
of any payment of principal or interest, will credit immediately participants'
accounts with payments in amounts proportionate to their respective beneficial
interests in the principal amount of the Book-Entry Security for such Notes, as
shown on the records of such Depositary or its nominee. The Company also expects
that payments by participants and indirect participants to owners of beneficial
interests in such Book-Entry Security held through such persons will be governed
by standing instructions and customary practices, as is now the case with
securities registered in "street name," and will be the responsibility of such
participants and indirect participants. Neither the Company, the Trustee, any
Authenticating Agent, any Paying Agent nor the Security Registrar for the Notes
will have any responsibility or liability for any aspect of the records relating
to, or payments made on account of, beneficial ownership interests in the
Book-Entry Security for the Notes or for maintaining, supervising or reviewing
any records relating to such beneficial ownership interests. (Section 311)
If the Depositary for the Notes notifies the Company that it is unwilling
or unable to continue as Depositary or if at any time the Depositary ceases to
be a clearing agency registered under the Exchange Act, the Company has agreed
to appoint a successor depositary. If such a successor is not appointed by the
Company with 90 days, the Company will issue the Notes in definitive registered
form in exchange for the Book-Entry Security representing such Notes. In
addition, the Company may at any time and in its sole discretion determine that
the Notes issued in the form of one or more Book-Entry Securities shall no
longer be represented by such Book-Entry Security or Securities and, in such
event, will issue the Notes in definitive registered form in exchange for such
Book-Entry Security or Securities representing such Notes. Further, if the
Company so specifies with respect to the Notes, or if an Event of Default, or an
event which with notice, lapse of time or both would be an Event of Default with
respect to the Notes has occurred and is continuing, an owner of a beneficial
interest in a Book-Entry Security representing Notes may receive Notes in
definitive registered form. In any such instance, an owner of a beneficial
interest in a Book-Entry Security will be entitled to physical delivery in
definitive registered form of Notes represented by such Book-Entry Security
equal in principal amount to such beneficial interest and to have such Notes
registered in its name. (Section 305) Notes so issued in definitive form will be
issued in denominations of $1,000 and integral multiples thereof and will be
issued in registered form only, without coupons.
SUBORDINATION OF NOTES
The Notes will be direct, unsecured obligations of the Company and will be
subordinate to all Senior Indebtedness of the Company and, under certain
circumstances relating to the dissolution, winding-up, liquidation or
reorganization of the Company, to all Additional Senior Obligations of the
Company, as described below (Article Thirteen). The Indenture does not limit or
prohibit the incurrence of Senior Indebtedness or Additional Senior Obligations.
As of March 31, 1995, the Company had outstanding approximately $1.2 million of
Senior Indebtedness and no Additional Senior Obligations.
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"Senior Indebtedness" is defined in the Indenture to mean (a) all
indebtedness of the Company, including indebtedness to general creditors,
whether now outstanding or subsequently created, assumed or incurred, other than
(i) the Securities, (ii) any obligation Ranking on a Parity with the Securities,
or (iii) any obligation Ranking Junior to the Securities and (b) any deferrals,
renewals or extensions of any such Senior Indebtedness. The term "indebtedness
of the Company for money borrowed" shall mean any obligation of, or any
obligation guaranteed by, the Company for repayment of money borrowed, whether
or not evidenced by bonds, debentures, notes or other written instruments, and
any deferred obligations for payment of the purchase price of property or assets
acquired other than in the ordinary course of business. "Additional Senior
Obligations" is defined in the Indenture to mean all indebtedness of the
Company, whether now outstanding or subsequently created, assumed or incurred,
for claims in respect of derivative products such as interest and foreign
exchange rate contracts, commodity contracts and similar arrangements; provided,
however, that Additional Senior Obligations do not include (a) any claims in
respect of Senior Indebtedness, or (b) any obligations (i) Ranking Junior to the
Securities, or (ii) Ranking on a Parity with the Securities. For purposes of
this definition, "claims" shall have the meaning assigned thereto in Section
101(4) of the United States Bankruptcy Code of 1978. Section 101 of the
Indenture does not limit or prohibit the incurrence of Senior Indebtedness or
Additional Senior Obligations.
The term "Ranking Junior to the Securities" is defined in the Indenture to
mean any obligation of the Company which (a) ranks junior to and not equally
with or prior to the Securities in right of payment upon the happening of any
insolvency, receivership, conservatorship, reorganization, readjustment of debt,
marshaling of assets and liabilities or similar proceedings or any liquidation
or winding-up of or relating to the Company as a whole, whether voluntary or
involuntary, and (b) is specifically designated as ranking junior to the
Securities by express provisions in the instrument creating or evidencing such
obligation.
The term "Ranking on a Parity with the Securities" is defined in the
Indenture to mean any obligation of the Company which (a) ranks equally with and
not prior to the Securities in right of payment upon the happening of any
insolvency, receivership, conservatorship, reorganization, readjustment of debt,
marshalling of assets and liabilities or similar proceedings or any liquidation
or winding-up of or relating to the Company as a whole, whether voluntary or
involuntary, and (b) is specifically designated as ranking on a parity with the
Securities by express provision in the instrument creating or evidencing such
obligation. (Section 101)
The Securities (including the Notes) will be subordinate in right of
payment to all Senior Indebtedness, as provided in the Indenture. No payment on
account of the principal of and premium, if any, or interest in respect of the
Securities may be made if there shall have occurred and be continuing a default
in payment with respect to Senior Indebtedness or an event of default with
respect to any Senior Indebtedness resulting in the acceleration of the maturity
thereof. Upon any payment or distribution of assets to creditors upon any
insolvency, receivership, conservatorship, reorganization, readjustment of debt,
marshalling of assets and liabilities or similar proceedings or any liquidation
or winding-up of or relating to the Company as a whole, whether voluntary or
involuntary, (a) the holders of all Senior Indebtedness will first be entitled
to receive payment in full before the Holders of the Securities will be entitled
to receive any payment in respect of the principal of and premium, if any, or
interest on the Securities, and (b) if after giving effect to the operation of
clause (a) above, (i) any amount of cash, property or securities remains
available for payment or distribution in respect of the Securities ("Excess
Proceeds"), and (ii) creditors in respect of Additional Senior Obligations have
not received payment in full of amounts due or to become due thereon or payment
of such amounts has not been duly provided for, then such Excess Proceeds shall
first be applied to pay or provide for the payment in full of all such
Additional Senior Obligations before any payment may be made on the Securities.
If the Holders of Securities receive payment and are aware at the time of
receiving payment that all Senior Indebtedness and Additional Senior Obligations
have not been paid in full, then such payment shall be held in trust for the
benefit of the holders of Senior Indebtedness and/or Additional Senior
Obligations, as the case may be. (Section 1301) By reason of such subordination,
in the event of insolvency, Holders of the Securities may recover less, ratably,
than holders of Senior Indebtedness and holders of Additional Senior
Obligations.
EVENTS OF DEFAULT; LIMITED RIGHTS OF ACCELERATION
The Indenture (with respect to the any Security issued thereunder,
including the Notes) defines an "Event of Default" as any one of the following
events (whatever the reason and whether it be occasioned by the subordination
provisions or be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body): (a) failure to pay any
interest on any Security when due and payable, continued for 30 days, whether or
not such payment is prohibited by the subordination provisions of the Indenture;
(b) failure to pay principal of or any premium on any Security when due; (c)
failure to deposit any sinking fund payment, when due, in respect of any
Security, whether or not such payment is prohibited by the subordination
provisions of
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the Indenture; (d) failure to perform any other covenants or warranties of the
Company in the Indenture or in any instrument evidencing indebtedness for
borrowed money in an aggregate principal amount exceeding $1 million of the
Company continued for 30 days after written notice as provided in the Indenture;
(e) the entry of a decree or order for relief in respect of the Company by a
court having jurisdiction in the premises in an involuntary case under Federal
or state bankruptcy laws and the continuance of any such decree or order
unstayed and in effect for a period of 60 consecutive days; (f) the commencement
by the Company of a voluntary case under Federal or state bankruptcy laws or the
consent by the Company to the entry of a decree or order for relief in an
involuntary case under any such law; (g) the consent by the Company to the
appointment of a receiver of the Company or of a Principal Subsidiary Bank; (h)
the admission by the Company or by a Principal Subsidiary Bank of its insolvency
or inability to pay its debts generally as they become due; (i) the acceleration
of any indebtedness for borrowed money in an aggregate principal amount
exceeding $1 million of the Company or of a Principal Subsidiary Bank in certain
circumstances including the giving of notice; and (j) any other Event of Default
provided with respect to a specific series of Securities. (Section 501)
The payment of the principal of the Notes may be accelerated only upon the
occurrence of an Event of Default described in clause (e) or clause (f) of the
preceding paragraph (a "Bankruptcy Event of Default") and there is no right of
acceleration of the payment of principal of the Notes upon a default in the
payment of principal or interest, if any, or in the performance of any covenant
or agreement in the Notes or Indenture or other default. In the event of a
default in the payment of principal or interest, if any, or the performance of
any covenant or agreement in the Notes or Indenture, or other default described
in the preceding paragraph, the Trustee, subject to certain limitations and
conditions, may institute judicial proceedings to enforce payment of such
principal or interest, if any, or to obtain the performance of such covenant or
agreement or any other proper remedy, including, in certain circumstances, the
appointment of a non-voting observer who may attend meetings of the Company's
Board of Directors. (Section 503) Under certain circumstances, the Trustee may
withhold notice to the Holders of the Notes in a default if the Trustee in good
faith determines that the withholding of such notice is in the best interest of
such Holders, and the Trustee shall withhold such notice for certain defaults
for a period of 30 days. (Section 602)
If a Bankruptcy Event of Default with respect to the Notes occurs and is
continuing, either the Trustee or the Holders of at least 25% in aggregate
principal amount of the Notes may declare the principal amount of all the Notes
to be due and payable immediately. At any time after a declaration of
acceleration with respect to the Notes has been made, but before a judgment or
decree based on acceleration has been obtained, the Holders of a majority in
aggregate principal amount of the Notes may, under certain circumstances,
rescind and annul such acceleration. (Section 502)
The Indenture provides that, subject to the duty of the Trustee during
default to act with the required standard of care, the Trustee will be under no
obligation to exercise any of its rights or powers under the Indenture at the
request or direction of any of the Holders, unless such Holders shall have
offered to the Trustee reasonable security or indemnity. (Section 603) Subject
to such provisions for the indemnification of the Trustee and to certain other
conditions, the Holders of a majority in aggregate principal amount of the Notes
will have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred on the Trustee, with respect to the Notes. (Section 512)
No Holder of the Notes will have any right to institute any proceeding with
respect to the Indenture, or for the appointment of a receiver or trustee or for
any remedy thereunder, unless such Holder shall have previously given to the
Trustee under the Indenture written notice of a continuing Event of Default and
unless the Holders of at least 25% in aggregate principal amount of the Notes
shall have made written request, and offered reasonable indemnity, to such
Trustee to institute such proceeding as trustee, and such Trustee shall not have
received from the Holders of a majority in aggregate principal amount of the
Notes a direction inconsistent with such request and shall have failed to
institute such proceeding within 60 days. (Section 507) However, such
limitations do not apply to a suit instituted by a Holder of a Note for
enforcement of payment of the principal of and interest on such Note on or after
the respective due dates expressed in the Note. (Section 508)
The Company is required to furnish to the Trustee annually a statement as
to the performance by the Company of certain of its obligations under the
Indenture and as to any default in such performance. (Section 1006)
REDEMPTION IN THE EVENT OF DEATH OF A HOLDER
Unless the Notes have been declared due and payable prior to their maturity
by reason of a Bankruptcy Event of Default, the Company will, at any time upon
the death of any Holder, redeem Notes within sixty days following receipt by the
Trustee of a written request therefor from such Holder's personal
representative, or surviving joint tenant(s), tenant by the entirety or
tenant(s) in common, subject to the limitations that the Company will not be
obligated to redeem, during an initial period beginning with the original
issuance of the Notes and ending May 1, 1996, or during any twelve (12) month
period ending
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May 1 thereafter, (A) the portion of a Note or Notes presented by a Holder
exceeding an aggregate principal amount of $25,000 per Holder or (B) Notes in an
aggregate principal amount exceeding $460,000 (plus, to the extent that the
Underwriters exercise their over-allotment option, 2% of the principal amount of
the Notes purchased upon exercise of the over-allotment option; provided that,
in no event, shall the maximum aggregate principal amount of Notes which the
Company may be obligated to redeem in any such twelve month period exceed
$529,000); further references herein to the $460,000 aggregate principal amount
limitations shall be deemed to include such higher figure, not exceeding
$529,000, to the extent the Underwriters exercise their over-allotment option.
Notes will be redeemed in order of their receipt by the Trustee. Notes may
be presented for redemption by delivering to the Trustee: (A) a written request
for redemption, in form satisfactory to the Trustee, signed by the registered
Holder's duly authorized representative, (B) the Note to be redeemed, free and
clear of any liens or encumbrances of any kind, and (C) appropriate evidence of
death of a Holder and appropriate evidence of authority of his representative to
make such request. The price to be paid by the Company for all Notes or portions
thereof presented to it pursuant to these provisions is 100% of the principal
amount thereof or portion thereof plus accrued but unpaid interest to the date
of payment. Any acquisition of Notes by the Company other than by redemption
upon the death of a Holder shall not be included in the computation of either
the $25,000 or $460,000 limitation for any period.
A Note held in tenancy by the entirety, joint tenancy or tenancy in common
will be deemed to be held by a single Holder and the death of a tenant by the
entirety, joint tenant or tenant in common will be deemed the death of a Holder.
The death of a person, who, during his lifetime, was entitled to substantially
all of the beneficial interests of ownership of a Note will be deemed the death
of the Holder, regardless of the registered Holder, if such beneficial interest
can be established to the satisfaction of the Trustee. For purposes of a
Holder's request for redemption and a request for redemption on behalf of a
deceased holder, such beneficial interest shall be deemed to exist in cases of
street name or nominee ownership, ownership under the Uniform Gifts to Minors
Act, community property or other joint ownership arrangements between a husband
and wife (including individual retirement accounts or Keogh [H.R. 10] plans
maintained solely by or for the Holder or decedent or by or for the Holder or
decedent and his spouse), and trusts and certain other arrangements where a
person has substantially all of the beneficial ownership interests in the Notes
during his lifetime. Beneficial interests shall include the power to sell,
transfer or otherwise dispose of a Note and the right to receive the proceeds
therefrom, as well as interest and principal payable with respect thereto.
In the case of Notes registered as Book-Entry Securities in the name of DTC
or its nominee or Notes registered in the names of banks, trust companies or
broker-dealers who are members of a national securities exchange or the National
Association of Securities Dealers, Inc. ("Qualified Institutions"), the $25,000
limitation shall apply to each beneficial owner of Notes held by a Qualified
Institution and the death of such beneficial owner shall entitle a Qualified
Institution to seek redemption of such Notes as if the deceased beneficial owner
were the record Holder. Such Qualified Institution, in its request for
redemption on behalf of such beneficial owners, must submit evidence,
satisfactory to the Trustee, that it directly or indirectly hold Notes on behalf
of such beneficial owner and must certify that the aggregate amount of requests
for redemption tendered by such Qualified Institution on behalf of such
beneficial owner in the initial period ending May 1, 1996 or in any subsequent
twelve month period does not exceed $25,000.
In the case of any Notes which are presented for redemption in part only,
upon such redemption the Company shall execute and the Trustee shall
authenticate and deliver to or on the order of the Holder of such Notes, without
service charge, a new Note(s), of any authorized denomination or denominations
as requested by such Holder, in aggregate principal amount equal to the
unredeemed portion of the principal of the Notes so presented.
Any Notes presented for redemption at the option of the Holder upon death
may be withdrawn by the person(s) presenting the same upon delivery of a written
request for such withdrawal to the Trustee. The Company may not use any Notes
purchased in the open market as a credit against its redemption obligations
hereunder.
The Trustee shall maintain at its main office a register (the "Redemption
Register") in which it shall record, in order of receipt, all requests for
redemption received by the Trustee upon the death of a Holder. Unless withdrawn,
all such requests shall remain in effect during the period in which they are
received and thereafter from period to period, until the Notes which are the
subject of such request have been redeemed. The Company's obligation to prepay
Notes tendered for prepayment is not cumulative.
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MODIFICATION AND WAIVER
Modification and amendment of the Indenture may be made by the Company and
the Trustee under the Indenture with the consent of the Holders of not less than
a 66 2/3% in aggregate principal amount of the Outstanding Securities of each
series issued under the Indenture (including the Notes) and affected by the
modification or amendment; provided, however, that no such modification or
amendment may, without the consent of the Holders of each Outstanding Security
of the series (including the Notes) affected thereby (a) change the Stated
Maturity of the principal of, or any installment of principal of or interest on,
any Security of such series (including the Notes); (b) reduce the principal
amount of or premium, if any, or interest on, any Security of any series
(including the Notes and including in the case of an Original Issue Discount
Security the amount payable upon acceleration of the maturity thereof); (c)
change the place or currency of payment of principal of or the premium, if any,
or interest on any Security of such series (including the Notes); (d) impair the
right to institute suit for the enforcement of any payment on any Security of
such series (including the Notes) on or after the Stated Maturity thereof (or,
in the case of redemption, on or after the Redemption Date); (e) modify the
subordination provision in a manner adverse to the Holders of the Notes of such
series (including the Notes); or (f) reduce the percentage in principal amount
of Outstanding Securities of any series (including the Notes), the consent of
whose Holders is required for modification or amendment of the Indenture or for
waiver of compliance with certain provisions of the Indenture or for waiver of
certain defaults. (Section 902)
The Holders of at least a 66 2/3% in aggregate principal amount of the
Outstanding Securities of any series (including the Notes) may, on behalf of all
Holders of that series of Securities, waive compliance by the Company with
certain restrictive provisions of the Indenture. (Section 1007) The Holders of a
majority in aggregate principal amount of the Outstanding Securities of any
series may, on behalf of all Holders of that series of Securities, waive any
past default under the Indenture, except a default in the payment of principal,
premium, if any, or interest and in respect of certain covenants. (Section 513)
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company may not consolidate with or merge into any other corporation or
transfer or sell, convey, exchange, transfer or lease its properties and assets
substantially as an entirety to any Person, unless (a) any successor or
purchaser is a corporation organized under the laws of any domestic
jurisdiction; (b) any such successor or purchaser expressly assumes the
Company's obligations on such Securities and under the Indenture; (c)
immediately after giving effect to such transaction, no Event of Default, and no
event which, after notice or lapse of time or both, would become an Event of
Default, shall have occurred and be continuing; and (d) certain other conditions
are met. (Section 801)
ASSUMPTION BY SUBSIDIARY
A Subsidiary may assume the Company's obligations under the Indenture
(including the Company's obligation to pay principal of and premium, if any, and
interest on the Securities (including the Notes), but excluding the Company's
obligation to comply with certain covenants provided that (a) such Subsidiary
expressly assumes the Company's obligations under the Indenture; (b) the Company
guarantees such Subsidiary's obligations; (c) such Subsidiary agrees to
indemnify each Holder against certain taxes and expenses relating to, or
incurred directly in connection with, such assumption; (d) immediately after
giving effect to the assumption, no Event of Default, and no event which, after
notice or lapse of time, or both, would become an Event of Default, shall have
occurred and be continuing; (e) certain Opinions of Counsel and Officers'
Certificates are delivered to the Trustee; and (f) certain other obligations are
met. (Section 803)
THE TRUSTEE
First American Trust Company, N.A. is the Trustee under the Indenture. The
Trustee or its affiliates from time to time conducts banking transactions with
the Company and its subsidiaries in the ordinary course of business. The
Indenture provides for the indemnification of the Trustee by the Company under
certain circumstances.
54

<PAGE>
UNDERWRITING
Pursuant to the Underwriting Agreement and subject to the terms and
conditions thereof, the Underwriters named below have agreed, severally, to
purchase from the Company the principal amount of Notes set forth opposite their
respective names.
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
NAME OF UNDERWRITER OF NOTES
<S> <C>
J.C. Bradford & Co. ........................................................................................ $ 7,666,667
Interstate/Johnson Lane Corporation......................................................................... 7,666,667
Morgan Keegan and Company, Inc. ............................................................................ 7,666,666
Total..................................................................................................... $ 23,000,000
</TABLE>

The Company may offer and sell Notes directly to a limited number of other
purchasers.
In the Underwriting Agreement, the Underwriters have agreed, subject to the
terms and conditions contained therein, to purchase all the Notes offered hereby
if any such Notes are purchased.
The Company has been advised that the Underwriters propose initially to
offer the Notes to the public at the interest rate set forth on the cover page
of this Prospectus and to certain dealers at such price less a concession not in
excess of $ . The Underwriters may allow and such dealers may reallow a
concession not in excess of $ to certain other dealers. After the
initial public offering, the public offering price and such concessions may be
changed.
The offering of the Notes is made for delivery when, as and if accepted by
the Underwriters and subject to prior sale and to withdrawal, cancellation or
modification of the offer without notice. The Underwriters reserve the right to
reject any order for the purchase of the Notes.
The Company has granted to the Underwriters an option, exercisable not
later than 30 days from the date of this Prospectus, to purchase up to an
additional $3,450,000 principal amount of Notes to cover over-allotments. To the
extent that the Underwriters exercise this option, each of the Underwriters will
have a firm commitment to purchase approximately the percentage thereof which
the principal amount of Notes to be purchased by it shown in the table above
bears to $23,000,000 and the Company will be obligated, pursuant to the option,
to sell such Notes to the Underwriters. The Underwriters may exercise such
option only to cover over-allotments made in connection with the sale of Notes
offered hereby. If purchased, the Underwriters will sell such additional Notes
on the same terms as those on which the $23,000,000 of Notes are being offered.
The Underwriting Agreement provides that the Company will indemnify the
Underwriters and controlling persons, if any, against certain liabilities,
including liabilities under the Securities Act of 1933, or to contribute to
payments which the Underwriters or any such controlling persons may be required
to make in respect thereof.
EXPERTS
The consolidated financial statements and the supplemental consolidated
financial statements of the Company incorporated by reference herein as of
December 31, 1994 and 1993 and for each of the years in the three-year period
ended December 31, 1994 have been so incorporated by reference in reliance on
the reports of Elliott, Davis & Company, L.L.P., independent certified public
accountants, given on the authority of said firm as experts in auditing and
accounting.
LEGAL MATTERS
Certain legal matters, including, among other things, the validity of the
Notes offered hereby, have been passed upon by Wyche, Burgess, Freeman & Parham,
P.A., counsel to the Company.
Counsel for the Underwriters is Nelson Mullins Riley & Scarborough, L.L.P.
55

<PAGE>
ADDITIONAL INFORMATION
The Company has filed with the Commission a Registration Statement on Form
S-3 (the "Registration Statement,") under the Securities Act of 1933, as amended
(the "Securities Act"), with respect to the Notes offered hereby. This
Prospectus does not contain all of the information set forth in the Registration
Statement and in the exhibits thereto. Certain items were omitted in accordance
with the rules and regulations of the Commission. Any interested party may
inspect the Registration Statement without charge at the public reference
facilities of the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549 and
may obtain copies of all or any part of it from the Commission upon payment of
the fees prescribed by the Commission. Statements contained herein which refer
to a document filed as an exhibit to the Registration Statement are qualified in
their entirety by reference to the copy of such document filed with the
Commission.
56

<PAGE>
NO DEALER, SALESMAN, OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS, AND ANY INFORMATION OR REPRESENTATION NOT CONTAINED HEREIN MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY OF THE
UNDERWRITERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES TO
WHICH IT RELATES, OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY
SUCH SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION MAY NOT
BE LEGALLY MADE. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE
HEREOF.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Available Information................................ 2
Incorporation of Certain Information by
Reference.......................................... 2
Prospectus Summary................................... 3
The Company.......................................... 6
Recent Acquisitions.................................. 6
Risk Factors......................................... 7
Use of Proceeds...................................... 8
Capitalization....................................... 9
Selected Consolidated Financial Data................. 10
Management's Discussion and Analysis of
Financial Condition and Results of
Operations......................................... 11
Unaudited Pro Forma Combined Condensed Financial
Information........................................ 31
Business............................................. 34
Management........................................... 46
Description of Notes................................. 48
Underwriting......................................... 55
Experts.............................................. 55
Legal Matters........................................ 55
Additional Information............................... 56
</TABLE>

$23,000,000

(Carolina First Corporation Logo appears here)

% SUBORDINATED NOTES
DUE 2005
PROSPECTUS
J.C. Bradford &Co.
Interstate/Johnson Lane
Corporation
Morgan Keegan & Company, Inc.
MAY , 1995

<PAGE>
PART-II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14: OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The expenses in connection with the sale of the Notes offered hereby, other
than underwriting discounts and commissions, are estimated as follows:
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee....................................... $ 9,121
National Association of Securities Dealers, Inc. filing fee............................... 3,145
Printing and engraving.................................................................... 80,000
Legal fees and expenses................................................................... 100,000
Accounting fees and expenses.............................................................. 70,000
Blue Sky qualifications, related legal fees and expenses.................................. 15,000
Miscellaneous............................................................................. 22,734
TOTAL.............................................................................. $300,000
</TABLE>

ITEM 15: INDEMNIFICATION OF DIRECTORS AND OFFICERS
Reference is made to Chapter 8, Article 5 of Title 33 of the 1976 Code of
Laws of South Carolina, as amended, which provides for indemnification of
officers and directors of South Carolina corporations in certain instances in
connection with legal proceedings involving any such persons because of being or
having been an officer or director. The Company's Bylaws provide (i) that the
Corporation shall indemnify any individual made a party to a proceeding because
he is or was a Director of the Corporation against liability incurred in the
proceeding to the fullest extent permitted by law, and (ii) that the Corporation
shall pay for or reimburse the reasonable expenses incurred by a Director who is
a party to a proceeding in advance of final disposition of the proceeding to the
fullest extent permitted by law. The Company has entered into indemnification
agreements with each of its Directors, which generally makes the
above-referenced Bylaws provisions the basis of a contract between the Company
and each director.
Chapter 8, Article 5 of Title 33 of the 1976 Code of Laws of South
Carolina, as amended, also permits a corporation to purchase and maintain
insurance on behalf of a person who is or was an officer or director. The
Company maintains directors' and officers' liability insurance.
Reference is made to Chapter 2 of Title 33 of the 1976 Code of Laws of
South Carolina, as amended respecting the limitation in a corporation's articles
of incorporation of the personal liability of a director for breach of the
director's fiduciary duty. Reference is made to the Company's Articles of
Amendment filed with the South Carolina Secretary of State on April 18, 1989
which state: "A director of the corporation shall not be personally liable to
the corporation or any of its shareholders for monetary damages for breach of
fiduciary duty as a director, provided that this provision shall not be deemed
to eliminate or limit the liability of a director (i) for any breach of the
director's duty of loyalty to the corporation or its shareholders, (ii) for acts
or omissions not in good faith or which involved gross negligence, intentional
misconduct, or a knowing violation of law, (iii) imposed under Section 33-8-330
of the South Carolina Corporations Law (improper distribution to shareholder),
or (iv) for any transaction from which the director derived an improper personal
benefit."
ITEM 16: EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(A) LISTING OF EXHIBITS:
<TABLE>
<CAPTION>
EXHIBIT
<C> <S> <C>
1.1 --
3.1 --
3.2 --
4.1 --
4.2 --
<CAPTION>
EXHIBIT
<C> <C>
1.1 Form of Underwriting Agreement.

3.1 Articles of Incorporation, as amended. Incorporated by reference to Exhibit 3.1 of the Company's Registration

Statement on Form S-4, Commission File No. 33-57389.

3.2 Bylaws: Incorporated by reference to Exhibit 4.2 of the Company's Quarterly Report on Form 10-Q for the quarter

ended September 30, 1993, Commission File No. 0-15083.

4.1 Specimen CFC Common Stock certificate: Incorporated by reference to Exhibit 4.1 of the Company's Registration

Statement on Form S-1, Commission File No. 33-7470.

4.2 Specimen Noncumulative Convertible Preferred Stock Series 1993 certificate: Incorporated by reference to Exhibit 4.3

from the Company's Registration Statement on Form S-2, Commission File No. 33-57110.

</TABLE>
II-1

<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
<C> <S> <C>
4.3 --
4.4 --
4.5 --
4.6 --
4.7 --
4.8 --
4.9 --
4.10 --
4.11 --
4.12 --
5.1 --
10.1 --
10.2 --
10.3 --
10.4 --
10.5 --
10.6 --
10.7 --
10.8 --
10.9 --
10.10 --
10.11 --
10.12 --
10.13 --
<CAPTION>
EXHIBIT
<C> <C>
4.3 Specimen Convertible Preferred Stock Series 1993B certificate: Incorporated by reference to Exhibit 4.3 from the

Company's Registration Statement on Form S-2, Commission File No. 33-75458.

4.4 Specimen Noncumulative Convertible Preferred Stock Series 1994 certificate: Incorporated by reference to Exhibit

4.12 from the Company's Registration Statement on Form S-2, Commission File No. 33-75458.

4.5 Articles of Incorporation: Included as Exhibit 3.1.

4.6 Bylaws: Included as Exhibit 3.2.

4.7 Series 1993 Preferred Stock Dividend Reinvestment Plan: Incorporated by reference to the Prospectus in the Company's

Registration Statement on Form S-3, Commission File No. 33-72868.

4.8 Common Stock Dividend Reinvestment Plan: Incorporated by reference to the Prospectus in the Company's Registration

Statement on Form S-3, Commission File No. 33-73280.

4.9 Series 1994 Preferred Stock Dividend Reinvestment Plan: Incorporated by reference to the Prospectus in the Company's

Registration Statement on Form S-3, Commission File No. 33-79774.

4.10 Shareholders' Rights Agreement: Incorporated by reference to Exhibit 2 of the Company's Current Report on Form 8-K

dated November 9, 1993, Commission File No. 0-15083.

4.11 Form of Indenture between the Company and First American Trust Company, N.A., as Trustee.

4.12 Form of Subordinated Note due 2005.

5.1 Opinion of Wyche, Burgess, Freeman & Parham, P.A. regarding the Notes.

10.1 Carolina First Restricted Stock Plan: Incorporated by reference to Exhibit 99.1 from the Company's Registration

Statement on Form S-8, Commission File No. 33-82670.

