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

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Union Financial Bancshares, Inc.
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(Name of Registrant as Specified in Its Charter)

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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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December 29, 2003

Dear Stockholder:

You are cordially invited to attend the annual meeting of stockholders
of Union Financial Bancshares, Inc. The meeting will be held in the University
of South Carolina Auditorium, Union Campus, 401 East Main Street, Union, South
Carolina on Wednesday, January 28, 2004 at 2:00 p.m., local time.

The notice of annual meeting and proxy statement appearing on the
following pages describe the formal business to be transacted at the meeting.
During the meeting, we will also report on the operations of the Company.
Directors and officers of the Company, as well as a representative of Elliott
Davis, LLC, the Company's independent auditors, will be present to respond to
appropriate questions of stockholders.

It is important that your shares are represented at this meeting,
whether or not you attend the meeting in person and regardless of the number of
shares you own. To make sure your shares are represented, we urge you to
complete and mail the enclosed proxy card. If you attend the meeting, you may
vote in person even if you have previously mailed a proxy card.

We look forward to seeing you at the meeting.

Sincerely,

/s/ Carl L. Mason

Carl L. Mason
CHAIRMAN OF THE BOARD

UNION FINANCIAL BANCSHARES, INC.
203 WEST MAIN STREET
UNION, SOUTH CAROLINA 29379
(864) 427-9000
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

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The annual meeting of stockholders of Union Financial Bancshares, Inc.
(the "Company") will be held in the University of South Carolina Auditorium,
Union Campus, 401 East Main Street, Union, South Carolina on Wednesday, January
28, 2004 at 2:00 p.m., local time, for the following purposes:

1. To elect two directors of the Company;

2. To approve an amendment to the Company's Certificate of
Incorporation increasing the number of authorized shares of
common stock;

3. To ratify the appointment of Elliott Davis, LLC as independent
auditors for the Company for the fiscal year ending December 31,
2004; and

4. To transact any other business that may properly come before the
meeting.

NOTE: The Board of Directors is not aware of any other business to come
before the meeting.

Stockholders of record at the close of business on December 9, 2003 are
entitled to receive notice of and to vote at the meeting and any adjournment or
postponement of the meeting.

Please complete and sign the enclosed form of proxy, which is solicited
by the Board of Directors, and mail it promptly in the enclosed envelope. The
proxy will not be used if you attend the meeting and vote in person.

BY ORDER OF THE BOARD OF DIRECTORS

/s/ Wanda J. Wells

Wanda J. Wells
CORPORATE SECRETARY

Union, South Carolina
December 29, 2003

IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES TO ENSURE A QUORUM. A SELF-ADDRESSED ENVELOPE IS
ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED
STATES.

UNION FINANCIAL BANCSHARES, INC.

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PROXY STATEMENT

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This proxy statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Union Financial Bancshares, Inc. ("Union
Financial" or the "Company") to be used at the annual meeting of stockholders of
the Company. The Company is the holding company for Provident Community Bank,
N.A. ("Provident"). The annual meeting will be held in the University of South
Carolina Auditorium, Union Campus, 401 East Main Street, Union, South Carolina
on Wednesday, January 28, 2004 at 2:00 p.m., local time. This proxy statement
and the enclosed proxy card are being first mailed to stockholders on or about
December 29, 2003.

VOTING AND PROXY PROCEDURE

WHO CAN VOTE AT THE MEETING

You are entitled to vote your Union Financial common stock if the
records of the Company showed that you held your shares as of the close of
business on December 9, 2003. If your shares are held in a stock brokerage
account or by a bank or other nominee, you are considered the beneficial owner
of shares held in "street name" and these proxy materials are being forwarded to
you by your broker or nominee. As the beneficial owner, you have the right to
direct your broker or nominee on how to vote your shares. Your broker or nominee
has enclosed a voting instruction card for you to use in directing the broker or
nominee on how to vote your shares.

As of the close of business on December 9, 2003, a total of 1,969,770
shares of Union Financial common stock were outstanding. Each share of common
stock has one vote. As provided in the Company's Certificate of Incorporation,
record holders of the Company's common stock who acquire beneficial ownership in
excess of 10% of the Company's outstanding shares without the approval of
two-thirds of the Board of Directors are entitled to cast only one-hundredth of
a vote of any shares held in excess of the 10% limit.

ATTENDING THE MEETING

If you are a stockholder of record as of the close of business on
December 9, 2003, you may attend the meeting. However, if you hold your shares
in street name, you will need proof of ownership to be admitted to the meeting.
A recent brokerage statement or a letter from a bank or broker are examples of
proof of ownership. If you want to vote your shares of Union Financial common
stock held in street name in person at the meeting, you will have to get a
written proxy in your name from the broker, bank or other nominee who holds your
shares.