10.2 Employee Stock Ownership Plan: Incorporated by reference to Exhibit 10.2 of the Company's Annual Report on Form 10-K

for the year ended December 31, 1991, Commission File No. 0-15083.

10.3 Amended and Restated Stock Option Plan: Incorporated by reference to Exhibit 99.1 from the Company's Registration

Statement on Form S-8, Commission File No. 33-80822.

10.4 Salary Reduction Plan: Incorporated by reference to Exhibit 28.1 of the Company's Registration Statement on Form

S-8, Commission File No. 33-25424.

10.5 Noncompetition and Severance Agreement dated November 9, 1993, between the Company and Mack I. Whittle, Jr.:

Incorporated by reference to Exhibit 10.1 of the Company's Quarterly Report on Form 10-Q for the quarter ended

September 30, 1993, Commission File No. 0-15083.

10.6 Noncompetition and Severance Agreement dated November 9, 1993, between the Company and William S. Hummers III:

Incorporated by reference to Exhibit 10.2 of the Company's Quarterly Report on Form 10-Q for the quarter ended

September 30, 1993, Commission File No. 0-15083.

10.7 Noncompetition and Severance Agreement dated November 9, 1993, between the Company and James W. Terry, Jr.:

Incorporated by reference to Exhibit 10.3 of the Company's Quarterly Report on Form 10-Q for the quarter ended

September 30, 1993, Commission File No. 0-15083.

10.8 Short-Term Performance Plan: Incorporated by reference to Exhibit 10.3 of the Company's Quarterly Report on Form

10-Q for the quarter ended September 30, 1993, Commission File No. 0-15083.

10.9 Long-Term Management Performance Plan. Incorporated by reference to Exhibit 10.11 of the Company's Form 10-K for the

year ended December 31, 1994.

10.10 Employee Stock Purchase Plan: Incorporated by reference to Exhibit 99.1 from the Company's Registration Statement on

Form S-8, Commission File No. 33-79668.

10.11 Directors Stock Option Plan: Incorporated by reference to Exhibit 99.1 from the Company's Registration Statement on

Form S-8, Commission File No. 33-82668.

10.12 Capital Maintenance Commitment and Guaranty between the Company, Carolina First Bank and the Federal Deposit

Insurance Corporation. Incorporated by reference to Exhibit 10.16 of The Company's Annual Report on Form 10-K for

the year ended December 31, 1994, Commission File No. 0-15083.

10.13 Reorganization Agreement dated as of November 14, 1994 between and among the Company, Carolina First Bank and MNB:

Incorporated by reference to Exhibit 10.8 of The Company's Registration Statement on Form S-4, Commission File No.

33-57389.

</TABLE>
II-2

<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
<C> <S> <C>
10.14 --
10.15 --
10.16 --
11.1 --
12.1 --
21.1 --
23.1 --
23.2 --
24.1 --
25.1 --
27.1 --
<CAPTION>
EXHIBIT
<C> <C>
10.14 Pooling and Servicing Agreement dated as of December 31, 1994 between Carolina First Bank, as Seller and Master

Servicer, and The Chase Manhattan Bank, as Trustee. Incorporated by reference to Exhibit 28.1 of The Company's

Current Report on Form 8-K dated as of January 24, 1995.

10.15 1994-A Supplement dated as of December 31, 1994 between Carolina First Bank, as Seller and Master Servicer, and The

Chase Manhattan Bank, as Trustee. Incorporated by reference to Exhibit 28.2 of the Company's Current Report on Form

8-K dated as of January 24, 1995.

10.16 Servicing Rights Purchase Agreement between Bank of America, F.S.B. and Carolina First Bank dated as of March 31,

1995: Incorporated by reference to Exhibit 10.17 of Amendment No.1 to the Company's Annual Report on Form 10-K for

the year ended December 31, 1994.

11.1 Computation of Per Share Earnings.

12.1 Ratio of Earnings to Fixed Charges and Ratio of Earnings to Fixed Charges and Preferred Stock Dividends.

21.1 Subsidiaries of the Registrant: Carolina First Bank and Carolina First Mortgage Company.

23.1 Consent of Wyche, Burgess, Freeman & Parham, P.A.: Contained in Exhibit 5.1.

23.2 Consent of Elliott Davis & Co: Contained in Part II at II-6.

24.1 The Power of Attorney: Contained on the signature page of the initial filing of this Registration Statement.

25.1 Statement of Eligibility of Trustee on Form T-1. To be filed Friday April 28, 1995 in hard copy form.

27.1 Financial Data Schedules.

</TABLE>

ITEM 22: UNDERTAKINGS
(a) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
(b) The undersigned Registrant hereby undertakes that:
(1) for purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) for the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-3

<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Greenville, State of South Carolina, on April 20,
1995.
CAROLINA FIRST CORPORATION
By: /s/ WILLIAM S. HUMMERS III
WILLIAM S. HUMMERS III,
EXECUTIVE VICE PRESIDENT
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Mack I. Whittle, Jr. and William S.
Hummers III, and each of them, as true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution for him or her and in his or
her name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this registration statement,
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the SEC, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all which said attorneys-in-fact and
agents or any of them, or their or his or her substitute or substitutes, may
lawfully do, or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and as of the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ WILLIAM R. TIMMONS, JR. Chairman of the Board April 20, 1995
WILLIAM R. TIMMONS, JR.
/s/ MACK I. WHITTLE, JR. President, Chief Executive Officer and Director April 20, 1995
MACK I. WHITTLE, JR. (Principal Executive Officer)
/s/ WILLIAM S. HUMMERS III Executive Vice President, Director (Principal April 20, 1995
WILLIAM S. HUMMERS III Accounting and Financial Officer)
/s/ JUDD B. FARR Director April 20, 1995
JUDD B. FARR
/s/ C. CLAYMON GRIMES, JR. Director April 20, 1995
C. CLAYMON GRIMES, JR.
/s/ M. DEXTER HAGY Director April 20, 1995
M. DEXTER HAGY
/s/ ROBERT E. HAMBY, JR. Director April 20, 1995
ROBERT E. HAMBY, JR.
/s/ R. GLENN HILLIARD Director April 20, 1995
R. GLENN HILLIARD
/s/ RICHARD E. INGRAM Director April 20, 1995
RICHARD E. INGRAM
/s/ CHARLES B. SCHOOLER Director April 20, 1995
CHARLES B. SCHOOLER
/s/ ELIZABETH P. STALL Director April 20, 1995
ELIZABETH P. STALL
/s/ WILLIAM M. WEBSTER III Director April 20, 1995
WILLIAM M. WEBSTER III
</TABLE>

II-4

<PAGE>
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the reference to our firm under the caption "Experts" and to
the use of our reports dated February 3, 1995 and April 24, 1995 in the
Registration Statement (Form S-3) and related Prospectus of CAROLINA FIRST
CORPORATION for the registration of $26,450,000 principal amount of Subordinated
Notes.
ELLIOTT, DAVIS & COMPANY, L.L.P.
Greenville, South Carolina
April 25, 1995
II-5

<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
<C> <S> <C>
1.1 -- Form of Underwriting Agreement.
3.1 -- Articles of Incorporation, as amended. Incorporated by reference to Exhibit 3.1 of the Company's
Registration Statement on Form S-4, Commission File No. 33-57389.
3.2 -- Bylaws: Incorporated by reference to Exhibit 4.2 of the Company's Quarterly Report on Form 10-Q for
the quarter ended September 30, 1993, Commission File No. 0-15083.
4.1 -- Specimen CFC Common Stock certificate: Incorporated by reference to Exhibit 4.1 of the Company's
Registration Statement on Form S-1, Commission File No. 33-7470.
4.2 -- Specimen Noncumulative Convertible Preferred Stock Series 1993 certificate: Incorporated by
reference to Exhibit 4.3 from the Company's Registration Statement on Form S-2, Commission File No.
33-57110.
4.3 -- Specimen Convertible Preferred Stock Series 1993B certificate: Incorporated by reference to Exhibit
4.3 from the Company's Registration Statement on Form S-2, Commission File No. 33-75458.
4.4 -- Specimen Noncumulative Convertible Preferred Stock Series 1994 certificate: Incorporated by
reference to Exhibit 4.12 from the Company's Registration Statement on Form S-2, Commission File No.
33-75458.
4.5 -- Articles of Incorporation: Included as Exhibit 3.1.
4.6 -- Bylaws: Included as Exhibit 3.2.
4.7 -- Series 1993 Preferred Stock Dividend Reinvestment Plan: Incorporated by reference to the Prospectus
in the Company's Registration Statement on Form S-3, Commission File No. 33-72868.
4.8 -- Common Stock Dividend Reinvestment Plan: Incorporated by reference to the Prospectus in the
Company's Registration Statement on Form S-3, Commission File No. 33-73280.
4.9 -- Series 1994 Preferred Stock Dividend Reinvestment Plan: Incorporated by reference to the Prospectus
in the Company's Registration Statement on Form S-3, Commission File No. 33-79774.
4.10 -- Shareholders' Rights Agreement: Incorporated by reference to Exhibit 2 of the Company's Current
Report on Form 8-K dated November 9, 1993, Commission File No. 0-15083.
4.11 -- Form of Indenture between the Company and First American Trust Company, N.A., as Trustee.
4.12 -- Form of Subordinated Note due 2005.
5.1 -- Opinion of Wyche, Burgess, Freeman & Parham, P.A. regarding the Notes.
10.1 -- Carolina First Restricted Stock Plan: Incorporated by reference to Exhibit 99.1 from the Company's
Registration Statement on Form S-8, Commission File No. 33-82670.
10.2 -- Employee Stock Ownership Plan: Incorporated by reference to Exhibit 10.2 of the Company's Annual
Report on Form 10-K for the year ended December 31, 1991, Commission File No. 0-15083.
10.3 -- Amended and Restated Stock Option Plan: Incorporated by reference to Exhibit 99.1 from the Company's
Registration Statement on Form S-8, Commission File No. 33-80822.
10.4 -- Salary Reduction Plan: Incorporated by reference to Exhibit 28.1 of the Company's Registration
Statement on Form S-8, Commission File No. 33-25424.
10.5 -- Noncompetition and Severance Agreement dated November 9, 1993, between the Company and Mack I.
Whittle, Jr.: Incorporated by reference to Exhibit 10.1 of the Company's Quarterly Report on Form
10-Q for the quarter ended September 30, 1993, Commission File No. 0-15083.
10.6 -- Noncompetition and Severance Agreement dated November 9, 1993, between the Company and William S.
Hummers III: Incorporated by reference to Exhibit 10.2 of the Company's Quarterly Report on Form
10-Q for the quarter ended September 30, 1993, Commission File No. 0-15083.
<CAPTION>
SEQUENTIAL
EXHIBIT NO. PAGE NO.
<C> <<C>
1.1
3.1
3.2
4.1
4.2
4.3
4.4
4.5
4.6
4.7
4.8
4.9
4.10
4.11
4.12
5.1
10.1
10.2
10.3
10.4
10.5
10.6

<PAGE>
EXHIBIT NO. DESCRIPTION
10.7 -- Noncompetition and Severance Agreement dated November 9, 1993, between the Company and James W.
Terry, Jr.: Incorporated by reference to Exhibit 10.3 of the Company's Quarterly Report on Form 10-Q
for the quarter ended September 30, 1993, Commission File No. 0-15083.
10.8 -- Short-Term Performance Plan: Incorporated by reference to Exhibit 10.3 of the Company's Quarterly
Report on Form 10-Q for the quarter ended September 30, 1993, Commission File No. 0-15083.
10.9 -- Long-Term Management Performance Plan. Incorporated by reference to Exhibit 10.11 of the Company's
Form 10-K for the year ended December 31, 1994.
10.10 -- Employee Stock Purchase Plan: Incorporated by reference to Exhibit 99.1 from the Company's
Registration Statement on Form S-8, Commission File No. 33-79668.
10.11 -- Directors Stock Option Plan: Incorporated by reference to Exhibit 99.1 from the Company's
Registration Statement on Form S-8, Commission File No. 33-82668.
10.12 -- Capital Maintenance Commitment and Guaranty between the Company, Carolina First Bank and the Federal
Deposit Insurance Corporation. Incorporated by reference to Exhibit 10.16 of The Company's Annual
Report on Form 10-K for the year ended December 31, 1994, Commission File No. 0-15083.
10.13 -- Reorganization Agreement dated as of November 14, 1994 between and among the Company, Carolina First
Bank and MNB: Incorporated by reference to Exhibit 10.8 of The Company's Registration Statement on
Form S-4, Commission File No. 33-57389.
10.14 -- Pooling and Servicing Agreement dated as of December 31, 1994 between Carolina First Bank, as Seller
and Master Servicer, and The Chase Manhattan Bank, as Trustee. Incorporated by reference to Exhibit
28.1 of The Company's Current Report on Form 8-K dated as of January 24, 1995.
10.15 -- 1994-A Supplement dated as of December 31, 1994 between Carolina First Bank, as Seller and Master
Servicer, and The Chase Manhattan Bank, as Trustee. Incorporated by reference to Exhibit 28.2 of the
Company's Current Report on Form 8-K dated as of January 24, 1995.
10.16 -- Servicing Rights Purchase Agreement between Bank of America, F.S.B. and Carolina First Bank dated as
of March 31, 1995: Incorporated by reference to Exhibit 10.17 of Amendment No.1 to the Company's
Annual Report on Form 10-K for the year ended December 31, 1994.
11.1 -- Computation of Per Share Earnings.
12.1 -- Ratio of Earnings to Fixed Charges and Ratio of Earnings to Fixed Charges and Preferred Stock
Dividends.
21.1 -- Subsidiaries of the Registrant: Carolina First Bank and Carolina First Mortgage Company.
23.1 -- Consent of Wyche, Burgess, Freeman & Parham, P.A.: Contained in Exhibit 5.1.
23.2 -- Consent of Elliott Davis & Co: Contained in Part II at II-6.
24.1 -- The Power of Attorney: Contained on the signature page of the initial filing of this Registration
Statement.
25.1 -- Statement of Eligibility of Trustee on Form T-1. To be filed Friday April 28, 1995 in hard copy
form.
27.1 -- Financial Data Schedules.
<CAPTION>
SEQUENTIAL
EXHIBIT NO. PAGE NO.
10.7
10.8
10.9
10.10
10.11
10.12
10.13
10.14
10.15
10.16
11.1
12.1
21.1
23.1
23.2
24.1
25.1
27.1

</TABLE>

<PAGE>

CAROLINA FIRST CORPORATION

_____% Subordinated Notes Due 2005

$23,000,000 Principal Amount

UNDERWRITING AGREEMENT

______________, 1995

J.C. BRADFORD & CO.
INTERSTATE/JOHNSON LANE CORPORATION
MORGAN KEEGAN & COMPANY, INC.
As Representatives of the several Underwriters
c/o J.C. Bradford & Co.
330 Commerce Street
Nashville, Tennessee 37201

Dear Sirs:

Carolina First Corporation, a South Carolina corporation
(the "Company"), proposes to sell to the several underwriters
named in Schedule I hereto (the "Underwriters") for whom you are
acting as the representatives (the "Representatives") an
aggregate of $23,000,000 principal amount (the "Firm Securities")
of the Company's _____% Subordinated Notes Due 2005 (the "Notes")
to be issued pursuant to the provisions of an Indenture, dated as
of ____________, 1995 (the "Indenture"), between the Company and
First American Trust Company, N.A., as Trustee (the "Trustee").
The Company has also agreed to grant to you an option (the
"Option") to purchase up to an additional $3,000,000 principal
amount of the Notes (the "Option Securities") on the terms and
for the purposes set forth in Section 1(b) hereof. The Firm
Securities and the Option Securities are hereinafter collectively
referred to as the "Securities".

The Company confirms as follows its agreements with you.

1. Agreement to Sell and Purchase; Public Offering.

(a) The Company agrees to sell to each of the
Underwriters, and upon the basis of the representations,
warranties and agreements of the Company herein contained and
subject to all the terms and conditions of this Agreement, each
of the Underwriters agrees, severally and not jointly, to
purchase from the Company, the respective principal amount of

1
<PAGE>

Firm Securities set forth opposite the name of such Underwriter
on Schedule I, all at the purchase price of _____% of the
principal amount thereof.

(b) Subject to all the terms and conditions of this
Agreement, the Company grants the Underwriters an Option to
purchase, severally and not jointly, up to $3,000,000 principal
amount of the Option Securities from the Company at the same
percentage of the principal amount thereof as you shall pay for
the Firm Securities, plus accrued interest from the Closing Date
to the Option Closing Date described below. The Option may be
exercised only to cover over-allotments in the sale of the Firm
Securities and may be exercised in whole or in part at any time
(but not more than once) on or before the 30th day after the date
of the Prospectus (as defined below) upon written or telegraphic
notice (the "Option Securities Notice") by you to the Company no
later than 12:00 noon, Nashville, Tennessee time at least two and
no more than ten business days before the date specified for
closing in the Option Securities Notice (the "Option Closing
Date") setting forth the aggregate principal amount of Option
Securities to be purchased and the time and date for such
purchase. On the Option Closing Date, the Company will issue and
sell to the Underwriters the principal amount of Option
Securities set forth in the Option Securities Notice, and unless
otherwise adjusted by the Representatives, each of the
Underwriters will purchase such percentage of the Option
Securities as is equal to the percentage of Firm Securities that
such Underwriter is purchasing.

(c) After the Registration Statement becomes effective,
upon the authorization by you of the release of the Securities,
the several Underwriters propose to offer the Firm Securities and
the Option Securities purchased by the Underwriters for sale at
the price set forth in the Prospectus (the initial offering
price) and upon the terms set forth therein.

2. Delivery and Payment.

Delivery of the Firm Securities shall be made to you
against payment of the purchase price by certified or official
bank check payable in next day funds to the order of the Company
at the office of J.C. Bradford & Co., 330 Commerce Street,
Nashville, Tennessee 37201, or at such other place as may be
agreed upon by the Representatives and the Company, at 10:00
a.m., Nashville time, on the fifth full business day following
the date of this Agreement, or at such time on such other date,
not later than the seventh full business day after the date of
this Agreement, as may be agreed upon by the Company and the
Representatives (such date is hereinafter referred to as the
"Closing Date").

To the extent the Option is exercised, delivery of the
Option Securities against payment therefor (in the manner
specified above) will take place at the offices specified above

2
<PAGE>

for the Closing Date at the time and date (which may be the
Closing Date) specified in the Option Securities Notice.

Certificates evidencing the Securities shall be in
definitive form and shall be registered in such names and in such
denominations as you shall request not less than 48 hours prior
to the Closing Date or the Option Closing Date, as the case may
be, by written notice to the Company. For the purpose of
expediting the checking and packaging of certificates for the
Securities, the Company agrees to make such certificates
available for inspection at least 24 hours prior to the Closing
Date or the Option Closing Date, as the case may be, at a
location to be designated by you, which may be in New York, New
York, or elsewhere.

The cost of original issue tax stamps, if any, in
connection with the issuance and delivery of the Firm Securities
and Option Securities by the Company to the Underwriters shall be
borne by the Company. The Company will pay and save each of the
Underwriters and any subsequent holder of the Securities harmless
from any and all liabilities with respect to or resulting from
any failure or delay in paying Federal and state stamp and other
transfer taxes, if any, which may be payable or determined to be
payable in connection with the original issuance or sale to such
Underwriter of the Firm Securities and Option Securities.

3. Representations and Warranties of the Company.

The Company represents, warrants and covenants to each
of the Underwriters that:

(a) the Company meets the requirements for use of
Form S-3, and a registration statement (Registration No. 33-
____________) on Form S-3 relating to the Securities, including a
preliminary prospectus and such amendments to such registration
statement as may have been required to the date of this
Agreement, has been prepared by the Company under the provisions
of the Securities Act of 1933, as amended (the "Act"), the Trust
Indenture Act of 1939, as amended (the "TIA") and the rules and
regulations of the Securities and Exchange Commission (the
"Commission") under those acts, and has been filed with the
Commission. The term "preliminary prospectus" as used herein
means a preliminary prospectus as contemplated by Rule 430 or
Rule 430A of the Rules and Regulations included at any time as
part of the registration statement. Copies of such registration
statement and amendments and of each related preliminary
prospectus have been delivered to you. If such registration
statement has not become effective, a further amendment to such
registration statement, including a form of final prospectus,
necessary to permit such registration statement to become
effective, will be filed promptly by the Company with the
Commission. If such registration statement has become effective,
a final prospectus containing information permitted to be omitted
at the time of effectiveness by Rule 430A of the Rules and

3
<PAGE>

Regulations will be filed promptly by the Company with the
Commission in accordance with Rule 424(b) of the Rules and
Regulations. The term "Registration Statement" means the
registration statement as amended at the time it becomes or
became effective (the "Effective Date"), including financial
statements and all exhibits and any information deemed to be
included by Rule 430A. The term "Prospectus" means the
prospectus as first filed with the Commission pursuant to Rule
424(b) of the Rules and Regulations or, if no such filing is
required, the form of final prospectus included in the
Registration Statement at the Effective Date. Any reference
herein to the Registration Statement, any preliminary prospectus
or the Prospectus shall be deemed to refer to and include the
documents incorporated by reference directly or indirectly
therein at any time including documents by the Company pursuant
to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act
(defined below) subsequent to the Effective Date but prior to the
termination of the offering of the Securities (such incorporated
documents being herein called the "Incorporated Documents").

(b) On the Effective Date, the date the Prospectus is
first filed with the Commission pursuant to Rule 424(b) (if
required), at all times subsequent to and including the Closing
Date and, if later, the Option Closing Date and when any post-
effective amendment to the Registration Statement becomes
effective or any amendment or supplement to the Prospectus is
filed with the Commission, the Registration Statement and the
Prospectus (as amended or as supplemented if the Company shall
have filed with the Commission any amendment or supplement
thereto), including the financial statements included or
incorporated by reference in the Prospectus, did or will comply
with all applicable provisions of the Act, the TIA, the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
the rules and regulations under the Act, the TIA and the Exchange
Act (collectively, the "Rules and Regulations"), and will contain
all statements required to be stated therein in accordance with
the Act, the TIA, the Exchange Act, and the Rules and
Regulations. On the Effective Date and when any post-effective
amendment to the Registration Statement becomes effective, no
part of the Registration Statement, the Prospectus or any such
amendment or supplement did or will contain an untrue statement
of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements
therein not misleading. At the Effective Date, the date the
Prospectus or any amendment or supplement to the Prospectus is
filed with the Commission and at the Closing Date and, if later,
the Option Closing Date, the Prospectus did not or will not
contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading. The foregoing representations and warranties in this
Section 3(b) do not apply to any statements or omissions made in
reliance on and in conformity with information relating to the
Underwriters furnished in writing to the Company by the

4
<PAGE>

Representatives specifically for inclusion in the Registration
Statement or Prospectus or any amendment or supplement thereto.
The Company acknowledges that the statements set forth under the
heading "Underwriting" in the Prospectus constitute the only
information relating to the Underwriters furnished in writing to
the Company by the Representatives specifically for inclusion in
the Registration Statement.

(c) The Incorporated Documents, when they became or
become effective or were or shall be filed with the Commission,
as the case may be, complied or will comply in all material
respects with the requirements of the Act, the TIA, or the
Exchange Act, as applicable, and the Rules and Regulations.

(d) The only subsidiaries (as defined in the Rules and
Regulations) of the Company are Carolina First Bank, a South
Carolina-chartered commercial bank ("Carolina First Bank"), and
Carolina First Mortgage Company, a South Carolina business
corporation ("CF Mortgage", and together with Carolina First
Bank, the "Subsidiaries"). The Company is, and at the Closing
Date will be, a corporation duly organized, validly existing and
in good standing under the laws of South Carolina duly registered
as a bank holding company under the Bank Holding Company Act of
1956, as amended (the "BHC Act"). Carolina First Bank is, and at
the Closing Date will be, a commercial bank duly organized,
validly existing and in good standing under the laws of South
Carolina. Carolina First Bank is a commercial bank duly
authorized to conduct a general banking business in accordance
with its Charter, subject to the supervision of the South
Carolina State Board of Financial Institutions and the Federal
Deposit Insurance Corporation. The Company and each of its
subsidiaries has, and at the Closing Date will have, full power
and authority to conduct all the activities conducted by it, to
own or lease all the assets owned or leased by it and to conduct
its business as described in the Registration Statement and the
Prospectus. Carolina First Bank is an insured bank as defined in
the Federal Deposit Insurance Act. The Company and each
Subsidiary is, and at the Closing Date will be, duly licensed or
qualified to do business and in good standing as a foreign
corporation in all jurisdictions in which the nature of the
activities conducted by it or the character of the assets owned
or leased by it makes such licensing or qualification necessary.
Except for the stock of the Subsidiaries or as disclosed in the
Registration Statement or in a contemporaneous letter to the
Representatives, the Company does not own, and at the Closing
Date will not own, directly or indirectly, any shares of stock or
any other equity or long-term debt securities of any corporation
or have any equity interest in any firm, partnership, joint
venture, association or other entity. Complete and correct
copies of the Articles of Incorporation or Charter, and of the
Bylaws, of the Company and each Subsidiary, and all amendments
thereto, have been delivered to you, and no changes therein will
be made subsequent to the date hereof and prior to the Closing
Date or, if later, the Option Closing Date.

5
<PAGE>

(e) The financial statements and schedules included or
incorporated by reference in the Registration Statement or the
Prospectus present fairly the consolidated financial condition of
the Company as of the respective dates thereof and the
consolidated results of operations and cash flows of the Company
for the respective periods covered thereby, all in conformity
with generally accepted accounting principles applied on a
consistent basis throughout the entire period involved, except as
otherwise disclosed in the Prospectus. The financial and
statistical data set forth in the Prospectus under the captions
"Prospectus Summary", "Summary Consolidated Financial Data", "The
Company", "Recent Acquisitions", "Use of Proceeds",
"Capitalization", "Selected Consolidated Financial Data",
"Management's Discussion and Analysis of Financial Condition and
Results of Operations", "Business" and "Management" fairly
presents the information set forth therein on the basis stated in
the Prospectus. No other financial statements or schedules of
the Company are required by the Act, the TIA, the Exchange Act or
the Rules and Regulations to be included in the Registration
Statement or the Prospectus. Elliott, Davis & Co. (the
"Accountants"), who have reported on such financial statements
and schedules, are independent accountants with respect to the
Company as required by the Act and the Rules and Regulations.

(f) The Company's system of internal accounting
controls taken as a whole is sufficient to meet the broad
objectives of internal accounting control insofar as those
objectives pertain to the prevention or detection of errors or
irregularities in amounts that would be material in relation to
the Company's financial statements; and, except as disclosed in
the Prospectus, neither the Company nor any of its Subsidiaries
nor any employee or agent of the Company or any Subsidiary has
made any payment of funds of the Company or any Subsidiary or
received or retained any funds in violation of any law, rule or
regulation.

(g) Subsequent to the respective dates as of which
information is given in the Registration Statement and the
Prospectus and prior to the Closing Date, except as set forth in
or contemplated by the Registration Statement and the Prospectus,
(i) there has not been and will not have been any change in the
capitalization of the Company other than pursuant to the exercise
of employee stock options, or any material adverse change in the
business, properties, business prospects, condition (financial or
otherwise) or results of operations of the Company and its
Subsidiaries, arising for any reason whatsoever, (ii) neither the
Company nor its Subsidiaries has incurred nor will it incur any
material liabilities or obligations, direct or contingent, except
in the ordinary course of the banking business of its
Subsidiaries, nor has it entered into nor will it enter into any
material transactions other than pursuant to this Agreement and
the transactions referred to herein and (iii) the Company has not
and will not have paid or declared any dividends or other
distributions of any kind on any class of its capital stock.

(h) The Company is not an "investment company" or an
"affiliated person" of, or "promoter" or "principal underwriter"
for, an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended.

(i) Except as set forth in the Registration Statement
and the Prospectus, there are no actions, suits or proceedings
pending or threatened against or affecting the Company or any
Subsidiary or any of their respective officers in their capacity
as such, before or by any Federal or state court, commission,
regulatory body, administrative agency or other governmental
body, domestic or foreign, wherein an unfavorable ruling,
decision or finding might materially and adversely affect the
Company or its Subsidiaries or its business, properties, business
prospects, condition (financial or otherwise) or results of
operations or prevent or materially hinder the consummation of
this Agreement.

(j) The Company and each Subsidiary has, and at the
Closing Date will have, (i) all governmental licenses, permits,
consents, orders, approvals and other authorizations necessary to
carry on its business as contemplated in the Prospectus, (ii)
complied in all material respects with all laws, regulations and
orders applicable to it or its business and (iii) performed all
its obligations required to be performed by it, and is not, and
at the Closing Date will not be, in default, under any contract
or other instrument material to it to which it is a party or by
which its property is bound or affected. To the best knowledge
of the Company and each Subsidiary, no other party under any
contract or other instrument to which it is a party is in default
in any respect thereunder. Neither the Company nor any
Subsidiary is, nor at the Closing Date will any of them be, in
violation of any provision of its Articles of Incorporation,
Charter or Bylaws.

(k) No consent, approval, authorization or order of,
or any filing or declaration with, any court or governmental
agency or body is required for the consummation by the Company of
the transactions on its part contemplated herein or in the
Indenture, except such as have been obtained under the Act, the
TIA, or the Rules and Regulations and such as may be required
under state securities or Blue Sky laws or the Bylaws and rules
of the National Association of Securities Dealers, Inc. (the
"NASD") in connection with the purchase and distribution by the
Underwriters of the Securities.