VOTE REQUIRED

The annual meeting will be held if a majority of the outstanding shares
of common stock entitled to vote is represented at the meeting. If you return
valid proxy instructions or attend the meeting in person, your shares will be
counted for purposes of determining whether there is a quorum, even if you
abstain from voting. Broker non-votes also will be counted for purposes for
determining the existence of a quorum. A broker non-vote occurs when a broker,
bank or other nominee holding shares for a beneficial owner does not

vote on a particular proposal because the nominee does not have discretionary
voting power with respect to that item and has not received voting instructions
from the beneficial owner.

In voting on the election of directors, you may vote in favor of all
nominees, withhold votes as to all nominees, or withhold votes as to specific
nominees. There is no cumulative voting for the election of directors. Directors
will be elected by a plurality of the votes cast at the annual meeting. This
means that the nominees receiving the greatest number of votes will be elected.
Votes that are withheld and broker non- votes will have no effect on the outcome
of the election.

In voting on the proposal to amend the Company's Certificate of
Incorporation to increase the number of authorized shares, you may vote in favor
of the proposal, against the proposal or abstain from voting. To be approved,
this matter requires the affirmative vote of a majority of votes eligible to be
cast by stockholders. Abstentions and broker non-votes will have the same effect
as a vote against the proposal.

In voting on the ratification of the appointment of Elliott Davis, LLC
as independent auditors, you may vote in favor of the proposal, against the
proposal or abstain from voting. To be approved, this matter requires the
affirmative vote of a majority of votes cast by stockholders. Abstentions and
broker non-votes will have no effect on the outcome of the vote.

VOTING BY PROXY

This proxy statement is being sent to you by the Board of Directors of
Union Financial for the purpose of requesting that you allow your shares of
Union Financial common stock to be represented at the annual meeting by the
persons named in the enclosed proxy card. All shares of Union Financial common
stock represented at the meeting by properly executed proxies will be voted in
accordance with the instructions indicated on the proxy card. If you sign and
return a proxy card without giving voting instructions, your shares will be
voted as recommended by the Company's Board of Directors. THE BOARD OF DIRECTORS
RECOMMENDS A VOTE "FOR" EACH OF THE NOMINEES FOR DIRECTOR, "FOR" AMENDMENT OF
THE COMPANY'S CERTIFICATE OF INCORPORATION INCREASING THE NUMBER OF AUTHORIZED
SHARES AND "FOR" RATIFICATION OF THE APPOINTMENT OF ELLIOTT DAVIS, LLC AS
INDEPENDENT AUDITORS.

If you are a participant in the Company's Dividend Reinvestment Plan,
the proxy card covers the shares in your account under the Plan, as well as
shares registered in your name.

If any matters not described in this proxy statement are properly
presented at the annual meeting, the persons named in the proxy card will use
their judgment to determine how to vote your shares. This includes a motion to
adjourn or postpone the meeting to solicit additional proxies. If the annual
meeting is postponed or adjourned, your Union Financial common stock may be
voted by the persons named in the proxy card on the new meeting date as well,
unless you have revoked your proxy. The Company does not know of any other
matters to be presented at the meeting.

You may revoke your proxy at any time before the vote is taken at the
meeting. To revoke your proxy you must either advise the Secretary of the
Company in writing before your shares have been voted at the annual meeting,
deliver a later dated proxy, or attend the meeting and vote your shares in
person. Attendance at the annual meeting will not in itself constitute
revocation of your proxy.

If your Union Financial common stock is held in street name, you will
receive instructions from your broker, bank or other nominee that you must
follow to have your shares voted. Your broker or bank may allow you to deliver
your voting instructions via the telephone or the Internet. Please see the
instruction form

that accompanies this proxy statement. If you wish to change your voting
instructions after you have returned your voting instruction form to your broker
or bank, you must contact your broker or bank.

CORPORATE GOVERNANCE

GENERAL

The Company periodically reviews its corporate governance policies and
procedures to ensure that the Company meets the highest standards of ethical
conduct, reports results with accuracy and transparency and maintains full
compliance with the laws, rules and regulations that govern the Company's
operations. As part of this periodic corporate governance review, the Board of
Directors reviews and adopts best corporate governance policies and practices
for the Company.

CODE OF BUSINESS CONDUCT

The Company has adopted a Code of Business Conduct that is designed to
ensure that the Company's directors, executive officers and employees meet the
highest standards of ethical conduct. The Code of Business Conduct requires that
the Company's directors, executive officers and employees avoid conflicts of
interest, comply with all laws and other legal requirements, conduct business in
an honest and ethical manner and otherwise act with integrity and in the
Company's best interest. Under the terms of the Code of Business Conduct,
directors, executive officers and employees are required to report any conduct
that they believe in good faith to be an actual or apparent violation of the
Code of Business Conduct.