(l) The Company has full corporate power and authority
to enter into this Agreement and the Indenture. This Agreement
and the Indenture have been duly authorized, executed and
delivered by the Company and each constitutes a valid and binding
agreement of the Company and is enforceable against the Company
in accordance with the terms hereof. The performance of this
Agreement and the Indenture and the consummation of the
transactions contemplated hereby and thereby will not result in

7
<PAGE>

the creation or imposition of any material lien, charge or
encumbrance upon any of the assets of the Company or any
Subsidiary pursuant to the terms or provisions of, or result in a
breach or violation of any of the terms or provisions of, or
constitute a default under, or give any other party a right to
terminate any of its obligations under, or result in the
acceleration of any obligation under, the respective Articles of
Incorporation, Charter or Bylaws of the Company or its
Subsidiaries, any indenture, mortgage, deed of trust, voting
trust agreement, loan agreement, bond, debenture, note agreement
or other evidence of indebtedness, lease, contract or other
agreement or instrument to which the Company or any Subsidiary is
a party or by which the Company or any Subsidiary or any of its
or their properties are bound or affected, or violate or conflict
with any judgment, ruling, decree, order, statute, rule or
regulation of any court or other governmental agency or body
applicable to the business or properties of the Company or any
Subsidiary.

(m) The Company and each Subsidiary has good and
marketable title to all properties and assets described in the
Prospectus as owned by it, free and clear of all liens, charges,
encumbrances or restrictions, except such as are described in the
Prospectus or are not material to the business of the Company or
its Subsidiaries. The Company and each Subsidiary has valid,
subsisting and enforceable leases for the properties described in
the Prospectus as leased by it, with such exceptions as are not
material and do not materially interfere with the use made and
proposed to be made of such properties by the Company and such
Subsidiaries. The Company and each of its Subsidiaries owns or
leases all such properties as are necessary to its respective
operations as now conducted.

(n) There is no document or contract of a character
required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration
Statement that is not described or filed as required. All such
contracts to which the Company or any Subsidiary is a party have
been duly authorized, executed and delivered by the Company or
such Subsidiary, constitute valid and binding agreements of the
Company or such Subsidiary and are enforceable against the
Company or such Subsidiary in accordance with the terms thereof.

(o) No statement, representation, warranty or covenant
made by the Company in this Agreement or made in any certificate
or document required by this Agreement to be delivered to you was
or will be, when made, inaccurate, untrue or incorrect.

(p) Neither the Company nor any of its directors,
officers or controlling persons has taken, directly or
indirectly, any action designed, or which might reasonably be
expected, to cause or result, under the Act, the Exchange Act or
otherwise, in, or which has constituted, stabilization or

8
<PAGE>

manipulation of the price of any security of the Company to
facilitate the sale or resale of the Securities.

(q) No holder of securities of the Company has rights
to the registration of any securities of the Company because of
the filing of the Registration Statement.

(r) As described in the Registration Statement or the
Prospectus, the Company's allowances for possible loan losses at
December 31, 1993 and 1994 were, as of the respective dates
thereof, adequate in all material respects to provide for all
anticipated losses, net of recoveries related to loans previously
charged-off, on loans outstanding as of the respective dates
thereof, and there has not been any material adverse change in
the collectability of the loan portfolio of the Company and its
Subsidiaries since December 31, 1994, except as otherwise
disclosed in the Registration Statement and the Prospectus, and
the provision for possible loan losses maintained by the Company
and its Subsidiaries is adequate in all material respects in
light of anticipated loan charge-offs.

(s) Other than as contemplated by this Agreement,
there is no broker, finder or other party that is entitled to
receive from the Company or any Subsidiary any brokerage or
finder's fee or other fee or commission as a result of any of the
transactions contemplated by this Agreement.

4. Agreements of the Company.

The Company covenants and agrees with each of the
Underwriters as follows:

(a) The Company will not, either prior to the
Effective Date or thereafter during such period as the Prospectus
is required by law to be delivered in connection with sales of
the Securities by an underwriter or dealer, file any amendment or
supplement to the Registration Statement or the Prospectus,
unless a copy thereof shall first have been submitted to you
within a reasonable period of time prior to the filing thereof
and you shall not have objected thereto in good faith.

(b) The Company will use its best efforts to cause the
Registration Statement to become effective, and will notify you
promptly, and will confirm such advice in writing, (1) when the
Registration Statement has become effective and when any post-
effective amendment thereto becomes effective, (2) of any request
by the Commission for amendments or supplements to the
Registration Statement or the Prospectus or for additional
information, (3) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement
or the initiation of any proceedings for that purpose or the
threat thereof, (4) of the happening of any event during the
period mentioned in the second sentence of Section 4(e) that in
the judgment of the Company makes any statement made in the

9
<PAGE>

Registration Statement or the Prospectus untrue or that requires
the making of any changes in the Registration Statement or the
Prospectus in order to make the statements therein, in light of
the circumstances in which they are made, not misleading and (5)
of receipt by the Company or any representatives or attorney of
the Company of any other communication from the Commission
relating to the Company, the Registration Statement, any
preliminary prospectus or the Prospectus. If at any time the
Commission shall issue any order suspending the effectiveness of
the Registration Statement, the Company will make every
reasonable effort to obtain the withdrawal of such order at the
earliest possible moment. If the Company has omitted any
information from the Registration Statement pursuant to Rule 430A
of the Rules and Regulations, the Company will use its best
efforts to comply with the provisions of and make all requisite
filings with the Commission pursuant to said Rule 430A and to
notify the Representatives promptly of all such filings.

(c) The Company will furnish to you, without charge,
four signed copies of the Registration Statement and of any post-
effective amendment thereto, including financial statements and
schedules, and all exhibits thereto (including any document filed
under the Exchange Act and deemed to be incorporated by reference
into the Prospectus).

(d) The Company will comply with all the provisions of
any undertakings contained in the Registration Statement. The
Company will, from time to time, after the effective date of the
Registration Statement file with the Commission such reports as
are required by the Act, the TIA, the Exchange Act, and the Rules
and Regulations, and shall also file with state securities
commissions in states where the Securities have been sold by you
(as you shall have advised us in writing) such reports as are
required to be filed by the securities acts and the regulations
of those states.

(e) On the Effective Date, and thereafter from time to
time, the Company will deliver to each of you, without charge, as
many copies of the prospectus or any amendment or supplement
thereto as you may reasonably request. The Company consents to
the use of the Prospectus or any amendment or supplement thereto
by you and by all dealers to whom the Securities may be sold,
both in connection with the offering or sale of the Securities
and for any period of time thereafter during which the Prospectus
is required by law to be delivered in connection therewith. If
during such period of time any event shall occur which in the
judgment of the Company or your counsel should be set forth in
the Prospectus in order to make any statement therein, in the
light of the circumstances under which it was made, not
misleading, or if it is necessary to supplement or amend the
Prospectus to comply with law, the Company will forthwith prepare
and duly file with the Commission an appropriate supplement or
amendment thereto, and will deliver to each of you, without

10
<PAGE>

charge, such number of copies thereof as you may reasonably
request.

(f) Prior to any public offering of the Securities by
you, the Company will cooperate with you and your counsel in
connection with the registration or qualification of the
Securities for offer and sale under the securities or Blue Sky
laws of such jurisdictions as you may request; provided, that in
no event shall the Company be obligated to qualify to do business
in any jurisdiction where it is not now so qualified or to take
any action which would subject it to general service of process
in any jurisdiction where it is not now so subject.

(g) During the period of five years commencing on the
Effective Date, the Company will furnish to the Representatives
copies of such financial statements and other periodic and
special reports as the Company may from time to time distribute
generally to the holders of any class of its capital stock or
other securities, and will furnish to you a copy of each annual
or other report it shall be required to file with the Commission.

(h) The Company will make generally available to
holders of its securities as soon as may be practicable but in no
event later than the last day of the fifteenth full calendar
month following the calendar quarter in which the Effective Date
falls, an earnings statement (which need not be audited but shall
be in reasonable detail) for a period of 12 months ended
commencing after the Effective Date, and satisfying the
provisions of Section 11(a) of the Act (including Rule 158 of the
Rules and Regulations under the Act).

(i) Whether or not the transactions contemplated by
this Agreement are consummated or this Agreement is terminated,
the Company will pay, or reimburse if paid by the Underwriters,
all costs and expenses incident to the performance of the
obligations of the Company under this Agreement, including but
not limited to costs and expenses of or relating to (1) the
preparation, printing, and filing of the Registration Statement
and exhibits to it, each preliminary prospectus, the Prospectus
and any amendment or supplement to the Registration Statement or
the Prospectus, (2) the preparation and delivery of the Indenture
and instruments or certificates representing the Securities, (3)
the printing of this Agreement and other underwriting documents,
including Underwriter's Questionnaires, Underwriter's Powers of
Attorney, Blue Sky Memorandum, Agreement Among Underwriters and
Selected Dealer Agreements, (4) furnishing (including costs of
shipping and mailing) such copies of the Registration Statement,
the Prospectus and any preliminary prospectus, and all amendments
and supplements thereto, as may be requested for use in
connection with the offering and sale of the Securities by the
Underwriters or by dealers to whom Securities may be sold, (5)
any filings required to be made by you with the NASD, and the
fees (not to exceed $1,000), disbursements and other charges of
your counsel in connection therewith, (6) the registration or

11
<PAGE>

qualification of the Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions designated
pursuant to Section 4(f), including the fees, disbursements and
other charges of your counsel in connection therewith, and the
preparation and printing of preliminary, supplemental and final
Blue Sky memoranda, (7) counsel to the Company, (8) the Trustee
in connection with the Indenture, (9) The Depository Trust
Company, and (10) the National Association of Insurance
Commissioners in connection with any rating of the Securities.

(j) If this Agreement shall be terminated by the
Company pursuant to any of the provisions hereof (otherwise than
pursuant to Section 8) or if for any reason the Company shall be
unable to perform its obligations hereunder, the Company will
reimburse you for all out-of-pocket expenses (including the fees,
disbursements and other charges of your counsel) reasonably
incurred by them in connection herewith. If this Agreement shall
be terminated by the Underwriters based upon an Act of God or
other circumstances not involving a matter within the control of
the Company or any fault of the Company, the Company shall have
no obligation to reimburse you for any out-of-pocket expenses;
otherwise, upon termination by the Underwriter the Company will
reimburse you for up to $100,000 of out-of-pocket expenses
(including the fees, disbursements and other charges of your
counsel) reasonably incurred by you in connection herewith.

(k) The Company will not at any time, directly or
indirectly, take any action designed, or which might reasonably
be expected, to cause or result in, or which will constitute,
stabilization of the price of any security of the Company to
facilitate the sale or resale of any of the Securities.

(l) The Company will apply the net proceeds from the
offering and sale of the Securities to be sold by the Company in
the manner set forth in the Prospectus under "Use of Proceeds."

(m) During the period of 180 days commencing at the
Closing Date, the Company will not, without your prior written
consent, offer, issue, sell, contract to sell, grant any option
for the sale of, or otherwise dispose of, any debt securities of
the Company which are substantially similar to the Securities;

(n) Comply with all registrations, filings and
reporting requirements of the Exchange Act, which may from time
to time be applicable to the Company.

(o) Not insist upon, or plead (as a defense or
otherwise), or in any manner whatsoever claim, and will actively
resist any and all efforts to be compelled to take the benefit or
advantage of, usury laws, wherever enacted, now or at any time
hereafter in force, in connection with any claim, action, or
proceeding which may be brought by you in order to enforce any
right or remedy under this Agreement or which may be brought by

12
<PAGE>

any holder of the Securities or the Trustee in order to enforce
any right or remedy under the Securities or the Indenture.

(p) If at any time during the 25 day period after the
Registration Statement is declared effective, any rumor,
publication or event relating to or affecting the Company shall
occur as a result of which, in your opinion, the market price for
the Securities has been or is likely to be materially affected
(regardless of whether such rumor, publication or event
necessitates a supplement to or amendment of the Prospectus), the
Company will, after written notice from you advising it as to the
effect set forth above, prepare, consult with you concerning the
substance of and disseminate a press release or other public
statement, reasonably satisfactory to you, responding to or
commenting on such rumor, publication or event.

5. Conditions of the Obligations of the Underwriters.

The respective obligations of the Underwriters to purchase
and pay for the Securities shall be subject, in their discretion,
to the accuracy of the representations and warranties of the
Company herein as of the date here of and as of the Closing Date
as if made on and as of the Closing Date, to the accuracy of the
statements of the Company's officers made pursuant to the
provisions hereof, to the performance by the Company of all of
their covenants and agreements hereunder and to the following
additional conditions:

(a) Notification that the Registration Statement has
become effective shall be received by you not later than 5:00
p.m., Nashville, Tennessee time, on the date of this Agreement or
at such later date and time as shall be consented to in writing
by you and all filings required by Rule 424 and Rule 430A of the
Rules and Regulations shall have been made.

(b) (i) No stop order suspending the effectiveness of
the Registration Statement shall have been issued and no
proceedings for that purpose shall be pending or threatened by
the Commission, (ii) no order suspending the effectiveness of the
Registration Statement or the qualification or registration of
the Securities under the securities or Blue Sky laws of any
jurisdiction shall be in effect and no proceeding for such
purpose shall be pending before or threatened or contemplated by
the Commission or the authorities of any such jurisdiction,
(iii) any request for additional information on the part of the
staff of the Commission or any such authorities shall have been
complied with to the satisfaction of the staff of the Commission
or such authorities and to the satisfaction of the
Representatives, (iv) after the date hereof no amendment or
supplement to the Registration Statement or the Prospectus shall
have been filed unless a copy thereof was first submitted to you
and you did not object thereto in good faith, (v) the NASD, upon
review of the terms of the public offering of the Securities,
shall not have objected to such offering, such terms or the

Underwriters' participation in the same, and (vi) and you shall
have received certificates, dated the Closing Date and the Option
Closing Date and signed by the Chief Executive Officer or the
Chairman of the Board of Directors of the Company and the Chief
Financial Officer of the Company (who may, as to proceedings
threatened, rely upon the best of their information and belief),
to the effect of clauses (i), (ii) and (iii).

(c) Since the respective dates as of which information
is given in the Registration Statement and the Prospectus,
(i) there shall not have been a material adverse change, or any
development involving a prospective material adverse change, in
the general affairs, business, business prospects, properties,
management, key personnel, condition (financial or otherwise) or
results of operations of the Company and its Subsidiaries, taken
as a whole, whether or not arising from transactions in the
ordinary course of business, in each case other than as set forth
in or contemplated by the Registration Statement and the
Prospectus and (ii) neither the Company nor any of its
Subsidiaries shall have sustained any material loss or
interference with its business or properties from fire,
explosion, flood, hurricane or other casualty or calamity,
whether or not covered by insurance, or from any labor dispute or
any court or legislative or other governmental action, order or
decree, which is not set forth in the Registration Statement and
the Prospectus, if in your reasonable judgment any such
development makes it impracticable or inadvisable to consummate
the sale and delivery of the Securities by you at the public
offering price.

(d) Since the respective dates as of which information
is given in the Registration Statement and the Prospectus, there
shall have been no litigation or other proceeding instituted
against the Company or any Subsidiary or any of their respective
officers or directors in their capacities as such, before or by
any Federal, state, or local court, commission, regulatory body,
administrative agency or other governmental body, domestic or
foreign, in which litigation or proceeding an unfavorable ruling,
decision or finding would materially and adversely affect the
business, properties, business prospects, condition (financial or
otherwise) or results of operations.

(e) Each of the representations and warranties of the
Company contained herein shall be true and correct in all
material respects at the Closing Date and, with respect to the
Option Securities, at the Option Closing Date, as if made at the
Closing Date and, with respect to the Option Securities, at the
Option Closing Date, and all covenants and agreements herein
contained to be performed on the part of the Company and all
conditions herein contained to be fulfilled or complied with by
the Company at or prior to the Closing Date and, with respect to
the Option Securities, at or prior to the Option Closing Date,
shall have been duly performed, fulfilled or complied with.

<PAGE>

(f) The Underwriters shall have received an opinion,
dated the Closing Date and, with respect to the Option
Securities, the Option Closing Date, and satisfactory in form and
substance to your counsel, from Wyche, Burgess, Freeman & Parham,
P.A., counsel to the Company, to the effect that:

(i) The Company has been duly incorporated and is
an existing corporation in good standing under the laws
of the State of South Carolina, with corporate power
and authority to own its properties and conduct its
business as described in the Prospectus; and the
Company is duly registered as a bank holding company
under the BHC Act;

(ii) Carolina First Bank is a South Carolina-
chartered commercial bank, duly organized, validly
existing and in good standing under the laws of South
Carolina; CF Mortgage is a South Carolina business
corporation, duly organized, validly existing and in
good standing under the laws of South Carolina; each of
Carolina First Bank and CF Mortgage has the corporate
power and authority to own its properties and conduct
its business as described in the Prospectus; and each
of Carolina First Bank and CF Mortgage is qualified to
do business as a foreign corporation in good standing
in all other jurisdictions in which it owns or leases
substantial properties or in which the conduct of its
business requires such qualifications;

(iii) All the outstanding shares of capital stock
of each Subsidiary have been duly and validly
authorized and issued and are fully paid and (except as
provided in 12 U.S.C. (section mark) 55, as amended)
nonassessable, and, except as otherwise set forth in the
Prospectus, all outstanding shares of capital stock of the
Subsidiaries (except directors' qualifying shares) are
owned by the Company free and clear of any perfected
security interest and, to the knowledge of such
counsel, after due inquiry, any other security
interests, claims, liens or encumbrances;

(iv) The Securities delivered on such Closing
Date have been duly authorized, and when the Securities
have been executed and authenticated in the manner set
forth in the Indenture and issued and delivered against
payment therefor, the Securities will constitute valid
and legally binding obligations of the Company
enforceable in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors'
rights and to general equity principles;

15
<PAGE>

(v) The Securities have been duly authorized and
validly issued, and the Securities and the Indenture
conform to the description thereof contained in the
Prospectus; and the shareholders of the Company have no
preemptive or similar rights with respect to the
Securities;

(vi) There are no contracts, agreements or
understandings known to such counsel between the
Company and any person granting such person the right
to require the Company to file a registration statement
under the Act with respect to any securities of the
Company owned or to be owned by such person or to
require the Company to include such securities in the
securities registered pursuant to the Registration
Statement or in any securities being registered
pursuant to any other registration statement filed by
the Company under the Act;

(vii) No consent, approval, authorization or
order of, or filing with, any governmental agency or
body or any court is required for the execution,
delivery or performance by the Company of this
Agreement or the Indenture, or for the issuance or sale
of the Securities or the consummation of the other
transactions contemplated by this Agreement or the
Indenture, except such as have been obtained and made
under the Act, the TIA, and the Exchange Act and such
as may be required under state securities laws;

(viii) The execution, delivery and performance of
this Agreement, the Indenture and the consummation of
the transactions herein and therein contemplated,
including the issuance and sale of the Securities and
compliance with the provisions thereof, will not result
in a breach or violation of any of the terms or
provisions if, or constitute a default under, (A) any
statute, rule, regulation or, to the knowledge of such
counsel after reasonable investigation, order of any
governmental agency or body or any court having
jurisdiction over the Company or Subsidiaries of the
Company or any of their properties, or (B) any material
obligation, agreement, covenant or condition contained
in any agreement or instrument to the knowledge of such
counsel after reasonable investigation to which the
Company or the Subsidiaries is a party or by which the
Company or the Subsidiaries is bound or to which any of
the properties of the Company or the Subsidiaries is
subject, or (C) the respective Articles of
Incorporation, as amended, of the Company, the Bylaws
of the Company or the Charters, Articles of
Incorporation or Bylaws of any of the Subsidiaries; and
the Company has full power and authority to authorize,

16
<PAGE>

issue and sell the Securities as contemplated by this
Agreement;

(ix) The Registration Statement was declared
effective under the Act as of the date and time
specified in such opinion, the Prospectus either was
filed with the Commission pursuant to the subparagraph
of rule 424(b) specified in such opinion on the date
specified therein or was included in the Registration
Statement (as the case may be), and, to the best of the
knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement or any part
thereof has been issued and no proceedings for that
purpose have been instituted or are pending or
contemplated under the Act; the Registration Statement
and the Prospectus, and each amendment or supplement
thereto, as of their respective effective or issue
dates, complied as to form in all material respects
with the requirements of the Act, the Exchange Act, and
the Rules and Regulations; such counsel have no reason
to believe that the Registration Statement, or any
amendment thereto, as of its effective date, contained
any untrue statement of a material fact or omitted to
state any material fact required to be stated therein
or necessary to make the statements therein not
misleading, or that the Prospectus, or any supplement
thereto, as of its issue date, included any untrue
statement of a material fact or omitted to state any
material fact necessary in order to make the statements
therein, in light of the circumstances under which they
were made, not misleading; the descriptions in the
Registration Statement and Prospectus of statutes,
legal and governmental proceedings and contracts and
other documents are accurate in all material respects
and fairly present the information required to be
shown; and such counsel does not know of any pending or
threatened legal or governmental proceedings, statutes
or regulations required to be described in the
prospectus which are not described as required nor of
any contracts or documents of a character required to
be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the
Registration Statement which are not described and
filed as required; it being understood that such
counsel need express no opinion as to the financial
statements or other financial data contained in the
Registration Statement or the Prospectus or as to the
section of the Prospectus entitled "Underwriting";

(x) Each of this Agreement and the Indenture has
been duly authorized, executed and delivered by the
Company and constitutes a valid and legally binding
obligation of the Company enforceable in accordance
with its terms, except (A) as such enforceability may

17
<PAGE>

be limited by bankruptcy, insolvency, reorganization,
fraudulent conveyance or similar laws now or hereafter
in effect relating to creditors' rights or debtors'
obligations generally; (B) that the remedies of
specific performance and injunctive and other forms of
relief are subject to general equitable principles,
whether enforcement is sought at law or in equity, and
that such enforcement may be subject to the discretion
of the court before which any proceedings therefor may
be brought; and (C) as rights to indemnity and
contribution may be limited by state or Federal laws
relating to securities or the policies underlying such
laws; and

(xi) To the best of such counsel's knowledge, the
conditions for use of Form S-3 have been satisfied with
respect to the Registration Statement.

In rendering such opinion, such counsel may rely as to matters of
fact to the extent deemed proper, on certificates of responsible
officers of the Company and its subsidiaries and public
officials.

(g) You shall have received an opinion, dated the
Closing Date and the Option Closing Date, from Nelson Mullins
Riley & Scarborough, L.L.P., as your counsel, with respect to the
Registration Statement, the Prospectus and this Agreement, which
opinion shall be satisfactory in all respects to you, and the
Company shall have furnished to such counsel such documents as
they request for the purpose of enabling them to pass upon such
matters.

(h) Concurrently with the execution and delivery of
this Agreement, the Accountants shall have furnished to you a
letter, dated the date of its delivery, addressed to you and in
form and substance satisfactory to you, confirming that they are
independent accountants with respect to the Company as required
by the Act and the Rules and Regulations and stating (i) with
respect to the financial and other statistical and numerical
information contained in the Registration Statement or
incorporated by reference therein, that they read such
information, compared it to the Company's general accounting
records, schedules prepared by the Company, the financial
statements included or incorporated by reference in the
Registration Statement or tables appearing in the Registration
Statement and found such information to be in agreement with the
source documents; (ii) in their opinion, the financial statements
examined by them of the Company at all dates and for all periods
referred to in their opinion and included or incorporated by
reference in the Registration Statement or the Prospectus, comply
in all material respects with the applicable accounting
requirements of the Act, the TIA, the Exchange Act and the
published Rules and Regulations thereunder with respect to
registration statements on Form S-3; and (iii) on the basis of

18
<PAGE>

certain indicated procedures (but not an examination in
accordance with generally accepted accounting principles),
including examinations of the instruments of the Company set
forth in the Prospectus, a reading of the latest available
interim unaudited financial statements of the Company, whether or
not appearing in the Prospectus, inquiries of the officers of the
Company or other persons responsible for its financial and
accounting matters regarding the specific items for which
representations are requested below and a reading of the minute
books of the Company, nothing has come to their attention which
would cause them to believe that during the period from the last
audited balance sheet included in the Registration Statement to a
specified date not more than two days prior to the date of such
letter (A) there has been any change in the capital stock or
other securities of the Company or any payment or declaration of
any dividend or other distribution in respect thereof or exchange
therefor from that shown on its audited balance sheets (except
dividends on the Common Stock paid on ______________, 1995 and
declared and payable on ______________, 1995) or in the debt of
the Company from that shown in the Registration Statement or
Prospectus other than as set forth in or contemplated by the
Registration Statement or Prospectus; (B) there have been any
material decreases in net current assets or net assets as
compared with amounts shown in the last audited balance sheet
included or incorporated by reference in the Prospectus so as to
make said financial statements misleading; and (C) on the basis
of the indicated procedures and discussions referred to in clause
(iii), nothing has come to their attention which, in their
judgment, would cause them to believe or indicate that the
unaudited financial statements and schedules, whether or not
appearing in the Registration Statement and Prospectus, do not
present fairly the financial position and results of the Company,
for the periods indicated, in conformity with the generally
accepted accounting principles applied on a consistent basis with
the audited financial statements. At the Closing Date and, as to
the Option Securities, the Option Closing Date, the Accountants
shall have furnished to you a letter, dated the date of its
delivery, which shall confirm, on the basis of a review in
accordance with the procedures set forth in the letter from the
Accountants, that nothing has come to their attention during the
period from the date of the letter referred to in the prior
sentence to a date (specified in the letter) not more than two
days prior to the Closing Date and the Option Closing Date that
would require any change in their letter dated the date hereof if
it were required to be dated and delivered at the Closing Date
and the Option Closing Date.

(i) Concurrently with the execution and delivery of
this Agreement, KPMG Peat Marwick LLP shall have furnished to you
a letter, dated the date of its delivery, addressed to you and in
form and substance satisfactory to you, confirming that they are
independent accountants with respect to the Company under the Act
and the Rules and Regulations and stating (i) with respect to the
financial and other statistical and numerical information

19
<PAGE>

contained in the Registration Statement or incorporated by
reference therein, that they read such information, compared it
to the Company's general accounting records, schedules prepared
by the Company, the financial statements included or incorporated
by reference in the Registration Statement or tables appearing in
the Registration Statement and found such information to be in
agreement with the source documents; (ii) in their opinion, the
financial statements of the Company at all dates and for all
periods referred to in their opinion and included or incorporated
by reference in the Registration Statement or the Prospectus,
comply in all material respects with the applicable accounting
requirements of the Act and the published Rules and Regulations
thereunder with respect to registration statements on Form S-3;
and (iii) on the basis of certain indicated procedures (but not
an examination in accordance with generally accepted accounting
principles), including examinations of the instruments of the
Company set forth in the Prospectus, a reading of the latest
available interim unaudited financial statements of the Company,
whether or not appearing in the Prospectus, inquiries of the
officers of the Company or other persons responsible for its
financial and accounting matters regarding the specific items for
which representations are requested below and a reading of the
minute books of the Company, nothing has come to their attention
which would cause them to believe that during the period from the
last audited balance sheet included in the Registration Statement
to a specified date not more than two days prior to the date of
such letter (A) there has been any change in the capital stock or
other securities of the Company or any payment or declaration of
any dividend or other distribution in respect thereof or exchange
therefor from that shown on its audited balance sheets (except
dividends on the Common Stock paid on _________________, 1995 and
declared and payable on _______________, 1995) or in the debt of
the Company from that shown in the Registration Statement or
Prospectus other than as set forth in or contemplated by the
Registration Statement or Prospectus; (B) there have been any
material decreases in net current assets or net assets as
compared with amounts shown in the last audited balance sheet
included in the Prospectus so as to make said financial
statements misleading; and (C) on the basis of the indicated
procedures and discussions referred to in clause (iii), nothing
has come to their attention which, in their judgment, would cause
them to believe or indicate that the unaudited financial
statements and schedules, whether or not appearing in the
Registration Statement and Prospectus, do not present fairly the
financial position and results of the Company, for the periods
indicated, in conformity with the generally accepted accounting
principles applied on a consistent basis with the audited
financial statements. At the Closing Date and, as to the Option
Securities, the Option Closing Date, KPMG Peat Marwick LLP shall
have furnished to you a letter, dated the date of its delivery,
which shall confirm, on the basis of a review in accordance with
the procedures set forth in the letter from KPMG Peat Marwick
LLP, that nothing has come to their attention during the period
from the date of the letter referred to in the prior sentence to

20
<PAGE>

a date (specified in the letter) not more than two days prior to
the Closing Date and the Option Closing Date that would require
any change in their letter dated the date hereof if it were
required to be dated and delivered at the Closing Date and the
Option Closing Date.

(j) Concurrently with the execution and delivery of
this Agreement and at the Closing Date and, as to the Option
Securities, the Option Closing Date, there shall be furnished to
you an accurate certificate, dated the date of its delivery,
signed by each of the Chief Executive Officer and Chief Financial
Officer of the Company, in form and substance satisfactory to
you, to the effect that:

(i) Each signer of such certificate has carefully
examined the Registration Statement and the Prospectus
(including any documents filed under the Exchange Act
and deemed to be incorporated by reference into the
Prospectus) and (A) as of the date of such certificate,
such documents are true and correct in all material
respects, do not include any untrue statement of
material fact, and do not omit to state a material fact
required to be stated therein or necessary in order to
make the statements therein not untrue or misleading
and (B) in the case of the certificate delivered at the
Closing Date and the Option Closing Date, since the
Effective Date no event has occurred as a result of
which it is necessary to amend or supplement the
Prospectus in order to make the statements therein not
untrue or misleading in any material respect and there
has been no document required to be filed under the
Exchange Act and the Rules and Regulations that upon
such filing would be deemed to be incorporated by
reference into the Prospectus that has not been so
filed;

(ii) Each of the representations and warranties
of the Company contained in this Agreement were, when
originally made, and are, at the time such certificate
is delivered, true and correct in all material
respects;

(iii) Each of the covenants required herein to be
performed by the Company on or prior to the delivery of
such certificate has been duly, timely and fully
performed and each condition herein required to be
complied with by the Company on or prior to the date of
such certificate has been duly, timely and fully
complied with.

(k) The Indenture shall have been duly executed and
delivered by the parties thereto.

21
<PAGE>

(l) The Securities shall be qualified for sale in such
states as you may reasonably request, each such qualification
shall be in effect and not subject to any stop order or other
proceeding on the Closing Date and the Option Closing Date.

(m) No Underwriter shall have advised the Company that
the Registration Statement, any preliminary Prospectus, the
Prospectus, or any amendment or any supplement thereto, contains
an untrue statement of fact which, in your reasonable judgment,
is material, or omits to state a fact which, in your judgment, is
material and is required to be stated therein or necessary to
make the statements therein not misleading and the Company shall
not have cured such untrue statement of fact or stated a
statement of fact required to be stated therein.

(n) The Company shall have furnished to you such
certificates, in addition to those specifically mentioned herein,
as you may have reasonably requested as to the accuracy and
completeness at the Closing Date and the Option Closing Date of
any statement in the Registration Statement or the Prospectus or
any documents filed under the Exchange Act and deemed to be
incorporated by reference into the Prospectus, as to the accuracy
at the Closing Date and the Option Closing Date of the
representations and warranties of the Company herein, as to the
performance by the Company of its obligations hereunder, or as to
the fulfillment of the conditions concurrent and precedent to
your obligations hereunder.

6. Indemnification.

(a) The Company will indemnify and hold harmless each
Underwriter, the directors, officers, employees and agents of
each Underwriter and each person, if any, who controls each
Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, from and against any and all
losses, claims, liabilities, expenses and damages (including any
and all investigative, legal and other expenses reasonably
incurred in connection with,and any amount paid in settlement of,
any action, suit or proceeding or any claim asserted), to which
they, or any of them, may become subject under the Act, the
Exchange Act, the TIA or other Federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses,
claims, liabilities, expenses or damages arise out of or are
based in whole or in part upon (i) any inaccuracy in the
representations and warranties of the Company contained herein,
(ii) any failure of the Company to perform its obligations
hereunder or under the Indenture or under law or (iii) any untrue
statement or alleged untrue statement of a material fact
contained in any preliminary prospectus, the Registration
Statement or the Prospectus or any amendment or supplement to the
Registration Statement or the Prospectus or in any documents
filed under the Exchange Act and deemed to be incorporated by
reference into the Prospectus or any blue sky application or
filing, or the omission or alleged omission to state in such

22
<PAGE>

document a material fact required to be stated in it or necessary
to make the statements in it not misleading; provided, that the
Company will not be liable to the extent that such loss, claim,
liability, expense or damage arises from the sale of the
Securities in the public offering to any person by an Underwriter
and is based on an untrue statement or omission or alleged untrue
statement or omission made in reliance on and in conformity with
information relating to an Underwriter furnished in writing to
the Company by an Underwriter expressly for inclusion in the
Registration Statement, any preliminary prospectus or the
Prospectus. The Company acknowledges that the statements set
forth under the heading "Underwriting" in any preliminary
prospectus and the Prospectus constitute the only information
relating to any Underwriter furnished in writing to the Company
by you expressly for inclusion in the Registration Statement, any
preliminary prospectus or the Prospectus. This indemnity
agreement will be in addition to any liability that the Company
might otherwise have.

(b) Each Underwriter will indemnify and hold harmless
the Company, each person, if any, who controls the Company within
the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, each director of the Company and each officer of
the Company who signs the Registration Statement to the same
extent as the foregoing indemnity from the Company to the
Underwriters, but only insofar as losses, claims, liabilities,
expenses or damages arise out of or are based on any untrue
statement or omission or alleged untrue statement or omission
made in reliance on and in conformity with information relating
to you furnished in writing to the Company by you expressly for
use in the Registration Statement, any preliminary prospectus or
the Prospectus. The Company acknowledges that the statements set
forth under the heading "Underwriting" in any preliminary
prospectus and the Prospectus constitute the only information
relating to the Underwriters furnished in writing to the Company
by the Underwriters expressly for inclusion in the Registration
Statement, any preliminary prospectus or the Prospectus. This
indemnity will be in addition to any liability that the
Underwriters might otherwise have.

(c) Any party that proposes to assert the right to be
indemnified under this Section 6 will, promptly after receipt of
notice of commencement of any action against such party in
respect of which a claim is to be made against an indemnifying
party or parties under this Section 6, notify each such
indemnifying party of the commencement of such action, enclosing
a copy of all papers served, but the omission so to notify such
indemnifying party will not relieve it from any liability that it
may have to any indemnified party under the foregoing provisions
of this Section 6 unless, and only to the extent that, such
omission results in the forfeiture of substantive rights or
defenses by the indemnifying party. If any such action is
brought against any indemnified party and it notifies the
indemnifying party of its commencement, the indemnifying party

23
<PAGE>

will be entitled to participate in and, to the extent that it
elects by delivering written notice to the indemnified party
promptly after receiving notice of the commencement of the action
from the indemnified party, jointly with any other indemnifying
party similarly notified, to assume the defense of the action,
with counsel reasonably satisfactory to the indemnified party,
and after notice from the indemnifying party to the indemnified
party of its election to assume the defense, the indemnifying
party will not be liable to the indemnified party for any legal
or other expenses except as provided below and except for the
reasonable costs of investigation subsequently incurred by the
indemnified party in connection with the defense. The
indemnified party will have the right to employ its own counsel
in any such action, but the fees, expenses and other charges of
such counsel will be at the expense of such indemnified party
unless (1) the employment of counsel by the indemnified party has
been authorized in writing by the indemnifying party, (2) the
indemnified party has reasonably concluded (based on advice of
counsel) that there may be legal defenses available to it or
other indemnified parties that are different from or in addition
to those available to the indemnifying party, (3) a conflict or
potential conflict exists (based on advice of counsel to the
indemnified party) between the indemnified party and the
indemnifying party (in which case the indemnifying party will not
have the right to direct the defense of such action on behalf of
the indemnified party) or (4) the indemnifying party has not in
fact employed counsel to assume the defense of such action within
a reasonable time after receiving notice of the commencement of
the action, in each of which cases the reasonable fees,
disbursements and other charges of counsel will be at the expense
of the indemnifying party or parties. It is understood that the
indemnifying party or parties shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be
liable for the reasonable fees, disbursements and other charges
of more than one separate firm admitted to practice in such
jurisdiction at any one time for all such indemnified party or
parties. All such fees, disbursements and other charges will be
reimbursed by the indemnifying party promptly as they are
incurred. An indemnifying party will not be liable for any
settlement of any action or claim effected without its written
consent (which consent will not be unreasonably withheld).

(d) In order to provide for just and equitable
contribution in circumstances in which the indemnification
provided for in the foregoing paragraphs of this Section 6 is
applicable in accordance with its terms but for any reason is
held to be unavailable from the Company or the Underwriters, the
Company and the Underwriters will contribute to the total losses,
claims, liabilities, expenses and damages (including any
investigative, legal and other expenses reasonably incurred in
connection with, and any amount paid in settlement of, any
action, suit or proceeding or any claim asserted, but after
deducting any contribution received by the Company from persons
other than the Underwriters, such as persons who control the

24
<PAGE>

Company within the meaning of the Act, officers of the Company
who signed the Registration Statement and directors of the
Company, who may be liable for contribution) to which the Company
and the Underwriters may be subject in such proportion as shall
be appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriters on the other. The
relative benefits received by the Company on the one hand and the
Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover
page of the Prospectus. If, but only if, the allocation provided
by the foregoing sentence is not permitted by applicable law, the
allocation of contribution shall be made in such proportion as is
appropriate to reflect not only the relative benefits referred to
in the foregoing sentence but also the relative fault of the
Company, on the one hand, and the Underwriters, on the other,
with respect to the statements or omissions which resulted in
such loss, claim, liability, expense or damage, or action in
respect thereof, as well as any other relevant equitable
considerations with respect to such offering. Such relative fault
shall be determined by reference to whether the untrue or alleged
untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied
by the Company or the Underwriters, the intent of the parties and
their relative knowledge, access to information and opportunity
to correct or prevent such statement or omission. The Company
and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this Section 6(d) were to
be determined by pro rata allocation (even if the Underwriters
were treated as one entity for such purpose) or by any other
method of allocation which does not take into account the
equitable considerations referred to herein. The amount paid or
payable by an indemnified party as a result of the loss, claim,
liability, expense or damage, or action in respect thereof,
referred to above in this Section 6(d) shall be deemed to
include, for purpose of this Section 6(d), any legal or other
expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or
claim. Notwithstanding the provisions of this Section 6(d), an
Underwriter shall not be required to contribute any amount in
excess of the underwriting discounts received by it, and no
person found guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) will be entitled to
contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to
contribute as provided in this Section 6(d) are several in
proportion to their respective underwriting obligations and not
joint. For purposes of this Section 6(d), any person who controls
a party to this Agreement within the meaning of the Act will have
the same rights to contribution as that party, and each officer
of the Company who signed the Registration Statement will have
the same rights to contribution as the Company, subject in each

25
<PAGE>

case to the provisions hereof. Any party entitled to
contribution, promptly after receipt of notice of commencement of
any action against such party in respect of which a claim for
contribution maybe made under this Section 6(d), will notify any
such party or parties from whom contribution may be sought, but
the omission to notify will not relieve the party or parties from
whom contribution may be sought from any other obligation it or
they may have under this Section 6(d). No party will be liable
for contribution with respect to any action or claim settled
without its written consent (which consent will not be
unreasonably withheld).

(e) The indemnity and contribution agreements
contained in this Section 6 and the representations and
warranties of the Company contained in this Agreement shall
remain operative and in full force and effect regardless of (i)
any investigation made by the Underwriters or on their behalf,
(ii) acceptance of any of the Securities and payment therefor or
(iii) any termination of this Agreement.

7. Termination.

The Underwriters' obligations under this Agreement may be
terminated at any time on or prior to the Closing Date (or, with
respect to the Option Securities, on or prior to the Option
Closing Date), by notice to the Company from the Representatives,
without liability on the part of any of the Underwriters to the
Company, if, prior to delivery and payment for the Securities (or
the Option Securities, as the case may be), in your sole
judgment, (i) trading in any of the equity securities of the
Company shall have been suspended by the Commission, by an
exchange that lists such equity securities or by the Nasdaq
System, (ii) trading in securities generally on the New York
Stock Exchange, the American Stock Exchange or the over-the-
counter market shall have been suspended or limited or minimum or
maximum prices shall have been generally established on such
exchange, or additional material governmental restrictions, not
in force on the date of this Agreement, shall have been imposed
upon trading in securities generally by such exchange or by order
of the Commission or any court of other governmental authority,
(iii) a general banking moratorium shall have been declared by
either Federal or State authorities, or (iv) any material adverse
change in the financial or securities markets in the United
States or in political, financial or economic conditions in the
United States or any outbreak or material escalation of
hostilities or declaration by the United States of a national
emergency or war or other calamity or crisis shall have occurred
the effect of any of which is such as to make it, in your sole
judgment, impracticable or inadvisable to market the Securities
on the terms and in the manner contemplated by the Prospectus.

8. Substitution of Underwriters.

26
<PAGE>

If any Underwriter shall fail or refuse to purchase any of
the Firm Securities which it has agreed to purchase hereunder,
and the aggregate principal amount of Firm Securities which such
defaulting Underwriter agreed but failed or refused to purchase
is not more than one-tenth of the aggregate principal amount of
Firm Securities, the other Underwriters shall be obligated,
severally, to purchase the Firm Securities that such defaulting
Underwriter agreed but failed or refused to purchase, in the
proportions which the principal amount of Firm Securities which
they have respectively agreed to purchase pursuant to Section 1
bears to the aggregate principal amount of Firm Securities which
all such non-defaulting Underwriters have so agreed to purchase,
or in such other proportions as you may specify; provided, that
in no event shall the maximum principal amount of Firm Securities
which an Underwriter has been obligated to purchase pursuant to
Section 1 be increased pursuant to this Section 8 by more than
one-ninth of such principal amount of Firm Securities without the
prior written consent of such Underwriter. If an Underwriter
shall fall or refuse to purchase any Firm Securities and the
aggregate principal amount of Firm Securities which such
defaulting Underwriter agreed but failed or refused to purchase
exceeds one-tenth of the aggregate principal amount of the Firm
Securities and arrangements satisfactory to the non-defaulting
Underwriters or the Company for the purchase of such Firm
Securities are not made within 48 hours after such default, this
Agreement will terminate without liability on the part of any
non-defaulting Underwriter or the Company for the purchase or
sale of any Securities under this Agreement. In any such case
the Representatives or the Company shall have the right to
postpone the Closing Date, but in no event for longer than seven
days, in order that the required changes, if any, in the
Registration Statement and in the Prospectus or in any other
documents or arrangements may be effected. Any action taken
pursuant to this Section 8 shall not relieve any defaulting
Underwriter from liability in respect to any default of such
Underwriter under this Agreement.

9. Miscellaneous.

Notice given pursuant to any of the provisions of this
Agreement shall be in writing and, unless otherwise specified,
shall be mailed or delivered (a) if to the Company, at the office
of the Company, 102 South Main Street, Greenville, South Carolina
29601, Attention: Mack I. Whittle, Jr., or (b) if to you at the
offices of J.C. Bradford & Co., J.C. Bradford Financial Center,
330 Commerce Street, Nashville, Tennessee 37201, Attention:
James H. Graves. Any such notice shall be effective only upon
receipt. Any notice under Section 7 or 8 may be made by telex or
telephone, but if so made shall be subsequently confirmed in
writing.

This Agreement has been and is made solely for the benefit
of the several Underwriters, the Company and the controlling
persons, directors and officers referred to in Section 6, and

27
<PAGE>

their respective successors and assigns, and no other person
shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" as used in this
Agreement shall not include a purchaser, as such purchaser, of
Securities from an Underwriter.

This Agreement shall be governed by and construed in
accordance with the laws of the State of Tennessee.

This Agreement may be signed in two or more counterparts
with the same effect as if the signatures thereto and hereto were
upon the same instrument.

In case any provision in this Agreement shall be invalid,
illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way
be affected or impaired thereby.

The Company and you each hereby irrevocably waive any right
they may have to a trial by jury in respect of any claim based
upon or arising out of this Agreement or the transactions
contemplated hereby.

You hereby represent and warrant to the Company that you
have authority to act hereunder on behalf of the several
Underwriters, and any action hereunder taken by you will be
binding upon all the Underwriters.

28
<PAGE>

Please confirm that the foregoing correctly sets forth the
agreement among the Company and you.

Very truly yours,

CAROLINA FIRST CORPORATION

By:

Title:

Confirmed and accepted as of the
date first above written.

J. C. BRADFORD & CO.
INTERSTATE/JOHNSON LANE CORPORATION
MORGAN KEEGAN & COMPANY, INC.
For themselves and as Representatives
of the several Underwriters

By: J.C. Bradford & Co.

By: _________________________________
Partner

29
<PAGE>

SCHEDULE I

Name

J.C. Bradford & Co. . . . . . . . . . . . . . . . . $
Interstate/Johnson Lane Corporation . . . . . . . .
Morgan Keegan & Company, Inc. . . . . . . . . . . .

<PAGE>

EXHIBIT 4.11

CAROLINA FIRST CORPORATION
TO
FIRST AMERICAN NATIONAL BANK,
Trustee

_______________

Indenture

Dated as of April 1, 1995
_______________

Providing for the issuance of
subordinated debt securities in series

<PAGE>

Carolina First Corporation

Reconciliation and tie between Trust Indenture Act of 1939 and
Indenture dated as of April 1, 1995

Trust Indenture Indenture
Act Section Section
<S> <C>
Section 310(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 609
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 609
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 608, 610
Section 311(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 613
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 613
Section 312(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 701, 702(a)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 702(b)
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 702(c)
Section 313(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 703(a)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 703(b)
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 703(a), 703(b)
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 703(c)
Section 314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 704
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
Section 315(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 601(a)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 602
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 601(b)
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 601(c)
(d)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 601(a)(1)
(d)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 601(c)(2)
(d)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 601(c)(3)
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 514
Section 316(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 502, 512
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 513
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 508
Section 317(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 503
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 504
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1003
Section 318(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107

_______________
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be
a part of the Indenture.

</TABLE>

<PAGE>

TABLE OF CONTENTS
Page
<S> <C>

Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Recitals of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

ARTICLE ONE
Definitions and Other Provisions of General Application

Section 101 Definitions: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Additional Senior Obligations . . . . . . . . . . . . . . . . . . . . . . . . . 2
Affiliate; control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Authenticating Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Board Resolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Book-Entry Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Company Request; Company Order . . . . . . . . . . . . . . . . . . . . . . . . . 2
Corporate Trust Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Defaulted Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Depositary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Holder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Interest Payment Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Officers' Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Original Issue Discount Security . . . . . . . . . . . . . . . . . . . . . . . . 3
Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Place of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Predecessor Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Primary Federal Regulator . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Principal Subsidiary Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Ranking Junior to the Securities . . . . . . . . . . . . . . . . . . . . . . . . 5
Ranking on a Parity with the Securities . . . . . . . . . . . . . . . . . . . . 5
Redemption Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Regular Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Responsible Officer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Security Register; Security Registrar;
Co-Security Registrar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Special Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Stated Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Vice President . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Voting Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 102 Compliance Certificates and Opinions . . . . . . . . . . . . . . . . . . . . . . . 6
Section 103 Form of Documents Delivered to Trustee . . . . . . . . . . . . . . . . . . . . . . 7
Section 104 Acts of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 105 Notices, Etc., to Trustee and Company . . . . . . . . . . . . . . . . . . . . . . . 8
Section 106 Notice to Holders; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 107 Conflict With Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 108 Effect of Headings and Table of Contents . . . . . . . . . . . . . . . . . . . . . 9
Section 109 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 110 Separability Clause . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 111 Benefits of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 112 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 113 Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

ARTICLE TWO
Security Forms

Section 201 Forms Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 202 Form of Face of Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 203 Form of Reverse of Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

_______________
NOTE: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.

<PAGE>
Page

Section 204 Form of Trustee's Certificate of
Authentication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 205 Issuance of Book-Entry Securities . . . . . . . . . . . . . . . . . . . . . . . . . 15

ARTICLE THREE
The Securities

Section 301 Amount Unlimited; Issuable in Series . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 302 Denominations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 303 Execution, Authentication, Delivery and
Dating . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 304 Temporary Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 305 Registration, Registration of Transfer
and Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 306 Mutilated, Destroyed, Lost and Stolen
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 307 Payment of Interest; Interest Rights
Preserved . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 308 Persons Deemed Owners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 309 Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 310 Computation of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 311 Regarding Beneficial Ownership Interests in
Book-Entry Securities . . . . . . . . . . . . . . . . . . . . . . . . . . 22

ARTICLE FOUR
Satisfaction and Discharge

Section 401 Satisfaction and Discharge of Indenture . . . . . . . . . . . . . . . . . . . . . . 23
Section 402 Application of Trust Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

ARTICLE FIVE
Remedies

Section 501 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 502 Acceleration of Maturity, Rescission and
Annulment Other Events of Default,
Appointment of Observers . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 503 Collection of Indebtedness and Suits for
Enforcement by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 504 Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 505 Trustee May Enforce Claims
Without Possession of Securities . . . . . . . . . . . . . . . . . . . . 27
Section 506 Application of Money Collected . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 507 Limitation on Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 508 Unconditional Right of Holders to
Receive Principal, Premium and Interest . . . . . . . . . . . . . . . . . 28
Section 509 Restoration of Rights and Remedies . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 510 Rights and Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 511 Delay or Omission Not Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 512 Control by Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 513 Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 514 Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 515 Waiver of Stay or Extension Laws . . . . . . . . . . . . . . . . . . . . . . . . . . 29

ARTICLE SIX
The Trustee

Section 601 Certain Duties and Responsibilities . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 602 Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 603 Certain Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 604 Not Responsible for Recitals or Issuance
of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 605 May Hold Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 606 Money Held in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 607 Compensation and Reimbursement . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 608 Disqualification; Conflicting Interests . . . . . . . . . . . . . . . . . . . . . . 33
Section 609 Corporate Trustee Required; Eligibility . . . . . . . . . . . . . . . . . . . . . . 33
Section 610 Resignation and Removal; Appointment
of Successor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 611 Acceptance of Appointment by Successor . . . . . . . . . . . . . . . . . . . . . . . 35
Section 612 Merger, Conversion, Consolidation or
Succession to Business . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 613 Preferential Collection of Claims
Against Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 614 Appointment of Authenticating Agent . . . . . . . . . . . . . . . . . . . . . . . . 36

ARTICLE SEVEN
Lists of Holders and Reports by Trustee and Company

Section 701 Company to Furnish Trustee Names and
Addresses of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . 38

<PAGE>

Section 702 Preservation of Information; Communications
to Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 703 Reports by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 704 Reports by Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease

Section 801 Company May Consolidate, Etc., Only on
Certain Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 802 Successor Corporation Substituted . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 803 Assumption by Subsidiary of Company's
Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

ARTICLE NINE
Supplemental Indentures

Section 901 Supplemental Indentures Without Consent
of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 902 Supplemental Indentures With Consent of
Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 903 Execution of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 904 Effect of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 905 Conformity With Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 906 Reference in Securities to Supplemental
Indentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

ARTICLE TEN
Covenants

Section 1001 Payment of Principal, Premium and Interest . . . . . . . . . . . . . . . . . . . . 43
Section 1002 Maintenance of Office or Agency . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 1003 Money for Securities Payments to be Held
in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 1004 Corporate Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 1005 Statements as to Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 1006 Waiver of Certain Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

ARTICLE ELEVEN
Redemption of Securities

Section 1101 Applicability of Article . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 1102 Election to Redeem; Notice to Trustee . . . . . . . . . . . . . . . . . . . . . . . 46
Section 1103 Selection by Trustee of Securities to be
Redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 1104 Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 1105 Deposit of Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 1106 Securities Payable on Redemption Date . . . . . . . . . . . . . . . . . . . . . . . 47
Section 1107 Securities Redeemed in Part . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

ARTICLE TWELVE
Sinking Funds

Section 1201 Applicability of Article . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 1202 Satisfaction of Sinking Fund Payments
With Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 1203 Redemption of Securities for Sinking Fund . . . . . . . . . . . . . . . . . . . . . 48

ARTICLE THIRTEEN
Subordination of Securities

Section 1301 Agreement to Subordinate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 1302 Obligation of the Company Unconditional . . . . . . . . . . . . . . . . . . . . . . 50
Section 1303 Notice to Trustee of Facts Prohibiting
Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 1304 Application by Trustee of Moneys Deposited
with It . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 1305 Subrogation to Rights of Holders of Senior
Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 1306 Subordination Rights Not Impaired by Acts or
Omissions of Company, Holders of Senior
Indebtedness or Holders of Additional Senior
Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 1307 Authorization of Trustee to Effectuate
Subordination of Securities . . . . . . . . . . . . . . . . . . . . . . . 52
Section 1308 Right of Trustee to Hold Senior Indebtedness
or Additional Senior Obligations . . . . . . . . . . . . . . . . . . . . 52
Section 1309 Article Thirteen Not to Prevent Events of
Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 1310 Article Applicable to Paying Agents . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 1311 Reliance on Judicial Order or Certificate
of Liquidating Agent . . . . . . . . . . . . . . . . . . . . . . . . . . 53

<PAGE>

Section 1312 Trustee Not Fiduciary for Holders of Senior
Indebtedness or Holders of Additional Senior
Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 1313 Payment Permitted If No Default . . . . . . . . . . . . . . . . . . . . . . . . . . 53

ARTICLE FOURTEEN
Holders' Meetings

Section 1401 Purposes for Which Meeting May be Called . . . . . . . . . . . . . . . . . . . . . 53
Section 1402 Manner of Calling Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 1403 Call of Meetings by Company or Holders . . . . . . . . . . . . . . . . . . . . . . 54
Section 1404 Who May Attend and Vote at Meetings . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 1405 Regulations May be Made by Trustee . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 1406 Evidence of Actions by Holders . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 1407 Exercise of Rights of Trustee and Holders
Not to be Hindered or Delayed . . . . . . . . . . . . . . . . . . . . . . 55
</TABLE>
<PAGE>

INDENTURE, dated as of April 1, 1995, between Carolina First
Corporation, a corporation duly organized and existing under the laws of the
State of South Carolina (herein called the "Company"), having its principal
office at 102 South Main Street, Greenville, South Carolina 29601, and First
American National Bank, a national banking association duly organized and
existing under the laws of the United States of America, as Trustee (herein
called the "Trustee").

RECITALS OF THE COMPANY

The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
subordinated debentures, notes or other evidences of indebtedness (herein
called the "Securities"), to be issued in one or more series as in this
Indenture provided.

All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for
the equal and proportionate benefit of all Holders of the Securities or of
series thereof, as follows:

ARTICLE ONE

DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

SECTION 101. Definitions.

For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:

(1) the terms defined in this Article have the meanings assigned
to them in this Article and include the plural as well as the singular;

(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;

(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles and, except as otherwise herein expressly
provided, the term "generally accepted accounting principles" with
respect to any computation required or permitted hereunder shall mean
such accounting principles as are generally accepted at the date of such
computation; and

(4) the words "herein", "hereof", and "hereunder" and other words
of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision.

"Act", when used with respect to any Holder, has the meaning specified
in Section 104.

"Additional Senior Obligations" means all indebtedness of the Company
for claims in respect of derivative products such as interest and foreign
exchange rate contracts, commodity contracts and similar arrangements, whether
outstanding on the date of execution of this Indenture or thereafter created,
assumed or incurred, provided, however, that Additional Senior Obligations
shall not include claims in respect of Senior Indebtedness or any obligation
(i) Ranking Junior to the Securities or (ii) Ranking on a Parity with the
Securities. For purposes of this definition, "claim" shall have the meaning
assigned thereto in Section 101(4) of the Bankruptcy Code of 1978, as amended
and in effect on the date of execution of this Indenture.

<PAGE>

"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.

"Authenticating Agent" means any Person authorized by the Trustee to act
on behalf of the Trustee to authenticate Securities.

"Board of Directors" means either the board of directors of the Company,
any duly authorized committee of that board or any officer of the Company duly
authorized by the board of directors of the Company or a duly authorized
committee of that board to take a specified action or make a specified
determination (the authorization of such officer being evidenced by a copy of
a resolution certified by the Secretary or an Assistant Secretary of the
Company to have been duly adopted by the board of directors of the Company or
a duly authorized committee of that board and to be in full force and effect
on the date of such certification and delivered to the Trustee).

"Board Resolution" means a copy of a resolution or action certified by
the Secretary or an Assistant Secretary of the Company to have been duly
adopted or taken by the Board of Directors and to be in full force and effect
on the date of such certification, and delivered to the Trustee.

"Book-Entry Security" means a Security in the form prescribed in Section
205 evidencing all or part of a series of Securities, issued to the Depositary
for such series or its nominee, and registered in the name of such Depositary
or its nominee.

"Business Day", when used with respect to any Place of Payment, means
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on
which banking institutions in that Place of Payment are generally authorized
or obligated by law to close.

"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Securities Exchange Act of 1934, or, if
at any time after the execution of this instrument such Commission is not
existing and performing the duties now assigned to it under the Trust
Indenture Act, then the body performing such duties at such time.

"Company" means the Person named as the "Company" in the first paragraph
of this instrument until a successor corporation shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter,
"Company" shall mean such successor corporation.

"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its President,
a Vice Chairman or a Vice President, and by its Treasurer, an Assistant
Treasurer, its Comptroller, an Assistant Comptroller, its Secretary or an
Assistant Secretary, and delivered to the Trustee.

"Corporate Trust Office" means the office of the Trustee at which at any
particular time its corporate trust business shall be principally
administered, which office at the date of execution of this Indenture is
located at Four Hundred First American Center, Nashville, Tennessee 37237,
Attention: Corporate Trust Administration; except, that, with respect to
presentation of Securities for registration of transfer and exchange, and the
location of the Securities Register, such term means the office or agency of
the Security Registrar in

<PAGE>

Greenville, South Carolina, at which at any particular time its
corporate agency business shall be conducted.

"Corporation" includes corporations, associations, companies and
business trusts.

"Defaulted Interest" has the meaning specified in Section 307.

"Depositary" means, with respect to the Securities of any series
issuable or issued in the form of a Book-Entry Security, the Person designated
as Depositary by the Company pursuant to Section 301 until a successor
Depositary shall have been appointed pursuant to Section 305, and thereafter
"Depositary" shall mean or include each Person who is then a Depositary
hereunder, and if at any time there is more than one such Person, "Depositary"
as used with respect to the Securities of any such series shall mean the
Depositary with respect to the Securities of that series.

"Event of Default" has the meaning specified in Section 501.

"Holder" means a Person in whose name a Security is registered in the
Security Register.

"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof
and shall include the terms of particular series of Securities established as
contemplated by Section 301.

"Interest", when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, means interest
payable after Maturity.

"Interest Payment Date", when used with respect to any Security, means
the Stated Maturity of an instalment of interest on such Security.

"Maturity", when used with respect to any Security, means the date on
which the principal of such Security or an instalment of principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity or
by declaration of acceleration, call for redemption or otherwise.

"Officers' Certificate" means a certificate signed by the Chairman of
the Board, the President, a Vice Chairman or a Vice President, and by the
Treasurer, an Assistant Treasurer, the Comptroller, an Assistant Comptroller,
the Secretary or an Assistant Secretary of the Company, or a Subsidiary, as
the case may be, and delivered to the Trustee.

"Opinion of Counsel" means a written opinion of counsel, who may be an
employee of or counsel for the Company, or who may be other counsel
satisfactory to the Trustee.

"Original Issue Discount Security" means any Security which provides for
an amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 502.