As a mechanism to encourage compliance with the Code of Business
Conduct, the Company has established procedures to receive, retain and treat
complaints received regarding accounting, internal accounting controls or
auditing matters. These procedures ensure that individuals may submit concerns
regarding questionable accounting or auditing matters in a confidential and
anonymous manner. The Code of Business Conduct also prohibits the Company from
retaliating against any director, executive officer or employee who reports
actual or apparent violations of the Code of Business Conduct.

MEETINGS OF THE BOARDS OF DIRECTORS

The business of the Company and Provident is conducted through meetings
and activities of their Boards of Directors and their committees. During the
fiscal year ended September 30, 2003, the Board of Directors of the Company held
14 meetings and the Board of Directors of Provident held 12 meetings. No
director attended fewer than 75% of the total meetings of the Boards of
Directors and committees on which such director served.

COMMITTEES OF THE BOARD OF DIRECTORS OF UNION FINANCIAL

AUDIT COMMITTEE. The Audit Committee, consisting of Directors Jordan
(Chairman), Edwards and Graham, meets as needed to select and review the work
performed by the independent auditors and to monitor the Company's internal
audit function and internal control system. The Board of Directors has
determined that each Audit Committee member is independent in accordance with
the listing standards of the Nasdaq Stock Market, Inc. This committee met four
times during the year ended September 30, 2003. The Audit Committee acts under a
written charter adopted by the Board of Directors, a copy of which is attached
hereto as Appendix A.

COMPENSATION COMMITTEE. The Compensation Committee, composed of
Directors Alexander (Chairman), Mason and Wilkins meets as needed to review the
employee wage and benefit packages, hear employee grievances and prepare
employee job descriptions. This committee met one time during the year ended
September 30, 2003. The Compensation Committee acts under a written charter
adopted by the Board of Directors.

CORPORATE GOVERNANCE COMMITTEE. The Company's Governance Committee,
composed of Directors Wilkins (Chairman), Alexander, Jordan, Mason and Neese
(ex-officio) selects nominees for election as directors. The Governance
Committee will accept and consider stockholder nominations that are made
pursuant to timely written notice to the secretary. All recommendations must
include all information necessary for the Governance Committee to fully review
the qualifications and credentials of the candidate. This committee met three
times during the year ended September 30, 2003. The Corporate Governance
Committee acts under a written charter adopted by the Board of Directors.

The Company and Provident also maintain Loan, Asset/Liability,
Investment and Strategic Planning Committees.

DIRECTORS' COMPENSATION

Non-employee members of the Board of Directors of Provident receive a
monthly fee of $900. The Chairman of the Board of Directors receives an
additional monthly fee of $300. Committee members do not receive additional fees
for committee meetings attended. Non-employee members of the Board of Directors
of Union Financial receive an annual retainer of $2,000.

STOCK OWNERSHIP

The following table provides information as of December 9, 2003 with
respect to persons known to Union Financial to be the beneficial owners of more
than 5% of Union Financial's outstanding common stock. A person may be
considered to beneficially own any shares of common stock over which he or she
has, directly or indirectly, sole or shared voting or investing power.

PERCENT OF
NUMBER OF COMMON STOCK
NAME AND ADDRESS SHARES OWNED OUTSTANDING
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Jeffrey L. Gendell
Tontine Financial Partners, L.P. 139,900(1) 7.10%
Tontine Management, L.L.C.
237 Park Avenue, 9th Floor
New York, New York 10017

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(1) Based on information filed in a Schedule 13D with the U.S. Securities and
Exchange Commission on January 13, 2003.

The following table provides information about the shares of Union
Financial common stock that may be considered to be owned by each director or
nominee for director of the Company, by the executive officers of the Company
named in the Summary Compensation Table and by all directors and executive
officers of the Company as a group as of December 9, 2003. Unless otherwise
indicated, each of the named individuals has sole voting power and sole
investment power with respect to the shares shown.