"Outstanding", when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:

(i) Securities theretofore cancelled by the Trustee or delivered
to the Trustee for cancellation;

3
<PAGE>

(ii) Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent (other than the Company) in trust or set aside and
segregated in trust by the Company (if the Company shall act as its own
Paying Agent) for the Holders of such Securities; provided, that if such
Securities are to be redeemed, notice of such redemption has been duly
given pursuant to this Indenture or provision therefor satisfactory to
the Trustee has been made; and

(iii) Securities which have been paid pursuant to Section 306 or
in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any
such Securities in respect of which there shall have been presented to
the Trustee proof satisfactory to it that such Securities are held by a
bona fide purchaser in whose hands such Securities are valid obligations
of the Company;

provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, (i) the
principal amount of an Original Issue Discount Security that shall be deemed
to be Outstanding shall be the amount of the principal thereof that would be
due and payable as of the date of such determination upon acceleration of the
Maturity thereof pursuant to Section 502; (ii) the principal amount of a
Security denominated in a foreign currency or currencies shall be the U.S.
dollar equivalent, determined on the date of original issuance of such
Security, of the principal amount (or, in the case of an Original Issue
Discount Security, the U.S. dollar equivalent on the date of original issuance
of such Security of the amount determined as provided in (i) above) of such
Security; and (iii) Securities owned by or held for the account of the Company
or any other obligor upon the Securities or any Affiliate of the Company or of
such other obligor shall be disregarded and deemed not to be Outstanding,
except that, in determining whether the Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice, consent or
waiver, only Securities which the Trustee knows to be so owned shall be so
disregarded. Securities so owned or so held which have been pledged in good
faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not the Company or any other obligor upon
the Securities or any Affiliate of the Company or of such other obligor. Upon
request of the Trustee, the Company shall furnish to the Trustee promptly an
Officers' Certificate listing and identifying all Securities, if any, known by
the Company to be owned by or held for the account of the Company or any other
obligor upon the Securities, or any Affiliate of the Company or of such
obligor and the Trustee shall be entitled to accept such Officers' Certificate
as conclusive evidence of the facts therein set forth and of the fact that all
Securities not listed therein and not otherwise excluded from the provisions
hereof are Outstanding for the purposes of any such determination.

"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Securities on behalf of
the Company.

"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.

"Place of Payment", when used with respect to the Securities of any
series, means the place or places where the principal of (and premium, if any)
and interest on the Securities of that series are payable as specified as
contemplated by Section 301.

4
<PAGE>

"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by
such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 306 in exchange for or in
lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security.

"Primary Federal Regulator" means the Company's primary federal banking
regulator (which at the date of this Indenture is the Board of Governors of
the Federal Reserve System), or any successor body or institution performing
substantially the same regulatory function with respect to the Company and to
the adequacy of its capital as said Board of Governors performs on the date
hereof.

"Principal Subsidiary Bank" means Carolina First Bank, a state-chartered
bank organized under the laws of the State of South Carolina and any successor
to such bank and any other Subsidiary which is chartered as a banking
corporation under federal or state law, the total assets of which equal 50% or
more of the consolidated total assets of the Company and its Subsidiaries.
The consolidated total assets of the Company and such Subsidiaries shall be
determined as of the date of determination on the basis of the most recent
audited consolidated financial statements of the Company and such Subsidiaries
prepared in accordance with generally accepted accounting principles.

"Ranking Junior to the Securities", when used with respect to any
obligation of the Company, means any obligation of the Company which (a) ranks
junior to and not equally with or prior to the Securities in right of payment
upon the happening of any event of the kind specified in the first sentence of
the first paragraph of Section 1301, and (b) is specifically designated as
ranking junior to the Securities by express provisions in the instrument
creating or evidencing such obligation.

"Ranking on a Parity with the Securities", when used with respect to any
obligation of the Company, means any obligation of the Company which (a) ranks
equally with and not prior to the Securities in right of payment upon the
happening of any event of the kind specified in the first sentence of the
first paragraph of Section 1301, and (b) is specifically designated as ranking
on a parity with the Securities by express provision in the instrument
creating or evidencing such obligation. The securing of any obligations of the
Company, otherwise Ranking on a Parity with the Securities or Ranking Junior
to the Securities, is not deemed to prevent such obligations from constituting
obligations Ranking on a Parity with the Securities or Ranking Junior to the
Securities.

"Redemption Date", when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.

"Redemption Price", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.

"Regular Record Date" for the interest payable on any Interest Payment
Date on the Securities of any series means the date specified for that purpose
as contemplated by Section 301.

"Responsible Officer", when used with respect to the Trustee, means the
chairman of the trust committee, any vice president, any assistant vice
president, any corporate trust officer or any other officer of the corporate
trust department of the Trustee customarily performing functions similar to
those performed by any of the above designated officers.

"Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and
delivered under this Indenture.

<PAGE>

"Security Register", "Security Registrar" and "Co-Security Registrar"
have the respective meanings specified in Section 305.

"Senior Indebtedness" means (a) all indebtedness of the Company,
including indebtedness to general creditors, whether outstanding on the date
of execution of this Indenture or thereafter created, assumed or incurred
except (i) the Securities, (ii) any obligation Ranking on a Parity with the
Securities, or (iii) any obligation Ranking Junior to the Securities and
(b) any deferrals, renewals or extensions of any such Senior Indebtedness. As
used in the preceding sentence, the term "indebtedness of the Company for
money borrowed" shall mean any obligation of, or any obligation guaranteed by,
the Company for the repayment of borrowed money, whether or not evidenced by
bonds, debentures, notes or other written instruments, and any deferred
obligation for the payment of the purchase price of property or assets
acquired other than in the ordinary course of business.

"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 307.

"Stated Maturity", when used with respect to any Security or any
instalment of principal thereof or interest thereon, means the date specified
in such Security as the fixed date on which the principal of such Security or
such instalment of principal or interest is due and payable.

"Subsidiary" means a corporation, state banking corporation or national
banking association more than 50% of the outstanding Voting Stock of which is
owned, directly or indirectly, by the Company or by one or more other
Subsidiaries, or by the Company and one or more other Subsidiaries.

"Trustee" means the Person named as "Trustee" in the first paragraph of
this instrument until a successor Trustee shall have become such with respect
to one or more series of Securities pursuant to the applicable provisions of
this Indenture, and thereafter "Trustee" shall mean or include each Person who
is then a Trustee hereunder, and if at any time there is more than one such
Person, "Trustee" as used with respect to the Securities of any series shall
mean the Trustee with respect to Securities of that series.

"Trust Indenture Act" means the Trust Indenture Act of 1939, as in force
at the date as of which this instrument was executed; provided, however, that
in the event the Trust Indenture Act of 1939 is amended after such date,
"Trust Indenture Act" means, to the extent required by any such amendment, the
Trust Indenture Act of 1939 as so amended.

"Vice President", when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president".

"Voting Stock", means stock of the class or classes having general
voting power under ordinary circumstances to elect at least a majority of the
board of directors, managers or trustees of the subject corporation, state
banking corporation or national banking association (irrespective of whether
or not at the time stock of any other class or classes shall have or might
have voting power by reason of the happening of any contingency).

SECTION 102. Compliance Certificates and Opinions.

Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee an Officers' Certificate stating that all conditions precedent, if
any, provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that in the

6
<PAGE>
case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate
or opinion need be furnished.

Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture shall include:

(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;

(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;

(3) a statement that, in the opinion of each such individual, he
has made such examination or investigation as is necessary to enable him
to express an informed opinion as to whether or not such covenant or
condition has been complied with; and

(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.

SECTION 103. Form of Documents Delivered to Trustee.

In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and
one or more other such Persons as to other matters, and any such Person may
certify or give an opinion as to such matters in one or several documents.

Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or Opinion of Counsel may
be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Company
stating that the information with respect to such factual matters is in the
possession of the Company, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.

Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.

SECTION 104. Acts of Holders.

(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are
delivered to the Trustee and, where it is hereby expressly required, to the
Company. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein

<PAGE>

sometimes referred to as the "Act" of the Holders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing such agent shall be sufficient for any purpose of this Indenture
and (subject to Section 601) conclusive in favor of the Trustee and the
Company, if made in the manner provided in this Section.

(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual
signing such instrument or writing acknowledged to him the execution thereof.
Where such execution is by a signer acting in a capacity other than his
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of his authority. The fact and date of the execution of any
such instrument or writing, or the authority of the Person executing the same,
may also be proved in any other manner which the Trustee deems sufficient.

(d) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future
Holder of the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the
Company in reliance thereon, whether or not notation of such action is made
upon such Security.

SECTION 105. Notices, Etc., to Trustee and Company.

Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,

(1) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Trustee at its Corporate Trust Office,
or

(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage
prepaid, to the Company addressed to the attention of its Executive Vice
President and Chief Financial Officer at 102 South Main Street,
Greenville, South Carolina 29601 or at any other address previously
furnished in writing to the Trustee by the Company.

SECTION 106. Notice to Holders; Waiver.

Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed, first class postage prepaid, to each
Holder affected by such event, at his address as it appears in the Security
Register, not later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such notice. In any case where notice to
Holders is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders. Where this Indenture
provides for notice in any manner, such notice may be waived in writing by the
Person entitled to receive such notice, either before or after the event, and
such waiver shall be the equivalent of such notice. Waivers of notice by
Holders shall be filed with the Trustee, but such filing shall not be a
condition precedent to the validity of any action taken in reliance upon such
waiver.

8
<PAGE>

In case by reason of the suspension of regular mail service or by reason
of any other cause it shall be impracticable to give such notice by mail, then
notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.

SECTION 107. Conflict With Trust Indenture Act.

If any provision hereof limits, qualifies or conflicts with a provision
of the Trust Indenture Act that is required under such Act to be part of and
govern this Indenture, the latter provision shall control. If any provision of
this Indenture modifies or excludes any provision of the Trust Indenture Act
that may be so modified or excluded, the latter provision shall be deemed to
apply to this Indenture as so modified or to be excluded, as the case may be.

SECTION 108. Effect of Headings and Table of Contents.

The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.

SECTION 109. Successors and Assigns.

All covenants and agreements in this Indenture by the Company shall bind
its successors and assigns, whether so expressed or not.

SECTION 110. Separability Clause.

In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.

SECTION 111. Benefits of Indenture.

Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder, the holders of Senior Indebtedness and Additional Senior
Obligations and the Holders, any benefit or any legal or equitable right,
remedy or claim under this Indenture.

SECTION 112. Governing Law.

This Indenture shall be governed by and construed in accordance with the
laws of the Tennessee and, unless the laws of another jurisdiction are
specified pursuant to Section 301, the Securities shall be governed by and
construed in accordance with the laws of the Tennessee.

SECTION 113. Legal Holidays.

In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day at any Place of Payment,
then (notwithstanding any other provision of this Indenture or of the
Securities) payment of interest or principal (and premium, if any) need not be
made at such Place of Payment on such date, but may be made on the next
succeeding Business Day at such Place of Payment with the same force and
effect as if made on the Interest Payment Date or Redemption Date, or at the
Stated Maturity, provided that no interest shall accrue for the period from
and after such Interest Payment Date, Redemption Date or Stated Maturity, as
the case may be.

ARTICLE TWO

SECURITY FORMS

SECTION 201. Forms Generally.

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<PAGE>

The Securities of each series shall be in substantially the form set
forth in this Article, or in such other form as shall be established by or
pursuant to a Board Resolution or in one or more indentures supplemental
hereto, in each case with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture, and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon as may be required to comply
with the rules of any securities exchange or as may, consistently herewith, be
determined by the officers executing such Securities, as evidenced by their
execution of the Securities. If the form of Securities of any series is
established by action taken pursuant to a Board Resolution, a copy of an
appropriate record of such action shall be certified by the Secretary or an
Assistant Secretary of the Company and delivered to the Trustee at or prior to
the delivery of the Company Order contemplated by Section 303 for the
authentication and delivery of such Securities.

The Trustee's certificates of authentication shall be in substantially
the form set forth in this Article.

The definitive Securities shall be printed, lithographed or engraved on
steel engraved borders or may be produced in any other manner, all as
determined by the officers executing such Securities, as evidenced by their
execution of such Securities.

SECTION 202. Form of Face of Security.

THIS SECURITY IS NOT A DEPOSIT AND IS NOT INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION OR ANY GOVERNMENTAL AGENCY.

[If the Security is an Original Issue Discount Security, insert -- FOR
PURPOSES OF SECTION 1273 OF THE UNITED STATES INTERNAL REVENUE CODE OF 1986,
AS AMENDED, THE ISSUE PRICE OF THIS SECURITY IS % OF ITS PRINCIPAL AMOUNT
AND THE ISSUE DATE IS ___________, 19___.]

Carolina First Corporation
Subordinated
due

No. $

Carolina First Corporation, a South Carolina corporation (hereinafter
called the "Company", which term includes any successor corporation under the
Indenture hereinafter referred to), for value received, hereby promises to pay
to , or registered assigns, the principal sum of
Dollars on [If the Security is to bear interest prior to
Maturity, insert--, and to pay interest thereon from , or from the
most recent Interest Payment Date to which interest has been paid or duly
provided for, semi-annually on and in each year,
commencing , at the rate of% per annum, [If
applicable, insert method of calculation of floating rate,] until the
principal hereof is paid or made available for payment [If applicable,
insert--, and (to the extent that the payment of such interest shall be
legally enforceable) at the rate of __% per annum on any overdue principal and
premium and on any overdue instalment of interest]. The interest so payable,
and punctually paid or duly provided for, on any Interest Payment Date will,
as provided in such Indenture, be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest, which shall be the
or (whether or not a Business Day), as the case
may be, next preceding such Interest Payment Date. Any such interest not so
punctually paid or duly provided for will forthwith cease to be payable to the
Holder on such Regular Record Date and may either be paid to the Person in
whose name this Security (or one or more Predecessor Securities) is registered
at the close of business on a Special Record Date for the payment of
10
<PAGE>

such Defaulted Interest to be fixed by the Trustee, notice whereof shall
be given to Holders of Securities of this series not less than 10 days prior
to such Special Record Date, or be paid at any time in any other lawful
manner not inconsistent with the requirements of any securities exchange on
which the Securities of this series may be listed, and upon such notice as
may be required by such exchange, all as more fully provided in said
Indenture].

[If the Security is not to bear interest prior to Maturity, insert-- The
principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption or at
Stated Maturity and in such case the overdue principal of this Security shall
bear interest at the rate of % per annum (to the extent that the payment of
such interest shall be legally enforceable), which shall accrue from the date
of such default in payment to the date payment of such principal has been made
or duly provided for. Interest on any overdue principal shall be payable on
demand. Any such interest on any overdue principal that is not so paid on
demand shall bear interest at the rate of % per annum (to the extent that
the payment of such interest shall be legally enforceable), which shall accrue
from the date of such demand for payment to the date payment of such interest
has been made or duly provided for, and such interest shall also be payable on
demand.]

Payment of the principal of (and premium, if any) and [if applicable,
insert--any such] interest on this Security will be made at the offices or
agencies of the Company maintained for that purpose in ____________________
[describe relevant currency] [if applicable, insert--; provided, however, that
at the option of the Company payment of interest may be made by check drawn
upon any Paying Agent and mailed on or prior to an Interest Payment Date to
the address of the Person entitled thereto as such address shall appear in the
Security Register.]

REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS SECURITY SET
FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES
HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.

Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof, directly or through an
authenticating agent, by the manual signature of an authorized signer, this
Security shall not be entitled to any benefit under the Indenture or be valid
or obligatory for any purpose.

IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.

Dated:
Carolina First Corporation

[Seal]

Attest:

SECTION 203. Form of Reverse of Security.

11
<PAGE>

called the "Trustee", which term includes any successor trustee under the
Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Trustee, the
holders of Senior Indebtedness, the holders of Additional Senior Obligations
and the Holders of the Securities and of the terms upon which the Securities
are, and are to be, authenticated and delivered. This Security is one of the
series designated on the face hereof [, limited in aggregate principal amount
to $ ].

[If applicable, insert--The Securities of this series are subject to
redemption upon not less than 30 days notice by mail, [if applicable,
insert--(1) on in any year commencing with the year and
ending with the year through operation of the sinking fund for this
series at a Redemption Price equal to 100% of the principal amount, and (2)]
at any time [on or after , ], as a whole or in part, at the
election of the Company, at the following Redemption Prices (expressed as
percentages of the principal amount): If redeemed [on or before ,
% and if redeemed] during the 12-month period beginning of
the years indicated,

Redemption Redemption
Year Price Year Price

and thereafter at a Redemption Price equal to % of the principal amount,
together in the case of any such redemption [If applicable, insert--(whether
through operation of the sinking fund or otherwise)] with accrued interest to
the Redemption Date, but interest installments whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holders of such
Securities, or one or more Predecessor Securities, of record at the close of
business on the relevant Record Dates referred to on the face hereof, all as
provided in the Indenture.]

[If applicable, insert--The Securities of this series are subject to
redemption upon not less than 30 days notice by mail, (1) on in
any year commencing with the year and ending with the year
through operation of the sinking fund for this series at the
Redemption Prices for redemption through operation of the sinking fund
(expressed as percentages of the principal amount) set forth in the table
below, and (2) at any time [on or after ], as a whole or in
part, at the election of the Company, at the Redemption Prices for redemption
otherwise than through operation of the sinking fund (expressed as percentages
of the principal amount) set forth in the table below: If redeemed during the
12-month period beginning of the years indicated,

Redemption Price Redemption Price For
For Redemption Redemption Otherwise
Through Operation Than Through Operation
Year of the Sinking Fund of the Sinking Fund

and thereafter at a Redemption Price equal to % of the principal amount,
together in the case of any such redemption (whether through operation of the
sinking fund or otherwise) with accrued interest to the Redemption Date, but
interest installments whose Stated Maturity is on or prior to such Redemption
Date will be payable to the Holders of such Securities, or one or more
Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the
Indenture.]

12
<PAGE>

[Notwithstanding the foregoing, the Company may not, prior to
, redeem any Securities of this series as contemplated by
[Clause (2) of] the preceding paragraph as a part of, or in anticipation of,
any refunding operation by the application, directly or indirectly, of moneys
borrowed having an interest cost to the Company (calculated in accordance with
generally accepted financial practice) of less than % per annum.]

[The sinking fund for this series provides for the redemption on
in each year beginning with the year and ending with the
year of [not less than] $ [("mandatory sinking fund") and
not more than $ ] aggregate principal amount of Securities of this
series. [Securities of this series acquired or redeemed by the Company
otherwise than through [mandatory] sinking fund payments may be credited
against subsequent [mandatory] sinking fund payments otherwise required to be
made.]

In the event of redemption of this Security in part only, a new Security
or Securities of this series for the unredeemed portion hereof will be issued
in the name of the Holder hereof upon the cancellation hereof.

In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day at any Place of Payment,
then (notwithstanding any other provision of the Indenture or of this
Security) payment of interest or principal (and premium, if any) need not be
made at such Place of Payment on such date, but may be made on the next
succeeding Business Day at such Place of Payment with the same force and
effect as if made on the Interest Payment Date or Redemption Date, or at the
Stated Maturity, provided that no interest shall accrue for the period from
and after such Interest Payment Date, Redemption Date or Stated Maturity, as
the case may be.

The indebtedness evidenced by this Security is unsecured and, to the
extent provided in the Indenture, subordinate and subject in right of payment
to the prior payment in full of all Senior Indebtedness and, under certain
circumstances, to Additional Senior Obligations, and this Security is issued
subject to the provisions of the Indenture with respect thereto. Each Holder
of this Security, by accepting the same, (a) agrees to and shall be bound by
such provisions and (b) authorizes and directs the Trustee on his behalf to
take such action as may be necessary or appropriate to effectuate the
subordination so provided.

[If the Security is not an Original Issue Discount Security,--If a
Bankruptcy Event of Default (as defined in the Indenture) with respect to the
Company shall occur and be continuing, the principal of the Securities of this
series may be declared due and payable in the manner and with the effect
provided in the Indenture.]

[If the Security is an Original Issue Discount Security,--If a
Bankruptcy Event of Default (as defined in the Indenture) with respect to the
Company shall occur and be continuing, an amount of principal of the
Securities of this series may be declared due and payable in the manner and
with the effect provided in the Indenture. Such amount shall be equal
to--insert formula for determining the amount. Upon payment (i) of the amount
of principal so declared due and payable and (ii) of interest on any overdue
principal and overdue interest (in each case to the extent that the payment of
such interest shall be legally enforceable), all of the Company's obligations
in respect of the payment of the principal of and interest, if any, on the
Securities of this series shall terminate.]

13
<PAGE>

permitting the Holders of specified percentages in aggregate principal
amount of the Securities of each series at the time Outstanding, on behalf
of the Holders of all Securities of such series, to waive compliance by
the Company with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Security shall be conclusive and binding upon
such Holder and upon all future Holders of this Security and of any Security
issued upon the registration of transfer hereof or in exchange herefor or in
lieu hereof, whether or not notation of such consent or waiver is made upon
this Security.

No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of (and premium, if any)
and interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.

As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of (and
premium, if any) and interest on this Security are payable, duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities
of this series, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.

The Securities of this series are issuable only in registered form
without coupons in denominations of $ and any integral multiple
thereof. As provided in the Indenture and subject to certain limitations
therein set forth, Securities of this series are exchangeable for a like
aggregate principal amount of Securities of this series of a different
authorized denomination, as requested by the Holder surrendering the same.

No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

The Indenture provides that a Subsidiary may assume the obligations of
the Company under the Indenture and the Securities, subject to the
satisfaction of certain conditions, including the Company's guaranteeing of
the Subsidiary's obligations under this Security and the Indenture.

Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Security is registered as the owner hereof for
all purposes, whether or not this Security shall be overdue, and neither the
Company, the Trustee nor any such agent shall be affected by notice to the
contrary.

All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.

SECTION 204. Form of Trustee's Certificate of Authentication.

This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.

_____________________________________,
as Trustee

By
Authorized Signature

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<PAGE>

SECTION 205. Issuance of Book-Entry Securities.

Any Book-Entry Security authenticated and issued hereunder shall, in
addition to the provisions contained in Section 202 and 203, bear a legend in
substantially the following form, subject to modification by the Depositary:

"This Security is a Book-Entry Security within the meaning of the
Indenture hereinafter referred to and is registered in the name of a
Depositary or a nominee of a Depositary. This Security is exchangeable
for Securities registered in the name of a person other than the
Depositary or its nominee only in the limited circumstances described in
the Indenture and may not be transferred except as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary."

Any Book-Entry Security issued hereunder may provide that it shall
represent the aggregate amount of Outstanding Securities from time to time
endorsed thereon and may also provide that the aggregate may from time to time
be reduced to reflect exchanges or increased to reflect the issuance of
additional uncertificated Securities of such series. Any endorsement of a
Book-Entry Security to reflect the amount, or any increase or decrease in the
amount, of Outstanding Securities represented thereby shall be made by the
Trustee and in such manner as shall be specified in such Security or the
Company Order to be delivered to the Trustee pursuant to Section 303. Any
instructions by the Company with respect to a Book-Entry Security, after its
initial issuance, shall be in writing but need not comply with Section 102.

Each Depositary designated pursuant to Section 301 for a Book-Entry
Security must, at the time of its designation and at all times while it serves
as Depositary, be a clearing agency registered under the Securities Exchange
Act of 1934 and any other applicable statute or regulation.

Book-Entry Securities may be issued only in registered form and in
either temporary or permanent form.

ARTICLE THREE

THE SECURITIES

SECTION 301. Amount Unlimited; Issuable in Series.

The aggregate principal amount of Securities which may be authenticated
and delivered under this Indenture is unlimited.

The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution, and set forth in an
Officers' Certificate, or established in one or more indentures supplemental
hereto, prior to the issuance of Securities of any series:

(1) the title of the Securities of the series (which shall
distinguish the Securities of the series from all other Securities);

(2) any limit upon the aggregate principal amount of the
Securities of the series which may be authenticated and delivered under
this Indenture (except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other
Securities of the series pursuant to Section 304, 305, 306, 906, or
1107);

(3) the date or dates on which the principal of the Securities of
the series is payable;

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<PAGE>

(4) the rate or rates at which the Securities of the series shall
bear interest, if any, the date or dates from which such interest shall
accrue, the Interest Payment Dates on which such interest shall be
payable and the Regular Record Date for the interest payable on any
Interest Payment Date;

(5) the place or places, if any, in addition to Greenville, South
Carolina, where the principal of (and premium, if any) and interest on
Securities of the series shall be payable;

(6) the period or periods within which, the price or prices at
which and the terms and conditions upon which Securities of the series
may be redeemed, in whole or in part, at the option of the Company;

(7) the obligation, if any, of the Company to redeem or purchase
Securities of the series pursuant to any sinking fund or analogous
provisions or at the option of a Holder thereof and the period or
periods within which, the price or prices at which and the terms and
conditions upon which Securities of the series shall be redeemed or
purchased, in whole or in part, pursuant to such obligation;

(8) if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which Securities of the series
shall be issuable;

(9) the currency or currencies, including composite currencies, in
which payment of the principal of and any premium and interest on the
Securities of the series shall be payable if other than the currency of
the United States of America;

(10) if the amount or payments of principal of and any premium or
interest on the Securities of the series may be determined with
reference to an index, the manner in which such amounts shall be
determined;

(11) if other than the principal amount thereof, the portion of
the principal amount of Securities of the series which shall be payable
upon declaration of acceleration of the Maturity thereof pursuant to
Section 502;

(12) if other than the law of the Tennessee, the law which will
govern the terms of the Securities; and

(13) the form of the Securities, and the extent, if any, to which
any of the Securities will be issuable in Book-Entry form and, in such
case, the Depositary for such Book-Entry Security or Securities, and the
terms and conditions, if any, upon which such Book-Entry Security may be
exchanged in whole or in part for definitive Securities, if other than
as set forth in Section 305.

(14) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture).

All Securities of any one series shall be substantially identical except
as to denomination and except as may otherwise be provided in or pursuant to
such Board Resolution and set forth in such Officers' Certificate or in any
such indenture supplemental hereto.

At the option of the Company, interest on the Securities of any series
that bears interest may be paid by mailing a check to the address of the
person entitled thereto as such address shall appear in the Securities
Register.

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<PAGE>

If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such action
shall be certified by the Secretary or an Assistant Secretary of the Company
and delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series.

The Securities shall be subordinated to Senior Indebtedness and, under
certain circumstances, to Additional Senior Obligations as provided in Article
Thirteen.

SECTION 302. Denominations.

The Securities of each series shall be issuable in registered form
without coupons in such denominations as shall be specified as contemplated by
Section 301. In the absence of any such provisions with respect to the
Securities of any series, the Securities of such series shall be issuable in
denominations of $1,000 and any integral multiple thereof.

SECTION 303. Execution, Authentication, Delivery and Dating.

The Securities shall be executed on behalf of the Company by its
President or one of its Executive Vice Presidents, under its corporate seal
reproduced thereon attested by its Secretary or one of its Assistant
Secretaries. The signature of any of these officers on the Securities may be
manual or facsimile.

Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.

At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities of any series executed by
the Company to the Trustee for authentication, together with a Company Order
for the authentication and delivery of such Securities, and the Trustee in
accordance with the Company Order and subject to the provisions hereof shall
authenticate and deliver such Securities. If the form or terms of the
Securities of the series have been established in or pursuant to one or more
Board Resolutions as permitted by Sections 201 and 301, in authenticating such
Securities, and accepting the additional responsibilities under this Indenture
in relation to such Securities, the Trustee shall be entitled to receive, and
(subject to Section 601) shall be fully protected in relying upon, an Opinion
of Counsel stating:

(a) if the form of such Securities has been established by or
pursuant to Board Resolution as permitted by Section 201, that such form
has been established in conformity with the provisions of this
Indenture;

(b) if the terms of such Securities have been established by or
pursuant to Board Resolution as permitted by Section 301, that such
terms have been established in conformity with the provisions of this
Indenture; and

(c) that all conditions precedent to the authentication and
delivery of such Securities have been complied with and that such
Securities, when authenticated and delivered by the Trustee and issued
by the Company in the manner and subject to any conditions specified in
such Opinion of Counsel, will constitute valid and legally binding
obligations of the Company, enforceable in accordance with their terms,
subject to bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting the enforcement of
creditors rights and to general equity principles.

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If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.

Each Security shall be dated the date of its authentication.

No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such
Security has been duly authenticated and delivered hereunder and is entitled
to the benefits of this Indenture.

If the Company shall establish pursuant to Section 301 that the
Securities of a series are to be issued in whole or in part in the form of one
or more Book-Entry Securities, then the Company shall execute and the Trustee
shall, in accordance with this Section and a Company Order for the
authentication and delivery of such Book-Entry Securities with respect to such
series, authenticate and deliver one or more Book-Entry Securities in
permanent or temporary form that (i) shall represent and shall be denominated
in an aggregate amount equal to the aggregate principal amount of the
Outstanding Securities of such series to be represented by one or more Book-
Entry Securities, (ii) shall be registered in the name of the Depositary for
such Book-Entry Security or Securities or the nominee of such Depositary and
(iii) shall be delivered by the Trustee to such Depositary or pursuant to such
Depositary's instructions.

SECTION 304. Temporary Securities.

Pending the preparation of definitive Securities of any series, the
Company may execute, and upon Company Order the Trustee shall authenticate and
deliver, temporary Securities which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Securities may determine, as
evidenced by their execution of such Securities.

If temporary Securities of any series are issued, the Company will cause
definitive Securities of that series to be prepared without unreasonable
delay. After the preparation of definitive Securities of such series, the
temporary Securities of such series shall be exchangeable for definitive
Securities of such series upon surrender of the temporary Securities of such
series at the office or agency of the Company in a Place of Payment for that
series, without charge to the Holder. Upon surrender for cancellation of any
one or more temporary Securities of any series, the Company shall execute and
the Trustee shall authenticate and deliver in exchange therefor a like
principal amount of definitive Securities of the same series of authorized
denominations. Until so exchanged the temporary Securities of any series shall
in all respects be entitled to the same benefits under this Indenture as
definitive Securities of such series.

SECTION 305. Registration, Registration of Transfer and Exchange.

The Company shall cause to be kept at the office of the Security
Registrar designated pursuant to this Section 305 or Section 1002 a register
(being the combined register of the Security Registrar and any Co-Security
Registrars and herein sometimes collectively referred to as the "Security
Register") in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of Securities and
for transfers of Securities.

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Carolina First Bank is hereby initially appointed
"Security Registrar" for the purpose of registering Securities as herein
provided.

Upon surrender for registration of transfer of any Security of any
series at the office or agency in a Place of Payment for that series, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Securities
of the same series, of any authorized denominations and of a like aggregate
principal amount.

At the option of the Holder, Securities of any series may be exchanged
for other Securities of the same series, of any authorized denominations and
of a like aggregate principal amount, upon surrender of the Securities to be
exchanged at such office or agency. Whenever any Securities are so surrendered
for exchange, the Company shall execute, and the Trustee shall authenticate
and deliver, the Securities which the Holder making the exchange is entitled
to receive.

All Securities issued upon registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or exchange.

Every Security presented or surrendered for registration of transfer or
for exchange shall (if so required by the Company, the Security Registrar or
any Co-Security Registrar) be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Company, the Security
Registrar or such Co-Security Registrar duly executed, by the Holder thereof
or his attorney duly authorized in writing.

No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed
in connection with any registration of transfer or exchange of Securities,
other than exchanges pursuant to Section 304, 906 or 1107 not involving any
transfer.

Neither the Company, the Security Registrar nor any Co-Security
Registrar shall be required (i) to issue, register the transfer of or exchange
Securities of any series during a period beginning at the opening of business
15 days before the day of the mailing of a notice of redemption of Securities
of that series selected for redemption under Section 1103 and ending at the
close of business on the day of such mailing, or (ii) to register the transfer
of or exchange any Security so selected for redemption in whole or in part,
except the unredeemed portion of any Security being redeemed in part.

If at any time the Depositary for the Securities of a series notifies
the Company that it is unwilling or unable to continue as Depositary for the
Securities of such series or if at any time the Depositary for the Securities
of such series shall no longer be eligible under Section 205, the Company
shall appoint a successor Depositary with respect to the Securities of such
series. If a successor Depositary for the Securities of such series is not
appointed by the Company within 90 days after the Company receives such notice
or becomes aware of such ineligibility, the Company's election pursuant to
Section 301(13) shall no longer be effective with respect to the Securities of
such series and the Company will execute, and the Trustee, upon receipt of a
Company Order for the authentication and delivery of definitive Securities of
such series, will authenticate and deliver Securities of such series of like
tenor and terms in definitive form in an aggregate principal amount equal to
the principal amount of the Book-Entry Security or Securities representing
such series in exchange for such Book-Entry Security or Securities.

The Company may at any time and in its sole discretion determine that
the Securities of any series issued in the form of one or more Book-Entry
Securities

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shall no longer be represented by such Book-Entry Security or
Securities. In such event, the Company will execute, and the Trustee, upon
receipt of a Company Order for the authentication and delivery of definitive
Securities of such series, will authenticate and deliver Securities of such
series of like tenor and terms in definitive form in an aggregate principal
amount equal to the principal amount of the Book-Entry Security or Securities
representing such series in exchange for such Book-Entry Security or
Securities.

If specified by the Company pursuant to Section 301 with respect to a
series of Securities, or if an Event of Default, or an event which with
notice, lapse of time or both would be an Event of Default with respect to the
Securities of such series has occurred and is continuing, a Person owning a
beneficial interest in a Book-Entry Security for Securities of such series may
instruct the Depositary for such series of Securities to surrender such Book-
Entry Security for such series of Securities in exchange in whole or in part
for Securities of such series of like tenor in definitive registered form.
Thereupon, the Company shall execute, and the Trustee shall authenticate and
deliver, without service charge:

(a) to the Person specified by such Depositary a new Security or
Securities of the same series, of like tenor, of any authorized
denomination as requested by such Person, in an aggregate principal
amount equal to and in exchange for such Person's beneficial interest in
the Book-Entry Security; and

(b) to such Depositary a new Book-Entry Security of like tenor in
an authorized denomination equal to the difference, if any, between the
principal amount of the surrendered Book-Entry Security and the
aggregate principal amount of Securities delivered pursuant to clause
(a) above.

Upon the exchange of a Book-Entry Security for Securities in definitive
form, such Book-Entry Security shall be cancelled by the Trustee. Securities
issued in exchange for a Book-Entry Security pursuant to this Section shall be
registered in such names and in such authorized denominations, and delivered
to such addresses, as the Depositary for such Book-Entry Security, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee in writing. The Trustee shall deliver such Securities to
the Persons in whose names such Securities are so registered or to the
Depositary.

Notwithstanding any other provision of this Section, unless and until it
is exchanged in whole or in part for Securities in definitive registered form,
a Book-Entry Security representing all or a portion of the Securities of a
series may not be transferred except as a whole by the Depositary for such
series to a nominee of such Depositary or by a nominee of such Depositary to
such Depositary or another nominee of such Depositary or by such Depositary or
any such nominee to a successor Depositary for such series or a nominee of
such successor Depositary.

SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.

If any mutilated Security is surrendered to the Trustee and there is
delivered to the Company and the Trustee such security or indemnity as may be
required by them to save each of them and any agent of either of them harmless
then the Company shall execute and the Trustee shall authenticate and deliver
in exchange therefor a new Security of the same series and of like tenor and
principal amount and bearing a number not contemporaneously outstanding.

If there shall be delivered to the Company and the Trustee (i) evidence
to their satisfaction of the destruction, loss or theft of any Security and
(ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice
to the Company or the Trustee that such Security has been acquired by a bona
fide

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<PAGE>

purchaser, the Company shall execute and upon its request the Trustee
shall authenticate and deliver, in lieu of any such destroyed, lost or stolen
Security, a new Security of the same series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.

In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Security, pay such Security.

Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.

Every new Security of any series issued pursuant to this Section in lieu
of any destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the
destroyed, lost or stolen Security shall be at any time enforceable by anyone,
and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securities of that series duly issued
hereunder.

The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.

SECTION 307. Payment of Interest; Interest Rights Preserved.

Interest on any Security which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the Person in
whose name that Security (or one or more Predecessor Securities) is registered
at the close of business on the Regular Record Date for such interest.

Any interest on any Security of any series which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in Clause (1) or (2) below:

(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose name the Securities of such series (or
their respective Predecessor Securities) are registered at the close of
business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company
shall notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each Security of such series and the date of the
proposed payment, and at the same time the Company shall deposit with
the Trustee an amount of money equal to the aggregate amount proposed to
be paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the
proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this
Clause provided. Thereupon the Trustee shall fix a Special Record Date
for the payment of such Defaulted Interest which shall not be more than
15 days and not less than 10 days prior to the date of the proposed
payment and not less than 10 days after the receipt by the Trustee of
the notice of the proposed payment. The Trustee shall promptly notify
the Company of such Special Record Date and, in the name and at the
expense of the Company, shall cause notice of the proposed payment of
such Defaulted Interest and the Special Record Date thereof to be
mailed, first-class postage prepaid, to each Holder of Securities of
such series at his address as it appears in the Security Register, not
less than 10 days prior to such Special Record Date. Notice

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of the proposed payment of such Defaulted Interest and the Special
Record Date therefor having been so mailed, such Defaulted Interest
shall be paid to the Persons in whose names the Securities of such
series (or their respective Predecessor Securities) are registered at
the close of business on such Special Record Date and shall no longer
be payable pursuant to the following Clause (2).

(2) The Company may make payment of any Defaulted Interest on the
Securities of any series in any other lawful manner not inconsistent
with the requirements of any securities exchange on which such
Securities may be listed, and upon such notice as may be required by
such exchange, if, after notice given by the Company to the Trustee of
the proposed payment pursuant to this Clause, such manner of payment
shall be deemed practicable by the Trustee.

Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Security.

SECTION 308. Persons Deemed Owners.

Prior to due presentment of a Security for registration of transfer, the
Company, the Trustee and any agent of the company or the Trustee may treat the
Person in whose name such Security is registered as the owner of such Security
for the purpose of receiving payment of principal of (and premium, if any) and
(subject to Section 307) interest on such Security and for all other purposes,
whatsoever, whether or not such Security by overdue, and neither the Company,
the Trustee nor any agent of the Company or the Trustee shall be affected by
notice to the contrary.

SECTION 309. Cancellation.

All Securities surrendered for payment, redemption, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly cancelled by it. The Company may at any time deliver to
the Trustee for cancellation any Securities previously authenticated and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and all Securities so delivered shall be promptly cancelled by the
Trustee. No Securities shall be authenticated in lieu of or in exchange for
any Securities cancelled as provided in this Section, except as expressly
permitted by this Indenture. All cancelled Securities held by the Trustee
shall be disposed of as directed by a Company Order.

SECTION 310. Computation of Interest.

Except as otherwise contemplated by Section 301 for Securities of any
series, interest on the Securities of each series shall be computed on the
basis of a year of twelve 30-day months.

SECTION 311. Regarding Beneficial Ownership Interests in Book-Entry
Securities.

Neither the Company, the Trustee, any Authenticating Agent, any Paying
Agent nor the Security Registrar will have any responsibility or liability for
any aspect of the records relating to or payments made on account of
beneficial ownership interests in a Book-Entry Security or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.

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ARTICLE FOUR

SATISFACTION AND DISCHARGE

SECTION 401. Satisfaction and Discharge of Indenture.

This Indenture shall upon Company Request cease to be of further effect
(except as to (i) remaining rights of registration of transfer, substitution
and exchange of Securities, (ii) rights hereunder of Holders to receive
payments of principal of (and premium, if any) and interest on the Securities,
and other rights, duties and obligations of the Holders as beneficiaries
hereof with respect to the amounts, if any, so deposited with the Trustee, and
(iii) the rights, obligations and immunities of the Trustee hereunder), and
the Trustee, at the expense of the Company, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture, when

(1) either

(A) all Securities theretofore authenticated and delivered
(other than (i) Securities which have been destroyed, lost or
stolen and which have been replaced or paid as provided in Section
306 and (ii) Securities for whose payment money has theretofore
been deposited in trust or segregated and held in trust by the
Company and thereafter repaid to the Company or discharged from
such trust, as provided in Section 1003) have been delivered to
the Trustee for cancellation; or

(B) all such Securities not theretofore delivered to the
Trustee for cancellation (i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity within
one year, or (iii) are to be called for redemption within one year
under arrangements satisfactory to the Trustee for the giving of
notice of redemption by the Trustee in the name, and at the
expense, of the Company; and the Company, in the case of (i),
(ii), or (iii) above, has deposited or caused to be deposited with
the Trustee as trust funds in trust for the purpose an amount
sufficient to pay and discharge the entire indebtedness on such
Securities not theretofore delivered to the Trustee for
cancellation, for principal (and premium, if any) and interest to
the date of such deposit (in the case of Securities which have
become due and payable) or to the Stated Maturity or Redemption
Date, as the case may be;

(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and

(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge
of this Indenture have been complied with.

In the event there are Securities of two or more series hereunder, the Trustee
shall be required to execute an instrument acknowledging satisfaction and
discharge of this Indenture only if requested to do so with respect to
Securities of all series as to which it is Trustee and if the other conditions
thereto are met. In the event there are two or more Trustees hereunder, then
the effectiveness of any such instrument shall be conditioned upon receipt of
such instruments from all Trustees hereunder.

Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607, the obligations
of the Trustee to any Authenticating Agent under Section 614 and, if money
shall have been deposited with the Trustee pursuant to subclause (B) of
Clause (1) of

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this Section, the obligations of the Trustee under Section 402
and the last paragraph of Section 1003 shall survive.

SECTION 402. Application of Trust Money.

Subject to the provisions of the last paragraph of Section 1003, all
money deposited with the Trustee pursuant to Section 401 shall be held in
trust and applied by it, in accordance with the provisions of the Securities
and this Indenture, to the payment either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for whose payment such money has been deposited with the
Trustee.

ARTICLE FIVE

REMEDIES

SECTION 501. Events of Default.

"Event of Default", wherever used herein with respect to Securities of
any series, means any one of the following events (whatever the reason for
such Event of Default and whether it shall be occasioned by the provisions of
Article 13 or be voluntary or involuntary or be effected by operation of law
or pursuant to any judgment, decree or order of any court or any order, rule
or regulation of any administrative or governmental body):

(1) default in the payment of any interest upon any Security of
that series when it becomes due and payable, and continuance of such
default for a period of 30 days; or

(2) default in the payment of the principal of (or premium, if
any, on) any Security of that series at its Maturity; or

(3) default in the deposit of any sinking fund payment, when and
as due by the terms of a Security of that series; or

(4) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture or in any instrument
evidencing indebtedness for borrowed money in an aggregate principal
amount exceeding $1,000,000 of the Company, and continuance of such
default or breach for a period of 30 days after there has been given, by
registered or certified mail, to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 10% in principal
amount of the Outstanding Securities of that series a written notice
specifying such default or breach and requiring it to be remedied and
stating that such notice is a "Notice of Default" hereunder; or

(5) the entry of a decree or order for relief in respect of the
Company by a court having jurisdiction in the premises in an involuntary
case under the Federal or state bankruptcy laws, as now or hereafter
constituted, and the continuance of any such decree or order unstayed
and in effect for a period of 60 consecutive days; or

(6) the commencement by the Company of a voluntary case under the
Federal or state bankruptcy laws, as now or hereafter constituted, or
the consent by the Company to the entry of a decree or order for relief
in an involuntary case under any such law; or

(7) the consent by the Company to the appointment of or taking
possession by a receiver, liquidator, sequestrator or custodian of the
Company or of a Principal Subsidiary Bank; or

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<PAGE>

(8) the admission by the Company or by a Principal Subsidiary
Bank of its insolvency or inability to pay its debts generally as such
debts become due; or

(9) the acceleration of any indebtedness for borrowed money in
an aggregate principal amount exceeding $1,000,000 of the Company or of
a Principal Subsidiary Bank, occasioned by a payment default or
foreclosure on collateral securing such indebtedness, if such
acceleration is not annulled within 10 days after there has been given,
by registered or certified mail, to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 10% in principal
amount of the Outstanding Securities of that series a written notice
specifying such acceleration and requiring it to be annulled and stating
that such notice is a "Notice of Default" hereunder; or

(10) any other Event of Default provided with respect to
Securities of such series specified as contemplated by Section 301.

SECTION 502. Acceleration of Maturity; Rescission and Annulment Other
Events of Default; Appointment of Observer.

If an Event of Default described in clauses (5) or (6) of Section 501
with respect to Securities of any series at the time Outstanding (a
"Bankruptcy Event of Default") occurs and is continuing, then in every such
case the Trustee or the Holders of not less than 25% in principal amount of
the Outstanding Securities of that series may declare the principal amount
(or, if the Securities of that series are Original Issue Discount Securities,
such portion of the principal amount as may be specified in the terms of that
series) of all of the Securities of that series to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee if
given by Holders), and upon any such declaration such principal amount (or
specified amount) shall become immediately due and payable.

At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in
this Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Company and
the Trustee, may rescind and annul such declaration and its consequences if

(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay

(A) all overdue interest on all Securities of that series,

(B) the principal of (and premium, if any, on) any
Securities of that series which have become due otherwise than by
such declaration of acceleration and interest thereon at the rate
or rates prescribed therefor in such Securities,

(C) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate or rates prescribed
therefor in such Securities, and

(D) all sums paid or advanced by the Trustee hereunder and
the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel; and

(2) all Bankruptcy Events of Default with respect to Securities of
that series have been cured or waived as provided in Section 513.

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<PAGE>

If an Event of Default described in Section 501 other than in clauses
(5) or (6) of Section 501 with respect to Securities of any series at the time
Outstanding (a "Non-Bankruptcy Event of Default") occurs and is continuing,
then in every such case the Trustee or the Holders of not less than 10% in
principal amount of the Outstanding Securities of that series may, by a notice
in writing to the Company (and to the Trustee if given by Holders), appoint an
observer who shall be entitled (i) to receive at least 10 days advance notice
of any meeting of the Board of Directors of the Company or any proposed action
by written consent by such Board of Directors, (ii) to attend each such
meeting as a non-voting observer, and (iii) to report thereon to the Trustee
(and to the Holders if such observer was appointed by Holders).

SECTION 503. Collection of Indebtedness and Suits for Enforcement by
Trustee.

The Company covenants that if

(1) default is made in the payment of any interest on any Security
when such interest becomes due and payable and such default continues
for a period of 30 days, or

(2) default is made in the payment of the principal of (or
premium, if any, on) any Security at the Maturity thereof,

the Company will, upon demand of the Trustee, pay to it, for the benefit of
the Holders of such Securities, the whole amount then due and payable on such
Securities for principal (and premium, if any) and interest and, to the extent
that payment of such interest shall be legally enforceable, interest on any
overdue principal (and premium, if any) and on any overdue interest, at the
rate or rates prescribed therefor in such Securities, and, in addition
thereto, such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.

If the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon such Securities and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon such Securities,
wherever situated.

If an Event of Default with respect to Securities of any series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Securities of such series
by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.

SECTION 504. Trustee May File Proofs of Claim.

In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the
Securities shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Trustee shall have
made any demand on the Company for the payment of overdue principal or
interest) shall be entitled and empowered, by intervention in such proceeding
or otherwise, to take any and all

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<PAGE>

actions authorized under the Trust Indenture Act in order to have claims of
the Holders and the Trustee allowed in any such proceeding. In particular,
the Trustee shall be authorized

(i) to file and prove a claim for the whole amount of principal
(and premium, if any) and interest owing and unpaid in respect of the
Securities and to file such other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee
(including and claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and
of the Holders allowed in such judicial proceeding, and

(ii) to collect and receive any moneys or other property payable
or deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders,
to pay to the Trustee any amount due it for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel,
and any other amounts due the Trustee under Section 607.

Nothing herein contained shall be deemed to authorized the Trustee to
authorized or consent to or accept or adopt on behalf of any Holder any plan
of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof or to authorize the Trustee to
vote in respect of the claim of the Holder in any such proceeding.

SECTION 505. Trustee May Enforce Claims Without Possession of Securities.

All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto,
and any such proceeding instituted by the Trustee shall be brought in its own
name as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.

SECTION 506. Application of Money Collected.

Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal (or premium,
if any) or interest, upon presentation of the Securities and the notation
thereof of the payment if only partially paid and upon surrender thereof if
fully paid:

FIRST: To the payment of all amounts due the Trustee under Section 607;
and

SECOND: To the payment of the amounts then due and unpaid for principal
of (and premium, if any) and interest on the Securities in respect of which or
for the benefit of which such money has been collected, ratably, without
preference or priority of any kind, according to the amounts due and payable
on such Securities for principal (and premium, if any) and interest,
respectively.

SECTION 507. Limitation on Suits.

No Holder of any Security of any series shall have any right to
institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless

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(1) such Holder has previously given written notice to the Trustee
of a continuing Event of Default with respect to the Securities of that
series;

(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series shall have made written request to
the Trustee to institute proceedings in respect of such Event of Default
in its own name as Trustee hereunder;

(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;

(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and

(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of the Outstanding Securities of that
series;

it being understood and intended that no one or more of such Holders shall
have any right in any manner whatever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other of such Holder or Holders of any other series, or to obtain or to seek
to obtain priority or preference over any other of such Holders or to enforce
any right under this Indenture, except in the manner herein provided and for
the equal and ratable benefit of all of such Holders.

SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and
Interest.

Notwithstanding any other provision in this Indenture, the Holder of any
Security shall have the right, which is absolute and unconditional, to receive
payment of the principal of (and premium, if any) and (subject to Section 307)
interest on such Security on the Stated Maturity or Maturities expressed in
such Security (or, in the case of redemption, on the Redemption Date) and to
institute suit for the enforcement of any such payment, and such rights shall
not be impaired without the consent of such Holder.

SECTION 509. Restoration of Rights and Remedies.

If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee, and the Holders
shall be restored severally and respectively to their former positions
hereunder and thereafter all rights and remedies of the Trustee and the
Holders shall continue as though no such proceeding had been instituted.

SECTION 510. Rights and Remedies Cumulative.

Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Securities in the last paragraph of
Section 306, no right or remedy herein conferred upon or reserved to the
Trustee or to the Holders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent
the concurrent assertion or employment of any other appropriate right or
remedy.
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SECTION 511. Delay or Omission Not Waiver.

No delay or omission of the Trustee or of any Holder of any Security to
exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default
or any acquiescence therein. Every right and remedy given by this Article or
by law to the Trustee or to the Holders may be exercised from time to time,
and as often as may be deemed expedient, by the Trustee or by the Holders, as
the case may be.

SECTION 512. Control by Holders.

The Holders of a majority in principal amount of the Outstanding
Securities of any series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, with respect to the
Securities of such series, provided that

(1) such direction shall not be in conflict with any rule of law
or with this Indenture, and

(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.

SECTION 513. Waiver of Past Defaults.

The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may on behalf of the holders of all the
Securities of such series waive any past default hereunder with respect to
such series and its consequences, except a default:

(1) in the payment of the principal of (or premium, if any) or
interest on any Security of such series, or

(2) in respect of a covenant or provision hereof which under
Article Nine cannot be modified or amended without the consent of the
Holder of each Outstanding Security of such series affected.

Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent
or other default or impair any right consequent thereon.

SECTION 514. Undertaking for Costs.

All parties to this Indenture agree, and each Holder of any Security by
his acceptance thereof shall be deemed to have agreed, that any court may in
its discretion require, in any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may
in its discretion assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in such suit, having due regard to the merits
and good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Company, to any suit instituted by the Trustee, to any suit instituted by any
Holder, or group of Holders, holding in the aggregate more than 10% in
principal amount of the Outstanding Securities of any series, or to any suit
instituted by any Holder for the enforcement of the payment of the principal
of (or premium, if any) or interest on any Security on or after the Stated
Maturity or Maturities expressed in such Security (or, in the case of
redemption, on or after the Redemption Date).

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SECTION 515. Waiver of Stay or Extension Laws.

The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it
may lawfully do so) hereby expressly waives all benefit or advantage of any
such law and covenants that it will not hinder, delay or impede the exercise
of any power herein granted to the Trustee, but will suffer and permit the
exercise of every such power as though no such law had been enacted.

ARTICLE SIX

THE TRUSTEE

SECTION 601. Certain Duties and Responsibilities.

(a) Except during the continuance of an Event of Default with respect to
Securities of any series,

(1) the Trustee undertakes to perform, with respect to Securities
of such series, such duties and only such duties as are specifically set
forth in this Indenture, and no implied covenants or obligations shall
be read into this Indenture against the Trustee; and

(2) in the absence of bad faith on its part, the Trustee may, with
respect to Securities of such series, conclusively rely, as to the truth
of the statements and correctness of the opinions expressed therein,
upon certificates or opinions furnished to the Trustee and conforming to
the requirements of this Indenture; but in the case of any such
certificates or opinions which by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall be under a
duty to examine the same to determine whether or not they conform to the
requirements of this Indenture.

(b) In case an Event of Default with respect to Securities of any series
has occurred and is continuing, the Trustee shall exercise, with respect to
Securities of such series, such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of
his own affairs.

(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own wilful misconduct, except that

(1) this Subsection shall not be construed to limit the effect to
Subsection (a) of this Section;

(2) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer, unless it shall be proved that
the Trustee was negligent in ascertaining the pertinent facts;

(3) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
Direction of the Holders of majority in principal amount of the
Outstanding Securities of any series, determined as provided in Section
512, relating to the time, method and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust or
power conferred upon the Trustee, under this Indenture with respect to
the Securities of such series; and

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(4) no provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder, or in the exercise of
any of its rights or powers, if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it.

(d) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section.

SECTION 602. Notice of Defaults.

Within 90 days after the occurrence of any default hereunder with
respect to the Securities of any series, the Trustee shall transmit by mail to
all Holders of Securities of such series, as their names and addresses appear
in the Security Register, notice of such default hereunder known to the
Trustee, unless such default shall have been cured or waived; provided,
however, that, except in the case of a default in the payment of the principal
of (or premium, if any) or interest on any Security of such series or in the
payment of any sinking fund instalment with respect to Securities of such
series, the Trustee shall be protected in withholding such notice if and so
long as the board of directors, the executive committee or a trust committee
of directors or Responsible Officers of the Trustee in good faith determine
that the withholding of such notice is in the interest of the Holders of
Securities of such series; and provided, further, that in the case of any
default of the character specified in Section 501(4) with respect to
Securities of such series, no such notice to Holders shall be given until at
least 30 days after the occurrence thereof. For the purpose of this Section,
the term "default" means any event which is, or after notice or lapse of time
or both would become, an Event of Default with respect to Securities of such
series.

SECTION 603. Certain Rights of Trustee.

Subject to the provisions of Section 601:

(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or
presented by the proper party or parties;

(b) any request or direction of the Company mentioned herein shall
be sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;

(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officers' Certificate;

(d) the Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;

(e) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or

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<PAGE>

direction of any of the Holders pursuant to this Indenture, unless such
Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;

(f) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit,
and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and
premises of the Company, personally or by agent or attorney; and

(g) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents
or attorneys, and the Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or attorney appointed
with due care by it hereunder.

SECTION 604. Not Responsible for Recitals or Issuance of Securities.

The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee or any Authenticating Agent assumes no
responsibility for their correctness. The Trustee makes no representations as
to the validity of sufficiency of this Indenture or of the Securities.
Neither the Trustee nor any Authenticating Agent shall be accountable for the
use or application by the Company of Securities or the proceeds thereof.

SECTION 605. May Hold Securities.

The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to
Section 608 and 613, may otherwise deal with the Company with the same rights
it would have if it were not Trustee, Authenticating Agent, Paying Agent,
Security Registrar or such other agent.

SECTION 606. Money Held in Trust.

Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by law. The Trustee shall be under
no liability for interest on any money received by it hereunder except as
otherwise agreed with the Company.

SECTION 607. Compensation and Reimbursement.

The Company agrees

(1) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of any express trust);

(2) except as otherwise expressly provided herein, to reimburse
the Trustee upon its request for all reasonable expenses, disbursements
and advances incurred or made by the Trustee in accordance with any
provision of this Indenture (including the reasonable compensation and
the expenses and disbursements of its agents and counsel), except any
such expense,

<PAGE>
disbursement or advance as may be attributable to its negligence or
bad faith; and

(3) to indemnify the Trustee for, and to hold it harmless against,
any loss, liability or expense incurred without negligence or bad faith
on its part, arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder, including the costs and
expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or
duties hereunder.

As security for the performance of the obligations of the Company under
this Section, the Trustee shall have a lien prior to the Securities upon all
property and funds held or collected by the Trustee as such, except for funds
held in trust for the benefit of the Holders of Securities.

SECTION 608. Disqualification; Conflicting Interests.

If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject
to the provisions of, the Trust Indenture Act and this Indenture.

SECTION 609. Corporate Trustee Required; Eligibility.

There shall at all times be a Trustee hereunder which shall be a
corporation which satisfies the requirements of Section 310(a) of the Trust
Indenture Act and which has a combined capital and surplus of not less than
$50,000,000. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of a supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If
at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article.

SECTION 610. Resignation and Removal; Appointment of Successor.

(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 611.

(b) The Trustee may resign at any time with respect to the Securities of
one or more series by giving written notice thereof to the Company. If the
instrument of acceptance by a successor Trustee required by Section 611 shall
not have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee with respect
to such series.

(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal
amount of the Outstanding Securities of such series, delivered to the Trustee
and to the Company.

(d) If at any time

(1) the Trustee shall fail to comply with Section 608 after
written request therefor by the Company or by any Holder who has been a
bona fide Holder of a Security for at least six months, or

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(2) the Trustee shall cease to be eligible under Section 609 and
shall fail to resign after written request therefor by the Company or by
any such Holder, or

(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,

then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to all Securities, or (ii) subject to Section 514, any
Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly situated, petition any
court of competent jurisdiction for the removal of the Trustee with respect to
all Securities and the appointment of a successor Trustee or Trustees.

(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause,
with respect to the Securities of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with
respect to the Securities of that or those series (it being understood that
any such successor Trustee may be appointed with respect to the Securities of
one or more or all of such series and that at any time there shall be only one
Trustee with respect to the Securities of any particular series) and shall
comply with the applicable requirements of Section 611. If, within one year
after such resignation, removal, or incapability, or the occurrence of such
vacancy, a successor Trustee with respect to the Securities of any series
shall be appointed by Act of the Holders of a majority in principal amount of
the Outstanding Securities of such series delivered to the Company and the
retiring Trustee, the successor Trustee so appointed shall, forthwith upon its
acceptance of such appointment in accordance with the applicable requirements
of Section 611, become the successor Trustee with respect to the Securities of
such series and to that extent supersede the successor Trustee appointed by
the Company. If no successor Trustee with respect to the Securities of any
series shall have been so appointed by the Company or the Holders and accepted
appointment in the manner required by Section 611, any holder who has been a
bona fide Holder of a Security of such series for at least six months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Trustee with respect
to the Securities of such series.

(f) The Company shall give notice of each resignation and each removal
of the Trustee with respect to the Securities of any series and each
appointment of a successor Trustee with respect to the Securities of any
series by mailing written notice of such event by first-class mail, postage
prepaid, to all Holders of Securities of such series as their names and
addresses appear in the Security Register. Each notice shall include the name
of the successor Trustee with respect to the Securities of such series and the
address of its Corporate Trust Office.

SECTION 611. Acceptance of Appointment by Successor.

(a) In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or
removal of the retiring Trustee shall become effective and such successor
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Trustee; but, on the
request of the Company or the successor Trustee, such retiring Trustee shall,
upon payment of its charges, execute and deliver an instrument transferring to
such successor Trustee all the rights, powers, and trusts of the retiring
Trustee and

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shall duly assign, transfer and deliver to such successor Trustee
all property and money held by such retiring Trustee hereunder, subject
nevertheless to its lien, if any, provided for in Section 607.

(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company,
the retiring Trustee and each successor Trustee with respect to the Securities
of one or more series shall execute and deliver an indenture supplemental
hereto wherein each successor Trustee shall accept such appointment and which
(1) shall contain such provisions as shall be necessary or desirable to
transfer, and confirm to, and to vest in, each successor Trustee all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates, (2) if the retiring Trustee is not retiring with respect to
all Securities, shall contain such provisions as shall be deemed necessary or
desirable to confirm that all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those as to which
the retiring Trustee is not retiring shall continue to be vested in the
retiring Trustee, and (3) shall add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust, that each such Trustee
shall be trustee of a trust or trusts hereunder separate and apart from any
trust or trusts hereunder administered by any other such Trustee and that no
Trustee shall be responsible for any act or failure to act on the part of any
other Trustee hereunder; and upon the execution and delivery of such
supplemental indenture the resignation or removal of the retiring Trustee
shall become effective to the extent provided therein, such retiring Trustee
shall with respect to the Securities of that or those series to which the
appointment of such successor Trustee relates have no further responsibility
for the exercise of rights and powers or for the performance of the duties and
obligations vested in the Trustee under this Indenture, and each such
successor Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Trustee
with respect to the Securities of that or those series to which the
appointment of such successor Trustee relates; but, on request of the Company
or any successor Trustee, such retiring Trustee shall duly assign, transfer
and deliver to such successor Trustee, to the extent contemplated by such
supplemental indenture, the property and money held by such retiring Trustee
hereunder with respect to property and money held by such retiring Trustee
hereunder with respect to the Securities of that or those series to which the
appointment of such successor Trustee relates.

(c) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts
referred to in paragraph (a) or (b) of this Section, as the case may be.

(d) No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and eligible
under this Article.

SECTION 612. Merger, Conversion, Consolidation or Succession to Business.

Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to all or substantially all the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on
the part of any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or

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<PAGE>
consolidation to such authenticating Trustee may
adopt such authentication and deliver the Securities so authenticated with the
same effect as if such successor Trustee had itself authenticated such
Securities.

SECTION 613. Preferential Collection of Claims Against Company.

If the Trustee shall be or shall become a creditor, directly or
indirectly, secured or unsecured, of the Company or of any other obligor on
the Securities, the Trustee shall be subject to the provisions of the Trust
Indenture Act regarding the collection of claims against the Company or any
such other obligor on the Securities.

SECTION 614. Appointment of Authenticating Agent.

At any time when any of the Securities remain Outstanding, the Trustee
may appoint an Authenticating Agent or Agents with respect to one or more
series of Securities which shall be authorized to act on behalf of the Trustee
to authenticate Securities of such series issued upon exchange, registration
of transfer or partial redemption thereof and Securities so authenticated
shall be entitled to the benefits of this Indenture and shall be valid and
obligatory for all purposes as if authenticated by the Trustee hereunder.
Wherever reference is made in this Indenture to the authentication and
delivery of Securities by the Trustee or the Trustee's certificate of
authentication, such reference shall be deemed to include authentication and
delivery on behalf of the Trustee by an Authenticating Agent and a certificate
of authentication executed on behalf of the Trustee by an Authenticating
Agent. Each Authenticating Agent shall be acceptable to the Company and shall
at all times be a corporation organized and doing business under the laws of
the United States of America, any State thereof or the District of Columbia,
authorized under such laws to act as Authenticating Agent, having a combined
capital and surplus of not less than $50,000,000 and subject to supervision or
examination by Federal or State authority. If such Authenticating Agent
publishes reports of condition at least annually, pursuant to law or to the
requirements of said supervising or examining authority, then for the purposes
of this Section, the combined capital and surplus of such Authenticating Agent
shall be deemed to be its combined capital and surplus as set forth in its
most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.

Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating
Agent shall be a party, or any corporation succeeding to the corporate agency
or corporate trust business of an Authenticating Agent, shall continue to be
an Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any
further act on the part of the Trustee or the Authenticating Agent.

An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice
thereof to such Authenticating Agent and to the Company. Upon receiving such
notice of resignation or upon such termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail written notice
of such appointment by first-class mail, postage prepaid, to all Holders of
Securities of the series with respect to which such Authenticating Agent will
serve, as their names and addresses appear in the Security Register. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if

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originally named as an Authenticating Agent. No successor Authenticating
Agent shall be appointed unless eligible under the provisions of this Section.

The Trustee agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section, and the Trustee
shall be entitled to be reimbursed for such payments, subject to the
provisions of Section 607.

The provisions of Sections 308, 604 and 605 shall be applicable to each
Authenticating Agent.

Pursuant to each appointment made under this Section, the Securities of
each series covered by such appointment may have endorsed thereon, in addition
to the Trustee's certificate of authentication, an alternative certificate of
authentication in the following form:

This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.

__________________________________
As Trustee

By:
As Authenticating Agent

By:
Authorized Officer

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ARTICLE SEVEN

LISTS OF HOLDERS AND REPORTS BY TRUSTEE AND COMPANY

SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.

The Company will furnish or cause to be furnished to the Trustee

(a) semi-annually, not more than 15 days after each Regular Record
Date, in each year, a list, in such form as the Trustee may reasonably
require, of the names and addresses of the Holders as of such Regular
Record Date, and

(b) at such times as the Trustee may request in writing, within 30
days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the
time such list is furnished;

excluding from any such list names and addresses received by the Trustee in
its capacity as Co-Security Registrar.

SECTION 702. Preservation of Information; Communications to Holders.

(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 701 and the names and
addresses of Holders received by the Trustee in its capacity as Co-Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.

(b) The rights of Holders to communicate with other Holders with respect
to their rights under this Indenture or under the Securities, and the
corresponding rights and privileges of the Trustee, shall be as provided by
the Trust Indenture Act.

(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any agent of either of them shall be held accountable by reason of
the disclosure of any such information as to the names and addresses of the
Holders made pursuant to the Trust Indenture Act.

SECTION 703. Reports by Trustee.

(a) Within 60 days after May 15 of each year commencing with the year
1995, the Trustee shall transmit by mail to all Holders, as their names and
addresses appear in the Security Register, a brief report dated as of such
May 15 that complies with the Trust Indenture Act.

(b) The Trustee shall transmit by mail to all Holders such other reports
concerning the Trustee and its actions under this Indenture as may be required
pursuant to the Trust Indenture Act at the times and in the manner provided
pursuant thereto.

(c) A copy of each such report shall, at the time of such transmission
to Holders, be filed by the Trustee with each stock exchange upon which any
Securities are listed, with the Commission and with the Company. The Company
will notify the Trustee when any Securities are listed on any stock exchange.

SECTION 704. Reports by Company.

The Company shall file with the Trustee and the Commission, and transmit
to Holders, such information, documents and other reports, and such summaries

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thereof, as may be required pursuant to the Trust Indenture Act; provided
that any such information, documents or reports required to be filed with the
Commission pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 shall be filed with the Trustee within 15 days after the same is so
required to be filed with the Commission.

ARTICLE EIGHT

CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.

The Company shall not consolidate with or merge into any other
corporation or sell, convey, exchange, transfer or lease its properties and
assets substantially as an entirety to any Person, unless:

(1) the corporation formed by such consolidation or into which the
Company is merged or the Person which acquires by conveyance or
transfer, or which leases, the properties and assets of the Company
substantially as an entirety shall be a corporation organized and
existing under the laws of the United States of America, any State
thereof or the District of Columbia and shall expressly assume, by an
indenture supplemental hereto, executed and delivered to the Trustee, in
form satisfactory to the Trustee, the due and punctual payment of the
principal of (and premium, if any) and interest on all the Securities
and the performance of every covenant of this Indenture on the part of
the Company to be performed or observed;

(2) immediately after giving effect to such transaction and
treating any indebtedness which becomes an obligation of the Company or
a Subsidiary as a result of such transaction as having been incurred by
the Company or such Subsidiary at the time of such transaction, no Event
of Default, and no event which, after notice or lapse of time or both,
would become an Event of Default, shall have happened and be continuing;
and

(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and supplemental
indenture comply with this Article and that all conditions precedent
herein provided for relating to such transaction have been complied
with.

SECTION 802. Successor Corporation Substituted.

Upon any consolidation by the Company with or merger by the Company into
any other corporation or any conveyance, transfer or lease of the properties
and assets of the Company substantially as an entirety in accordance with
Section 801, the successor corporation formed by such consolidation or into
which the Company is merged or to which such conveyance, transfer or lease is
made shall succeed to, and be substituted for, and may exercise every right
and power of, the Company under this Indenture with the effect as if such
successor corporation had been named as the Company herein, and thereafter,
except in the case of a lease, the predecessor corporation shall be relieved
of all obligations and covenants under this Indenture and the Securities.

SECTION 803. Assumption by Subsidiary of Company's Obligations.

A Subsidiary may assume the obligations of the Company for the due and
punctual payment of the principal of (and premium, if any) and interest on the
Securities and the performance of the Company's other obligations under this
Indenture and the Securities (except its obligations under Section 1004,
which, as contemplated by Subsection (2) below, shall continue to bind the
Company), to be performed or observed, provided that:

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(1) such Subsidiary shall expressly assume such obligations by an
indenture supplemental hereto, executed and delivered to the Trustee;

(2) the Company shall guarantee the obligations of such Subsidiary
under the Securities and this Indenture, which guarantee shall also
include an undertaking by the Company to continue to comply with the
covenants set forth in Section 1004;

(3) in addition to assuming obligations under the Securities and
this Indenture, such Subsidiary shall agree to indemnify the Holder of
each Security against (a) any tax, assessment or governmental charge
imposed as a result of or relating to the act of such assumption and
(b) costs or expenses incurred directly in connection with the act of
assumption;

(4) immediately after giving effect to such transaction, no Event
of Default, and no event which, after notice or lapse of time or both,
would become an Event of Default, shall have happened and be continuing;

(5) the Company shall deliver to the Trustee an Officers'
Certificate and an Opinion of Counsel, to the effect that (a) such
assumption, (b) such guarantee and (c) such supplemental indenture
comply with this Article and that all conditions precedent herein
provided for relating to such assumption have been complied with and
such supplemental indenture and guarantee by the Company have been duly
authorized and delivered by the Company, and each constitutes a valid
and legally binding instrument of the Company, enforceable in accordance
with its terms subject to bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or affecting the enforcement of
creditors' rights generally, and subject, as to enforcement, to general
principles of equity, and any other customary exceptions which such
counsel states do not materially prejudice the rights of the Holders
under this Indenture and the Securities; and

(6) such Subsidiary shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel to the effect that
(a) such Subsidiary has obtained all governmental and regulatory
approvals and consents necessary for its assumption of liability as
principal debtor in respect of the Securities in place of the Company;
(b) such approvals and consents are at the time of assumption in full
force and effect; and (c) such supplemental indenture has been duly
authorized and delivered by such Subsidiary, constitutes a valid and
legally binding instrument of such Subsidiary, enforceable in accordance
with its terms subject to bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or affecting the enforcement of
creditors' rights generally and subject, as to enforcement, to general
principles of equity, and any other customary exceptions which such
counsel states do not materially prejudice the rights of the Holders
under this Indenture and the Securities.

Upon compliance with, and subject to, the requirements set forth above
in this Section 803, such Subsidiary shall succeed to and be substituted for
the Company, with the same effect as if it had been named as the Company
herein and in the Securities in place of the Company; and the Company shall
thereupon be relieved of any further obligation or liability hereunder or upon
the Securities (except as provided in Subsection (2) above and in its
guarantee as aforesaid). Such Subsidiary may cause to be signed, and may
issue in its own name, any or all of the Securities issuable hereunder which
theretofore shall not have been signed by the Company and delivered to the
Trustee; and, upon the order of such Subsidiary, instead of the Company, and
subject to all the terms, conditions and limitations in this Indenture
prescribed, the Trustee shall authenticate and shall deliver any Securities
which previously shall have been signed and delivered as provided herein, with
the guarantee of the Company endorsed thereon,

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and any Securities which such Subsidiary thereafter shall cause to be
signed and delivered, with the guarantee of the Company endorsed thereon,
to the Trustee for that purpose. All the Securities so issued shall in all
respects have the same legal rank and benefit under this Indenture as the
Securities theretofore or thereafter issued in accordance with the terms of
this Indenture as though all of such Securities had been issued at the date
thereof. In the event a Subsidiary shall assume the obligations of the
Company in accordance with this Section 803, such changes in phraseology
and form (but not in substance) may be made in the Securities thereafter
to be issued as may be appropriate.

ARTICLE NINE

SUPPLEMENTAL INDENTURES

SECTION 901. Supplemental Indentures Without Consent of Holders.

Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may
enter into one or more indentures supplemental hereto, in form satisfactory to
the Trustee, for any of the following purposes:

(1) to evidence the succession of another corporation to the
Company and the assumption by any such successor of the covenants of the
Company herein and in the Securities or to evidence the assumption by a
Subsidiary of the Company's obligations in accordance with Section 803;
or

(2) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Securities (and if such covenants are to
be for the benefit of less than all series of Securities, stating that
such covenants are expressly being included solely for the benefit of
such series) or to surrender any right or power herein conferred upon
the Company; or

(3) to add any additional Events of Default; or

(4) to add to or charge any of the provisions of this Indenture to
such extent as shall be necessary to permit or facilitate the issuance
of Securities in bearer form, registrable or not registrable as to
principal, and with or without interest coupons; or

(5) to add to, change or eliminate any of the provisions of this
Indenture in respect of one or more series of Securities, provided that
any such addition, change or elimination (i) shall neither (A) apply to
any Security of any series created prior to the execution of such
supplemental indenture and entitled to the benefit of such provision nor
(B) modify the rights of the Holder of any such Security with respect to
such provision or (ii) shall become effective only when there is no such
Security Outstanding; or

(6) to secure the Securities; or

(7) to establish the form or terms of Securities of any series as
permitted by Section 201 and 301; or

(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one
or more series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee,
pursuant to the requirements of Section 611(b);

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<PAGE>

(9) to cure any ambiguity, to correct or supplement any provision
contained herein or in any supplemental indenture which may be
inconsistent with any other provision herein or in any supplemental
indenture, or to make any other provisions with respect to matters or
questions arising under this Indenture or under any supplemental
indenture, provided such action shall not adversely affect the interests
of the Holders of Securities of any series in any material respect; and

(10) to provide for the terms and conditions upon which Securities
which qualify as capital under rules, regulations, orders, interpretive
rulings and guidelines of the Primary Federal Regulator as from time to
time in effect may be issued and the terms and characteristic of any
such Securities; provided, however, that any such Securities shall be
subordinated to Senior Indebtedness, and under certain circumstances,
Additional Senior Obligations, as provided in Article Thirteen; provided
further, that no such supplemental indenture shall effect any change in
any Securities which may at the time be outstanding under this
Indenture.

SECTION 902. Supplemental Indentures With Consent of Holders.

With the consent of the Holders of not less than 662/3% in principal
amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company and
the Trustee, the Company, when authorized by a Board Resolution, and the
Trustee may enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Indenture or of modifying in any manner the
rights of the Holders of Securities of such series under this Indenture;
provided, however, that no such supplemental indenture shall, without the
consent of the Holder of each Outstanding Security affected thereby,

(1) change the Stated Maturity of the principal of, or any
instalment of principal of or interest on, any Security, or reduce the
principal amount thereof or the rate of interest thereon or any premium
payable upon the redemption thereof, or reduce the amount of the
principal of an Original Issue Discount Security that would be due and
payable upon a declaration of acceleration of the Maturity thereof
pursuant to Section 502, or change any Place of Payment where, or the
coin or currency in which, any Security or any premium or the interest
thereon is payable, or impair the right to institute suit for the
enforcement of any such payment on or after the Stated Maturity thereof
(or, in the case of redemption, on or after the Redemption Date), or

(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for
any such supplemental indenture, or the consent of whose Holders is
required for any waiver (of compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences) provided
for in this Indenture, or

(3) modify the provisions of this Indenture with respect to
subordination of the Securities in a manner adverse to the Holders of
such series, or

(4) modify any of the provisions of this Section, Section 513 or
Section 1006, except to increase any such percentage or to provide that
certain other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each Outstanding Security affected
thereby; provided, however, that this clause shall not be deemed to
require the consent of any Holder with respect to changes in the
references to "the Trustee" and concomitant changes in Section 1006 or
the

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deletion of this provision, in accordance with the requirements of
Section 611(b) and 901(8).

A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such
covenant or other provision, shall be deemed not to affect the rights under
this Indenture of the Holders of Securities of any other series.

It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.

SECTION 903. Execution of Supplemental Indentures.

In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modification thereby
of the trusts created by this Indenture, the Trustee shall be entitled to
receive, and (subject to Section 601) shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture. The Trustee may, but
shall not be obligated to, enter into any such supplemental indenture which
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise.

SECTION 904. Effect of Supplemental Indentures.

Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes;
and every Holder of Securities theretofore or thereafter authenticated and
delivered hereunder shall be bound thereby.

SECTION 905. Conformity With Trust Indenture Act.

Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.

SECTION 906. Reference in Securities to Supplemental Indentures.

Securities of any series authenticated and delivered after the execution
of any supplemental indenture pursuant to this Article may, and shall if
required by the Trustee, bear a notation in form approved by the Trustee as to
any matter provided for in such supplemental indenture. If the Company shall
so determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.

ARTICLE TEN

COVENANTS

SECTION 1001. Payment of Principal, Premium and Interest.

The Company covenants and agrees for the benefit of each series of
Securities that it will duly and punctually pay the principal of (and premium,
if any) and interest on the Securities of that series in accordance with the
terms of the Securities and this Indenture.

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SECTION 1002. Maintenance of Office or Agency.

The Company will maintain in each Place of Payment for any series of
Securities an office or agency where Securities of that series may be
presented or surrendered for payment, where Securities of that series may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Company in respect of the Securities of that series and
this Indenture may be served. The Company will give prompt written notice to
the Trustee of the location, and any change in the location, of such office or
agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the Corporate Trust Office of the Trustee, and the Company hereby
appoints the Trustee as its agent to receive all such presentations,
surrenders, notices and demands.

The Company may also from time to time designate one or more other
offices or agencies where the Securities of one or more series may be
presented or surrendered for any or all such purposes and may from time to
time rescind such designations; provided, however, that no such designation or
rescission shall in any manner relieve the Company of its obligation to
maintain an office or agency in each Place of Payment for Securities of any
series for such purposes. The Company will give prompt written notice to the
Trustee of any such designations or rescission and of any change in the
location of any such other office or agency. The Company hereby designates as
a Place of Payment for each series of Securities, Greenville, South Carolina,
and appoints Carolina First Bank at its Corporate Trust Office as Paying Agent
in such city.

SECTION 1003. Money for Securities Payments to be Held in Trust.

If the Company shall at any time act as its own Paying Agent with
respect to any series of Securities, it will, on or before each due date of
the principal of (and premium, if any) or interest on any of the Securities of
that series, segregate and hold in trust for the benefit of the Persons
entitled thereto a sum sufficient to pay the principal (and premium, if any)
or interest so becoming due until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and will promptly notify the Trustee
of its action or failure so to act.

Whenever the Company shall have one or more Paying Agents for any series
of Securities, it will, prior to each due date of the principal of (and
premium, if any) or interest on any Securities of that series, deposit with a
Paying Agent a sum sufficient to pay the principal (and premium, if any) or
interest so becoming due, such sum to be held in trust for the benefit of the
Persons entitled to such principal, premium or interest, and (unless such
Paying Agent is the Trustee) the Company will promptly notify the Trustee of
its actions or failure so to act.

The Company will cause each Paying Agent for any series of Securities
other than the Trustee to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provision
of this Section, that such Paying Agent will:

(1) hold all sums held by it for the payment of the principal of
(and premium, if any) or interest on Securities of that series in trust
for the benefit of the Persons entitled thereto until such sums shall be
paid to such Persons or otherwise disposed of as herein provided;

(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Securities of that series) in the making of any
payment of principal (and premium, if any) or interest on the Securities
of that series; and

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(3) at any time during the continuance of any such default, upon
the written request of the Trustee, forthwith pay to the Trustee all
sums so held in trust by such Paying Agent.

The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held
in trust by the Company or such Paying Agent, such sums to be held by the
Trustee upon the same trusts as those upon which such sums were held by the
Company or such Paying Agent; and, upon such payment by any Paying Agent to
the Trustee, such Paying Agent shall be released from all further liability
with respect to such money.

Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of (and premium, if
any) or interest on any Security of any series and remaining unclaimed for
three years after such principal (and premium, if any) or interest has become
due and payable shall be paid to the Company on Company Request, or (if then
held by the Company) shall be discharged from such trust; and the Holder of
such Security shall thereafter, as an unsecured general creditor, look only to
the Company for payment thereof, and all liability of the Trustee or such
Paying Agent with respect to such trust money, and all liability of the
Company as trustee thereof, shall thereupon cease, provided, however, that the
Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once, in a
newspaper published in the English language, customarily published on each
Business Day and of general circulation in the Borough of Manhattan, The City
of New York, notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
publication, any unclaimed balance of such money then remaining will be repaid
to the Company.

SECTION 1004. Corporate Existence.

Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence, rights (charter and statutory) and franchises; provided, however,
that the Company shall not be required to preserve any such right or franchise
if the Company shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and its Subsidiaries
considered as a whole and that the loss thereof is not disadvantageous in any
material respect to the Holders.

SECTION 1005. Statement as to Compliance.

The Company will deliver to the Trustee, within 120 days after the end
of each fiscal year, a written statement, which need not comply with
Section 102, signed by the Chairman of the Board, the President, a Vice
Chairman or a Vice President and by the Treasurer, an Assistant Treasurer, the
Comptroller or an Assistant Comptroller of the Company, stating, as to each
signer thereof, that

(1) a review of the activities of the Company during such year and
of performance under this Indenture has been made under his supervision,
and

(2) to the best of his knowledge, based on such review, (a) the
Company has fulfilled all its obligations under this Indenture
throughout such year, or, if there has been a default in the fulfillment
of any such obligation, specifying each such default known to him and
the nature and status thereof, and (b) no event has occurred and is
continuing which is, or after notice or lapse of time or both would
become, an Event of Default, or, if such an event has occurred and is
continuing, specifying each such event known to him and the nature and
status thereof.

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SECTION 1006. Waiver of Certain Covenants.

The Company may omit in any particular instance to comply with any term,
provision or condition set forth in Sections 1004 with respect to the
Securities of any series if before the time for such compliance the Holders of
at least 66 % in principal amount of the Outstanding Securities of such series
shall, by Act of such Holders, either waive such compliance in such instance
or generally waive compliance with such term, provision or condition and,
until such waiver shall become effective, the obligations of the Company and
the duties of the Trustee in respect of any such term, provision or condition
shall remain in full force and effect.

ARTICLE ELEVEN

REDEMPTION OF SECURITIES

SECTION 1101. Applicability of Article.

Securities of any series which are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 301 for Securities of any
series) in accordance with this Article or Article Twelve.

SECTION 1102. Election to Redeem; Notice to Trustee.

The election of the Company to redeem any Securities shall be evidenced
by a Board Resolution. In case of any redemption at the election of the
Company of less than all the Securities of any series, the Company shall, at
least 60 days prior to the Redemption Date fixed by the Company (unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee of
such Redemption Date and of the principal amount of Securities of such series
to be redeemed. In the case of any redemption of Securities at the election
of the Company prior to the expiration of any restriction on redemptions
provided in the terms of such Securities or elsewhere in this Indenture, the
Company shall furnish the Trustee with an Officers' Certificate evidencing
compliance with such restriction.

SECTION 1103. Selection by Trustee of Securities to be Redeemed.

If less than all the Securities of any series are to be redeemed, the
particular Securities to be redeemed shall be selected not more than 60 days
prior to the Redemption Date by the Trustee, from the Outstanding Securities
of such series not previously called for redemption, by such method as the
Trustee shall deem fair and appropriate and which may provide for the
selection for redemption of portions (equal to the minimum authorized
denomination for Securities of that series or any integral multiple thereof)
of the principal amount of Securities of such series of a denomination larger
than the minimum authorized denomination for Securities of that series.

The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption and, in the case of any Securities selected
for partial redemption, the principal amount thereof to be redeemed.

For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall
relate, in the case of any Securities redeemed or to be redeemed only in part,
to the portion of the principal amount of such Securities which has been or is
to be redeemed.

SECTION 1104. Notice of Redemption.

Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption
Date, to

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each Holder of Securities to be redeemed, at his address appearing in
the Security Register.

All notices of redemption shall state:

(1) the Redemption Date,

(2) the Redemption Price and the amount of any accrued interest to
the Redemption Date,

(3) if less than all the Outstanding Securities of any series are
to be redeemed, the identification (and, in the case of partial
redemption, the principal amounts) of the particular Securities to be
redeemed,

(4) that on the Redemption Date, the Redemption Price will become
due and payable upon each such Security to be redeemed and, if
applicable, that interest thereon will cease to accrue on and after said
date,

(5) the place or places where such Securities are to be
surrendered for payment of the Redemption Price and any accrued interest
to the Redemption Date, and

(6) that the redemption is for a sinking fund, if such is the
case.

Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.

SECTION 1105. Deposit of Redemption Price.

Prior to any Redemption Date, the Company shall deposit with the Trustee
or with a Paying Agent (or, if the Company is acting as its own Paying Agent,
segregate and hold in trust as provided in Section 1003) an amount of money
sufficient to pay the Redemption Price of, and (except if the Redemption Date
shall be an Interest Payment Date) accrued interest on, all the Securities
which are to be redeemed on that date.

SECTION 1106. Securities Payable on Redemption Date.

Notice of redemption having been given as aforesaid, the Securities to
be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security
shall be paid by the Company at the Redemption Price, together with accrued
interest to the Redemption Date; provided, however, that installments of
interest whose Stated Maturity is on or prior to the Redemption Date shall be
payable to the Holders of such Securities, or one or more Predecessor
Securities, registered as such at the close of business on the relevant Record
Dates according to their terms and the provisions of Section 307.

If any Security called for redemption shall not be so paid upon
surrender therefor for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate prescribed
therefor in the Security.

SECTION 1107. Securities Redeemed in Part.

Any Security which is to be redeemed only in part shall be surrendered
at a Place of Payment therefor (with, if the Company or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the

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<PAGE>
Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing) and the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Security without
service charge, a new Security or Securities of the same series, of any
authorized denomination as required by such Holder, in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal
of the Security so surrendered.

ARTICLE TWELVE

SINKING FUNDS

SECTION 1201. Applicability of Article.

The provisions of this Article shall be applicable to any sinking fund
for the retirement of Securities of a series except as otherwise specified as
contemplated by Section 301 for Securities of such series.

The minimum amount of any sinking fund payment provided for by the terms
of Securities of any series is herein referred to as a "mandatory sinking fund
payment", and any payment in excess of such minimum amount provided for by the
terms of Securities of any series is herein referred to as an "optional
sinking fund payment." If provided for by the terms of Securities of any
series, the cash amount of any sinking fund payment may be subject to
reduction as provided in Section 1202. Each sinking fund payment shall be
applied to the redemption of Securities of any series as provided for by the
terms of Securities of such series.

SECTION 1202. Satisfaction of Sinking Fund Payments With Securities.

The Company (1) may deliver Outstanding Securities of a series (other
than any previously called for redemption) and (2) may apply as a credit
Securities of a series which have been redeemed either at the election of the
Company pursuant to the terms of such Securities or through the application of
permitted optional sinking fund payments pursuant to the terms of such
Securities, in each case in satisfaction of all or any part of any sinking
fund payment with respect to the Securities of such series required to be made
pursuant to the terms of such Securities as provided for by the terms of such
Series; provided, that such Securities have not been previously so credited.
Such Securities shall be received and credited for such purpose by the Trustee
at the Redemption Price specified in such Securities for redemption through
operation of the sinking fund and the amount of such sinking fund payment
shall be reduced accordingly.

SECTION 1203. Redemption of Securities for Sinking Fund.

Not less than 60 days prior to each sinking fund payment date for any
series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
that series pursuant to the terms of that series, the portion thereof, if any,
which is to be satisfied by payment of cash and the portion thereof, if any,
which is to be satisfied by delivering and crediting Securities of that series
pursuant to Section 1202 and will also deliver to the Trustee any Securities
to be so delivered. Not less than 30 days before each such sinking fund
payment date the Trustee shall select the Securities to be redeemed upon such
sinking fund payment date in the manner specified in Section 1103 and cause
notice of the redemption thereof to be given in the name of and at the expense
of the Company in the manner provided in Section 1104. Such notice having
been duly given, the redemption of such Securities shall be made upon the
terms and in the manner stated in Sections 1106 and 1107.

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<PAGE>

ARTICLE THIRTEEN

SUBORDINATION OF SECURITIES

SECTION 1301. Agreement to Subordinate.

The Company, for itself, its successors and assigns, covenants and
agrees, and each Holder of a Security likewise covenants and agrees by his
acceptance thereof, that the obligation of the Company to make any payment on
account of the principal of (and premium, if any) and interest on each and all
of the Securities shall be subordinate and junior in right of payment to the
Company's obligations to the holders of Senior Indebtedness and, under the
circumstances described in clause (ii) of this sentence, to the holders of
Additional Senior Obligations, to the extent provided herein, and that in the
case of any insolvency, receivership, conservatorship, reorganization,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings or any liquidation or winding-up of or relating to the Company as
a whole, whether voluntary or involuntary, (i) all obligations to holders of
Senior Indebtedness shall be entitled to be paid in full before any payment
shall be made on account of the principal of (and premium, if any) or interest
on the Securities and, (ii) if after giving effect to the operation of clause
(i) above, (A) any amount of cash, property or securities remains available
for payment or distribution in respect of the Securities ("Excess Proceeds")
and (B) creditors in respect of Additional Senior Obligations have not
received payment in full of amounts due or to become due thereon or payment of
such amounts have not been duly provided for, then such Excess Proceeds shall
first be applied to pay or provide for the payment in full of all such
Additional Senior Obligations before any payment shall be made on account of
the principal of (and premium, if any) or interest on the Securities. In the
event of any such proceeding, after payment in full of all sums owing with
respect to Senior Indebtedness and Additional Senior Obligations, the Holders
of the Securities, together with the holders of any obligations of the Company
Ranking on a Parity with the Securities, shall be entitled to be paid from the
remaining assets of the Company the amounts at the time due and owing on
account of unpaid principal of (and premium, if any) and interest on the
Securities before any payment or other distribution, whether in cash, property
or otherwise, shall be made on account of any capital stock or any obligations
of the Company Ranking Junior to the Securities. In addition, in the event of
any such proceeding, if any payment or distribution of assets of the Company
of any kind or character, whether in cash, property or securities, including
any such payment or distribution which may be payable or deliverable by reason
of the payment of any other indebtedness of the Company being subordinated to
the payment of the Securities, shall be received by the Trustee or the Holders
of the Securities before all Senior Indebtedness and Additional Senior
Obligations are paid in full and if the Holder or the Trustee, as the case may
be, receiving such payment is aware at the time of receipt that all Senior
Indebtedness and Additional Senior Obligations have not been paid in full,
then such payment or distribution shall, if received by any Holder, be held in
trust for the benefit of the holders of Senior Indebtedness and/or Additional
Senior Obligations, as the case may be or, if received by the Trustee, shall
be held by it and delivered forthwith to the trustee in bankruptcy, receiver,
assignee, agent or other Person making payment or distribution of the assets
of the Company, and, in each case, shall be applied to the payment of all
Senior Indebtedness and Additional Senior Obligations remaining unpaid, until
all such Senior Indebtedness and Additional Senior Obligations shall have been
paid in full, after giving effect to any concurrent payment or distribution to
the holders of such Senior Indebtedness and Additional Senior Obligations.
For purposes of this paragraph only, the words, "cash, property or securities"
shall not be deemed to include shares of stock of the Company as reorganized
or readjusted, or securities of the Company or any other company provided for
by a plan of reorganization or readjustment which are subordinated in right of
payment to all Senior Indebtedness and Additional Senior Obligations which may
at the time be outstanding to substantially the same extent

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<PAGE>

as, or to a greater extent than, the Securities are so subordinated as
provided in this Article.

The subordination provisions of the foregoing paragraph shall not be
applicable to amounts at the time due and owing on the Securities on account
of the unpaid principal of (and premium, if any) or interest on the Securities
for the payment of which funds have been deposited in trust with the Trustee
or have been set aside by the Company in trust in accordance with the
provisions of this Indenture; nor shall such provisions impair any rights,
interests, remedies or powers of any secured creditor of the Company in
respect of any security the creation of which is not prohibited by the
provisions of this Indenture.

If there shall have occurred and be continuing (a) a default in any
payment with respect to any Senior Indebtedness or (b) an event of default
with respect to any Senior Indebtedness as a result of which the maturity
thereof is accelerated, unless and until such payment default or event of
default shall have been cured or waived or shall have ceased to exist, no
payments shall be made by the Company with respect to the principal of (or
premium, if any) or interest on the Securities. The provisions of this
paragraph shall not apply to any payment with respect to which the first
paragraph of this Section would be applicable.

The securing of any obligations of the Company Ranking on a Parity with
the Securities or obligations Ranking Junior to the Securities shall not be
deemed to prevent such obligations from constituting obligations of the
Company Ranking on a Parity with the Securities or obligations Ranking Junior
to the Securities.

The consolidation of the Company with, or the merger of the Company
into, another Person or the liquidation or dissolution of the Company
following the conveyance or transfer of its properties and assets
substantially as an entirety to another Person upon the terms and conditions
set forth in Article Eight shall not be deemed a dissolution, winding-up,
liquidation, reorganization, assignment for the benefit of creditors or
marshalling of assets and liabilities of the Company for the purposes of this
Section if the Person formed by such consolidation or into which the Company
is merged or the Person which acquires by conveyance or transfer such
properties and assets substantially as an entirety, as the case may be, shall,
as a part of such consolidation, merger, conveyance, or transfer, comply with
the conditions set forth in Article Eight.

SECTION 1302. Obligation of the Company Unconditional.

Nothing contained in this Article or elsewhere in this Indenture is
intended to or shall impair, as between the Company and the Holders of the
Securities, the obligation of the Company, which is absolute and
unconditional, to pay the Holders of the Securities the principal of (and
premium, if any) and interest on the Securities when, where and as the same
shall become due and payable, all in accordance with the terms of the
Securities, or is intended to or shall affect the relative rights of the
Holders of the Securities and creditors other than the holders of Senior
Indebtedness and Additional Senior Obligations, nor shall anything herein or
therein prevent the Trustee or the Holder of any Security from exercising all
remedies otherwise permitted by applicable law upon an Event of Default under
this Indenture, subject to the rights, if any, under this Article of the
holders of Senior Indebtedness and Additional Senior Obligations in respect of
cash, property, or securities of the Company received upon the exercise of any
such remedy.

SECTION 1303. Notice to Trustee of Facts Prohibiting Payment.

The Company shall give prompt written notice to a Responsible Officer of
the Trustee located at the Corporate Trust Office of any fact known to the
Company which would prohibit the making of any payment to or by the Trustee in
respect of the Securities. Notwithstanding the provisions of this Article or
any other provision of this Indenture, the Trustee shall not be charged with

50
<PAGE>

knowledge of the existence of any facts which would prohibit the making of any
payment to or by the Trustee in respect of the Securities, unless and until
the Trustee shall have received at its Corporate Trust Office written notice
thereof from the Company or a holder of Senior Indebtedness or Additional
Senior Obligations or from any trustee therefor, and, prior to the receipt of
any such written notice, the Trustee, subject to the provisions of Section
601, shall be entitled in all respects to assume that no such facts exist;
provided, however, that if the Trustee shall not have received the notice
provided for in this Section at least three Business Days prior to the date
upon which by the terms hereof any money may become payable for any purpose
(including, without limitation, the payment of the principal of (and premium,
if any) or interest on any Security), then, anything herein contained to the
contrary notwithstanding, the Trustee shall have full power and authority to
receive such money and to apply the same to the purpose for which such money
was received and shall not be affected by any notice to the contrary which may
be received by it during or after such three Business Day period.

Subject to the provisions of Section 601, the Trustee shall be entitled
to rely on the delivery to it of a written notice by a Person representing
himself to be a holder of Senior Indebtedness or Additional Senior Obligations
(or a trustee therefor) to establish that such notice has been given by a
holder of Senior Indebtedness or Additional Senior Obligations (or a trustee
therefor). In the event that the Trustee determines in good faith that
further evidence is required with respect to the right of any Person as a
holder of Senior Indebtedness or Additional Senior Obligations to participate
in any payment or distribution pursuant to this Article, the Trustee may
request such Person to furnish evidence to the reasonable satisfaction of the
Trustee as to the amount of Senior Indebtedness or Additional Senior
Obligations held by such Person, the extent to which such Person is entitled
to participate in such payment or distribution and any other facts pertinent
to the rights of such Person under this Article, and if such evidence is not
furnished, the Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment.

SECTION 1304. Application by Trustee of Moneys Deposited With It.

Anything in this Indenture to the contrary notwithstanding, any deposit
of moneys by the Company with the Trustee or any other agent (whether or not
in trust) for any payment of the principal of (and premium, if any) or
interest on any Securities shall, except as provided in Section 1303, be
subject to the provisions of Section 1301.

SECTION 1305. Subrogation to Rights of Holders of Senior Indebtedness and
Additional Senior Obligations.

Subject to the payment in full of all Senior Indebtedness and Additional
Senior Obligations, the Holders of the Securities shall be subrogated to the
rights of the holders of Senior Indebtedness and the rights of holders of
Additional Senior Obligations to receive payments or distributions of assets
of the Company applicable to such Senior Indebtedness or Additional Senior
Obligations, as the case may be, until the principal of (and premium, if any)
and interest on the Securities shall be paid in full. For purposes of such
subrogation, none of the payments or distributions to the holders of the
Senior Indebtedness or to the holders of Additional Senior Obligations to
which the Holders of the Securities or the Trustee would be entitled except
for the provisions of this Article, or of payments over pursuant to the
provisions of this Article to the holders of Senior Indebtedness or to the
holders of Additional Senior Obligations by Holders of the Securities or the
Trustee shall, as among the Company, its creditors other than holders of
Senior Indebtedness, holders of Additional Senior Obligations and the Holders
of the Securities, be deemed to be a payment or distribution by the Company to
or on account of the Senior Indebtedness or the Additional Senior Obligations,
as the case maybe; it

51
<PAGE>

being understood that the provisions of this Article are and are intended
solely for the purpose of defining the relative rights of the
Holders of the Securities, on the one hand, and the holders of the Senior
Indebtedness and the holders of Additional Senior Obligations on the other
hand.

SECTION 1306. Subordination Rights Not Impaired by Acts or Omissions of
Company, Holders of Senior Indebtedness or Holders of
Additional Senior Obligations.

No right of any present or future holders of any Senior Indebtedness or
Additional Senior Obligations to enforce subordination as herein provided
shall at any time in any way be prejudiced or impaired by any act or failure
to act on the part of the Company or any act or failure to act, in good faith,
by any such holder, or by any noncompliance by the Company with the terms,
provisions and covenants of this Indenture, regardless of any knowledge
thereof which any such holder may have or be otherwise charged with.

SECTION 1307. Authorization of Trustee to Effectuate Subordination of
Securities.

Each Holder of a Security, by his acceptance thereof, authorizes and
expressly directs the Trustee on his behalf to take such actions as may be
necessary or appropriate to effectuate the subordination provided in this
Article and appoints the Trustee his attorney-in-fact for any and all such
purposes.

If, in the event of any proceeding or other action relating to the
Company referred to in the first sentence of Section 1301, a proper claim or
proof of debt in the form required in such proceeding or action is not filed
by or on behalf of the Holders of the Securities prior to fifteen days before
the expiration of the time to file such claim or claims, then the holder or
holders of Senior Indebtedness and Additional Senior Obligations shall have
the right to file and are hereby authorized to file appropriate claim for and
on behalf of the Holders of the Securities; provided, that no such filing by
any holders of Senior Indebtedness or Additional Senior Obligations shall
preclude the Trustee from filing such a proof of claim on behalf of the
Holders of Securities.

SECTION 1308. Right of Trustee to Hold Senior Indebtedness and Additional
Senior Obligations.

The Trustee is its individual capacity shall be entitled to all of the
rights sets forth in this Article in respect of any Senior Indebtedness or
Additional Senior Obligations at any time held by it in its individual
capacity to the same extent as any other holder of such Senior Indebtedness or
Additional Senior Obligations, and nothing in this Indenture shall be
construed to deprive the Trustee of any of its rights as such holder. Nothing
in this Article shall subordinate to Senior Indebtedness or Additional Senior
Obligations the claims of the Trustee under Section 607.

SECTION 1309. Article Thirteen Not to Prevent Events of Default.

The failure to make a payment pursuant to the Securities by reason of
any provision in this Article shall not be construed as preventing the
occurrence of an Event of Default.

SECTION 1310. Article Applicable to Paying Agents.

In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article shall in such case (unless the content otherwise
requires) be construed as extending to and including such Paying Agent within
its meaning as fully for all intents and purposes as if such Paying Agent were
named in this Article in addition to or in place of the Trustee; provided,
however, that

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<PAGE>

Section 1308 shall not apply to the Company or any Affiliate of the Company
if it or such Affiliate acts as Paying Agent.

SECTION 1311. Reliance on Judicial Order or Certificate of Liquidating Agent.

Upon any payment or distribution of assets of the Company referred to in
this Article, the Trustee, subject to the provisions of Section 601, and the
Holders of the Securities shall be entitled to rely upon any order or decree
entered by any court of competent jurisdiction in which such insolvency,
bankruptcy, receivership, liquidation, reorganization, dissolution, winding-up
or similar case or proceeding is pending, or a certificate of the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee for the benefit
of creditors, agent or other Person making such payment or distribution,
delivered to the Trustee or to the Holders of Securities for the purpose of
ascertaining the Persons entitled to participate in such payment or
distribution, the holders of the Senior Indebtedness, Additional Senior
Obligations and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all
other facts pertinent thereto or to this Article.

SECTION 1312. Trustee Not Fiduciary for Holders of Senior Indebtedness or
Holders of Additional Senior Obligations.

The Trustee shall not be deemed to owe any fiduciary duty to the holders
of Senior Indebtedness or the holders of Additional Senior Obligations and
shall not be liable to any such holders if it shall in good faith mistakenly
pay over or distribute to Holders of Securities or to the Company or to any
other Person, cash, property or securities to which any holders of Senior
Indebtedness or Additional Senior Obligations shall be entitled by virtue of
this Article or otherwise.

SECTION 1313. Payment Permitted If No Default.

Nothing contained in this Article or elsewhere in this Indenture or in
any of the Securities shall prevent the Company, at any time except during the
case of any insolvency, receivership, conservatorship, reorganization,
readjustment or debt, marshalling of assets and liabilities or similar
proceedings or any liquidation or winding-up of or relating to the Company
referred to in Section 1301 from making payments at any time of principal of
(and premium, if any) or interest on the Securities.

ARTICLE FOURTEEN

HOLDERS' MEETINGS

SECTION 1401. Purposes for Which Meetings May be Called.

A meeting of Holders may be called at any time and from time to time
pursuant to the provisions of this Article for any of the following purposes:

(1) to give any notice to the Company or to the Trustee, or to
give any direction to the Trustee, or to waive or consent to the waiving
of any Event of Default hereunder and its consequences, or to take any
other action authorized to be taken by Holders pursuant to any of the
provisions of Article Five;

(2) to remove the Trustee or appoint a successor trustee, pursuant
to the provisions of Article Six;

(3) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Sections 901 and 902;
or

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<PAGE>

(4) to take any other action authorized to be taken by or on
behalf of the Holders of any specified aggregate principal amount of the
Securities under any other provision of this Indenture or under
applicable law.

SECTION 1402. Manner of Calling Meetings.

The Trustee may at any time call a meeting of Holders to take any action
specified in Section 1401. Notice of every meeting of the Holders, setting
forth the time and the place of such meeting and in general terms the action
proposed to be taken at such meeting, shall be mailed by the Trustee to the
Company and to the Holders not less than 20 nor more than 60 days prior to the
date fixed for the meeting. Any meeting shall be valid without notice if the
Holders of all of the Outstanding Securities are present in person or by
proxy, or if notice is waived before or after the meeting by the Holders of
all of the Outstanding Securities, and if the Company and the Trustee are
either present or have, before or after the meeting, waived notice.

SECTION 1403. Call of Meetings by Company or Holders.

In case at any time the Company, pursuant to a resolution of its Board
of Directors, or the Holders of not less than 30% in aggregate principal
amount of the Outstanding Securities, shall have requested the Trustee to call
a meeting of Holders to take any action authorized in Section 1401 by written
request setting forth in reasonable detail the action proposed to be taken at
the meeting, and the Trustee shall not have mailed notice of such meeting
within 20 days after receipt of such request, then the Company or such Holders
in the amount above specified may determine the time and the place in
Nashville, Tennessee, or in Greenville, South Carolina, for such meeting and
may call such meeting to take any action authorized in Section 1401, by
mailing notice thereof as provided in Section 1402.

SECTION 1404. Who May Attend and Vote at Meetings.

To be entitled to vote at any meeting of Holders a person shall (a) be a
Holder of one or more Securities with respect to which the meeting is being
held, or (b) be a person appointed by an instrument in writing as proxy by
such Holder of one or more Securities. The only persons who shall be entitled
to be present or to speak at any meeting of Holders shall be the persons
entitled to vote at such meeting and their counsel and any representatives of
the Trustee and its counsel and any representatives of the Company and its
counsel.

SECTION 1405. Regulations May be Made by Trustee.

Notwithstanding any other provisions of this Indenture, the Trustee may
make such reasonable regulations as it may deem advisable for any meeting of
Holders, in regard to proof of the holding of Securities and of the
appointment of proxies, and in regard to the appointment and duties of
inspectors of votes, the submission and examination of proxies, certificates
and other evidence of the right to vote, and such other matters concerning the
conduct of the meeting as it shall deem appropriate.

At any meeting each Holder or proxy shall be entitled to one vote for
each $1,000 principal amount of Outstanding Securities held or represented by
him.

SECTION 1406. Evidence of Actions by Holders.

Whenever the Holders of a specified percentage in aggregate principal
amount of the Securities may take any action, the fact that the Holders of
such percentage have acted may be evidence by (a) instruments of similar tenor
executed by Holders in person or by attorney or written proxy, or (b) the
Holders voting in favor thereof at any meeting of Holders called and held in
accordance

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<PAGE>

with the provisions of the rules for meetings of Holders, or (c) by
a combination thereof. The Trustee may require proof of any matter concerning
the execution of any instrument by a Holder or his attorney or proxy as it
shall deem necessary.

SECTION 1407. Exercise of Rights of Trustee and Holders Not to be Hindered or
Delayed.

Nothing in this Article contained shall be deemed or construed to
authorize or permit, by reason of any call of a meeting of Holders or any
rights expressly or impliedly conferred hereunder to make such call, any
hindrance or delay in the exercise of any right or rights conferred upon or
reserved to the Trustee or to the Holders under any of the provisions of this
Indenture or of the Securities.

This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.

IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.

CAROLINA FIRST CORPORATION

By:
[Seal]

Attest:

__________________________,
as Trustee

By:
[Seal]

Attest:

State of )
County of ) ss:

On the day of , 1995, before me personally came
, to me known, who, being by me duly sworn, did depose and
say that is of Carolina First Corporation, one of the corporations
described in and which executed the foregoing instrument; that knows
the seal of said corporation; that the seal affixed to said instrument is such
corporate seal; that it was so affixed by authority of the Board of Directors
of said corporation, and that signed name thereto by like
authority.

Notary Public,
My Commission Expires ,199

55
<PAGE>

State of )
County of ) ss.:

On the day of , 1995, before me personally came
, to me known, who, being by me duly sworn, did depose
and say thatis a of ____________________, one of
the corporations described in and which executed the foregoing instrument;
that knows the seal of said corporation; that the seal affixed to
said instrument is such corporate seal; that it was so affixed by authority of
the Board of Directors of said corporation, and that signed
name thereto by like authority.

Notary Public,
My Commission Expires ,199
56

EXHIBIT 4.12

THIS SECURITY IS NOT A DEPOSIT AND IS NOT INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION OR ANY GOVERNMENTAL AGENCY.

CAROLINA FIRST CORPORATION
% SUBORDINATED NOTES
DUE SEPTEMBER 1, 2005

No. $

Carolina First Corporation, a South Carolina corporation
(hereinafter called the "Company", which term includes any successor
corporation under the Indenture hereinafter referred to), for value
received, hereby promises to pay to , or registered
assigns, the principal sum of Dollars on ,
and to pay interest thereon from , or from the most recent
Interest Payment Date to which interest has been paid or duly provided
for, quarterly on the first day of March, June, September and December
in each year, commencing September 1, 1995, at the rate of %
per annum, until the principal hereof is paid or made available for
payment, and (to the extent that the payment of such interest shall be
legally enforceable) at such rate on any overdue instalment of interest.
The interest so payable, and punctually paid or duly provided
for, on any Interest Payment Date will, as provided in such Indenture,
be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on the
Regular Record Date for such interest, which shall be the 15th day of
the month or (whether or not a Business Day), as the case may be,
immediately preceding such Interest Payment Date. Any such interest not
so punctually paid or duly provided for will forthwith cease to be
payable to the Holder on such Regular Record Date and may either be paid
to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on a Special Record
Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Securities of this
series not less than 10 days prior to such Special Record Date, or be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities of this
series may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in said Indenture.

Payment of the principal of and interest on this Security will be
made at the offices or agencies of the Company maintained for that
purpose in United States Dollars; provided, however, that at the option
of the Company payment of interest may be made by check drawn upon any
Paying Agent and mailed on or prior to an Interest Payment Date to the
address of the Person entitled thereto as such address shall appear in
the Security Register.

REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS SECURITY
SET FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL
PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.

Unless the certificate of authentication hereon has been executed
by the Trustee referred to on the reverse hereof, directly or through an
authenticating agent, by the manual signature of an authorized signer,
this Security shall not be entitled to any benefit under the Indenture
or be valid or obligatory for any purpose.

IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed under its corporate seal. Dated:

CAROLINA FIRST CORPORATION

By:
[Seal]

Attest:

<PAGE>

Form of Reverse of Security.

This Security is one of a duly authorized issue of securities of
the Company (herein called the "Securities"), issued and to be issued in
one or more series under an Indenture, dated as of April 1, 1995 (herein
called the "Indenture") between the Company and First American National
Bank, N.A., as Trustee (herein called the "Trustee", which term
includes any successor trustee under the Indenture), to which Indenture
and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee, the holders of Senior
Indebtedness, the holders of Additional Senior Obligations and the
Holders of the Securities and of the terms upon which the Securities
are, and are to be, authenticated and delivered. This Security is one of
the series designated on the face hereof, limited in aggregate
principal amount to $ .

The Company will provide a copy of the Indenture to any
Holder or beneficial owner, upon written or oral request to the Company
at its principal offices at 102 South Main Street, Greenville, SC 29601;
Attn: Chief Financial Officer (803) 255-7900.

The Securities of this series are subject to redemption upon not
less than 30 days notice by mail, at any time on or after September 1,
2000, as a whole or in part, at the election of the Company, at a
Redemption Price equal to 100% of the principal amount, together in the
case of any such redemption with accrued interest to the Redemption
Date, but interest instalments whose Stated Maturity is on or prior to
such Redemption Date will be payable to the Holders of such Securities,
or one or more Predecessor Securities, of record at the close of
business on the relevant Record Dates referred to on the face hereof,
all as provided in the Indenture.

2
<PAGE>

In the event of redemption of this Security in part only, a new
Security or Securities of this series for the unredeemed portion hereof
will be issued in the name of the Holder hereof upon the cancellation
hereof.

In any case where any Interest Payment Date, Redemption Date or
Stated Maturity of any Security shall not be a Business Day at any Place
of Payment, then (notwithstanding any other provision of the Indenture
or of this Security) payment of interest or principal (and premium, if
any) need not be made at such Place of Payment on such date, but may be
made on the next succeeding Business Day at such Place of Payment with
the same force and effect as if made on the Interest Payment Date or
Redemption Date, or at the Stated Maturity, provided that no interest
shall accrue for the period from and after such Interest Payment Date,
Redemption Date or Stated Maturity, as the case may be.

The indebtedness evidenced by this Security is unsecured and, to
the extent provided in the Indenture, subordinate and subject in right
of payment to the prior payment in full of all Senior Indebtedness and,
under certain circumstances, to Additional Senior Obligations, and this
Security is issued subject to the provisions of the Indenture with
respect thereto. Each Holder of this Security, by accepting the same,
(a) agrees to and shall be bound by such provisions and (b) authorizes
and directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination so provided.

If a Bankruptcy Event of Default (as defined in the Indenture) with
respect to the Company shall occur and be continuing, the principal of
the Securities of this series may be declared due and payable in the
manner and with the effect provided in the Indenture.

The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations
of the Company and the rights of the Holders of the Securities of each
series to be affected under the Indenture at any time by the Company and
the Trustee with the consent of the Holders of 66 2/3% in principal amount
of the Securities at the time Outstanding of each series to be affected.
The Indenture also contains provisions permitting the Holders of
specified percentages in aggregate principal amount of the Securities of
each series at the time Outstanding, on behalf of the Holders of all
Securities of such series, to waive compliance by the Company with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the
Holder of this Security shall be conclusive and binding upon such Holder
and upon all future Holders of this Security and of any Security issued
upon the registration of transfer hereof or in exchange herefor or in
lieu hereof, whether or not notation of such consent or waiver is made
upon this Security.

No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of
and interest on this Security at the times, place and rate, and in the
coin or currency, herein prescribed.

As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the
Security Register, upon surrender of this Security for registration of
transfer at the office or agency of the Company in any place where the
principal of and interest on this Security are payable, duly endorsed
by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed by,
the Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Securities of this series, of authorized
denominations and for the same aggregate principal amount,
will be issued to the designated transferee or transferees.

The Securities of this series are issuable only in registered form
without coupons in denominations of $1,000 and any integral multiple
thereof. As provided in the Indenture and subject to certain limitations
therein set forth, Securities of this series are exchangeable for a like
aggregate principal amount of Securities of this series of a different
authorized denomination, as requested by the Holder surrendering the
same.

No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge

<PAGE>

payable in connection therewith.

The Indenture provides that a Subsidiary may assume the obligations
of the Company under the Indenture and the Securities, subject to the
satisfaction of certain conditions, including the Company's guaranteeing
of the Subsidiary's obligations under this Security and the Indenture.

Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name this Security is registered
as the owner hereof for all purposes, whether or not this Security shall
be overdue, and neither the Company, the Trustee nor any such agent
shall be affected by notice to the contrary.

All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.

TRUSTEE'S CERTIFICATE OF AUTHENTICATION

This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.

FIRST AMERICAN NATIONAL BANK, N.A.
as Trustee

By
Authorized Signature

4
<PAGE>

EXHIBIT 5.1

April 28, 1995

Carolina First Corporation
102 South Main Street
Greenville, South Carolina 29601

RE: Registration Statement on Form S-3 with respect to
Subordinated Notes Due 2005 of Carolina First
Corporation

Gentlemen/Ladies:

The opinions set forth herein are rendered with respect to
(i) the Subordinated Notes Due 2005 (the "Notes") of Carolina
First Corporation, a South Carolina corporation (the "Company"),
which may be issued by the Company in connection with a public
offering (the "Offering") registered with the Securities and
Exchange Commission (the "Commission") by the Company's
Registration Statement on Form S-3, as amended, (the
"Registration Statement") filed on or about the date hereof,
pursuant to the Securities Act of 1933, as amended.

We have examined the Company's Articles of Incorporation,
as amended, and the Company's Bylaws, as amended, and reviewed
the records of the Company's corporate proceedings. We have
made such investigation of law as we have deemed necessary in
order to enable us to render this opinion. With respect to
matters of fact, we have relied upon information provided to us
by the Company and have made no further investigation. With
respect to all examined documents, we have assumed the
genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to authentic
originals of all documents submitted to us as certified,
conformed or photostatic copies and the accuracy and
completeness of the information contained therein.

Based on and subject to the foregoing and subject to the
comments, limitations and qualifications set forth below, we
opine as follows:

<PAGE>

The Notes to be sold pursuant to the Registration Statement
will, when sold, be legally and validly issued and fully
paid and non-assessable and will be binding obligations of
the Company.

This opinion is subject to the condition that, prior to the
filing of the final prospectus in connection with the Offering,
the Company's Board of Directors will be required to make a
further authorization of the issuance by the Company of the
shares to be issued by it in connection with the Offering.

The foregoing opinion is limited to matters governed by the
laws of the State of South Carolina in force on the date of this
letter. We express no opinion with regard to any matter which
may be (or purports to be) governed by the laws of any other
state or jurisdiction. In addition, we express no opinion with
respect to any matter arising under or governed by the South
Carolina Uniform Securities Act, as amended, or any law
respecting disclosure.

This opinion is rendered as of the date of this letter and
applies only to the matters specifically covered by this
opinion, and we disclaim any continuing responsibility for
matters occurring after the date of this letter.

We consent to the use of this opinion as an exhibit to the
Registration Statement.

Yours truly,

Wyche, Burgess, Freeman & Parham, P.A.

By: /s/ William P. Crawford, Jr.

William P. Crawford, Jr.

<PAGE>

<PAGE>
EXHIBIT 11.1
CAROLINA FIRST CORPORATION
COMPUTATION OF PRIMARY AND FULLY DILUTED EARNINGS PER SHARE
(ALL AMOUNTS, EXCEPT SHARE DATA, IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, 1995
<S> <C>
PRIMARY
Net income applicable to common shareholders............................................................. $ 1,687
Shares:
Weighted average number of outstanding common shares................................................... 5,056,582
Primary earnings per common share...................................................................... $ 0.33
FULLY DILUTED
Net income applicable to common shareholders............................................................. $ 1,687
Dividends on preferred stock............................................................................. 727
Net income.......................................................................................... $ 2,414
Shares:
Weighted average number of outstanding common shares................................................... 5,056,582
Weighted average common share equivalents from preferred stock......................................... 2,933,056
Total common share equivalents...................................................................... 7,989,638
Fully diluted earnings per share......................................................................... $ 0.30
</TABLE>

<PAGE>
EXHIBIT 12.1
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
FIRST QUARTER
1990 1991 1992 1993 1994 1994 1995
<S> <C> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
EARNINGS:
Income from continuing operations before
income taxes................................. $ 1,862 $ 2,192 $ 3,543 $ 7,221 $(2,224) $1,970 $ 3,651
ADD:
(a) Fixed charges............................... 23,415 24,825 22,469 23,424 31,530 6,358 10,190
(b) Amortization of previously capitalized
interest..................................... 1 4 8 8 8 2 2
DEDUCT:
(a) Interest capitalized during year............ (95) (122)
Earnings, for computation purposes................ $25,183 $26,899 $26,020 $30,653 $29,314 $8,330 $13,843
FIXED CHARGES:
Interest on indebtedness, expenses or cap....... $23,355 $24,729 $22,334 $23,186 $31,151 $6,272 $10,086
Portion of rents representative of the interest
factor....................................... 60 96 135 238 379 86 104
Fixed charges, for computation purposes......... $23,415 $24,825 $22,469 $23,424 $31,530 $6,358 $10,190
Ratio of earnings to fixed charges.............. 1.08x 1.08x 1.16x 1.31x 0.93x 1.31x 1.36x
</TABLE>

<PAGE>
EXHIBIT 21.1
SUBSIDIARIES OF THE REGISTRANT:
Carolina First Bank
Carolina First Mortgage Company

<ARTICLE> 9
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 48,468
<INT-BEARING-DEPOSITS> 1,000
<FED-FUNDS-SOLD> 780
<TRADING-ASSETS> 1,483
<INVESTMENTS-HELD-FOR-SALE> 55,973
<INVESTMENTS-CARRYING> 69,679
<INVESTMENTS-MARKET> 67,782
<LOANS> 877,122
<ALLOWANCE> 7,961
<TOTAL-ASSETS> 1,135,961
<DEPOSITS> 943,108
<SHORT-TERM> 96,107
<LIABILITIES-OTHER> 11,218
<LONG-TERM> 1,162
<COMMON> 5,089
0
36,633
<OTHER-SE> 42,644
<TOTAL-LIABILITIES-AND-EQUITY> 1,135,961
<INTEREST-LOAN> 20,513
<INTEREST-INVEST> 1,632
<INTEREST-OTHER> 106
<INTEREST-TOTAL> 22,251
<INTEREST-DEPOSIT> 8,694
<INTEREST-EXPENSE> 10,085
<INTEREST-INCOME-NET> 12,166
<LOAN-LOSSES> 3,011
<SECURITIES-GAINS> 97
<EXPENSE-OTHER> 10,590
<INCOME-PRETAX> 3,651
<INCOME-PRE-EXTRAORDINARY> 3,651
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,414
<EPS-PRIMARY> 0.33
<EPS-DILUTED> 0.30
<YIELD-ACTUAL> 8.98
<LOANS-NON> 618
<LOANS-PAST> 2,347
<LOANS-TROUBLED> 675
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 5,669
<CHARGE-OFFS> 782
<RECOVERIES> 64
<ALLOWANCE-CLOSE> 7,961
<ALLOWANCE-DOMESTIC> 7,961
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0

</TABLE>