NUMBER OF SHARES THAT
NUMBER OF MAY BE ACQUIRED PERCENT OF
SHARES OWNED WITHIN 60 DAYS BY COMMON STOCK
NAME (EXCLUDING OPTIONS) EXERCISING OPTIONS OUTSTANDING(1)
- ------------------------------------- ------------------- -------------------- ----------------

Mason G. Alexander 13,734(2) 5,050 *

James W. Edwards 5,707 10,500 *

Richard H. Flake 10,920(3) 45,000 2.78%

William M. Graham 16,317 11,500 1.40

Louis M. Jordan 55,991(4) 11,500 3.41

Carl L. Mason 6,548 10,500 *

Dwight V. Neese 17,000 72,194 4.37

Lud W. Vaughn -- 3,334 *

Philip C. Wilkins 6,107(5) 4,675 *

All directors and executive officers
as a group (14 persons) 154,255 188,592 15.89%

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* Less than 1% of the shares outstanding.
(1) Based on 1,969,770 shares of Union Financial common stock outstanding and
entitled to vote as of December 9, 2003, plus the number of shares that may
be acquired within 60 days by each individual (or group of individuals) by
exercising stock options.
(2) Includes 500 shares owned by the Frances & Mason Alexander Family Foundation
over which Mr. Alexander shares voting power.
(3) Includes 994 shares owned by Mr. Flake's spouse.
(4) Includes 16,953 shares owned by Mr. Jordan's spouse, 3,298 shares owned by
Mr. Jordan's spouse's individual retirement account and 14,789 shares held
in a trust for which Mr. Jordan serves as trustee and shares voting power.
(5) Includes 102 shares held by Mr. Wilkins' spouse.

PROPOSAL 1 -- ELECTION OF DIRECTORS

The Company's Board of Directors currently consists of seven members.
All of the directors are independent under the current listing standards of the
Nasdaq Stock Market, Inc., except for Mr. Neese, who is not independent because
he is an employee of Union Financial and Provident. The Board is divided into
three classes with three-year staggered terms, with approximately one-third of
the directors elected each year. Two directors, Mason G. Alexander and James W.
Edwards, each of whom are currently directors of the Company and Provident, will
be nominated for election at the annual meeting to serve for a three-year term,
or until their respective successors have been elected and qualified. As a
result of the age limitation provision contained in the Company's bylaws it is
expected that Mr. Alexander will retire from the board on September 11, 2004
when he reaches 72 years of age. At that time, the Board of Directors intends to
seek a replacement to fill the vacancy created by Mr. Alexander's retirement.

It is intended that the proxies solicited by the Board of Directors will
be voted for the election of the nominees named above. If any nominee is unable
to serve, the persons named in the proxy card would vote your shares to approve
the election of any substitute proposed by the Board of Directors.
Alternatively, the Board of Directors may adopt a resolution to reduce the size
of the Board. At this time, the Board of Directors knows of no reason why any
nominee would be unable to serve.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF ALL OF
THE NOMINEES.

Information regarding the nominees for election at the annual meeting,
as well as information regarding the continuing directors whose terms expire in
2005 and 2006, is provided below. Unless otherwise stated, each individual has
held his current occupation for the last five years. The age indicated in each
individual's biography is as of September 30, 2003. The indicated period for
service as a director includes service as a director of Provident.

NOMINEES FOR ELECTION OF DIRECTORS

The directors standing for election are:

MASON G. ALEXANDER. Mr. Alexander is a retired banker and currently
serves as a director of Mid-South Management Company, a newspaper holding
company, and Kanuga Episcopal Conferences, Inc. Age 71. Director since 1996.

JAMES W. EDWARDS. Mr. Edwards is the Dean at the University of South
Carolina, Union Campus located in Union, South Carolina. Age 66. Director since
1996.

DIRECTORS CONTINUING IN OFFICE

The following directors have terms ending in 2005:

CARL L. MASON. Mr. Mason is the Chairman of the Board of the Company and
Provident. He is the retired President of Carlisle Finishing, a division of Cone
Mills Corporation, a textile finishing company. Age 59. Director since 1989.

WILLIAM M. GRAHAM. Mr. Graham is the sole owner and operator of Graham's
Flowers in Union, South Carolina. Age 59. Director since 1990.

The following directors have terms ending in 2006:

LOUIS M. JORDAN. Mr. Jordan is a major stockholder of Jordan's Ace
Hardware, Inc. located in Union South Carolina. Age 68. Director since 1971.

DWIGHT V. NEESE. Mr. Neese is the President and Chief Executive Officer
of the Company and Provident. Age 53. Director since 1995.

PHILIP C. WILKINS, DMD. Dr. Wilkins is a dentist in Winnsboro, South
Carolina. Age 47. Director since 1999.

PROPOSAL 2 - AMENDMENT TO COMPANY'S CERTIFICATE OF
INCORPORATION INCREASING THE NUMBER OF AUTHORIZED SHARES

The Board of Directors unanimously approved, declared advisable, and
recommends to the stockholders an amendment to the Certificate of Incorporation
to increase the number of shares of common stock authorized for issuance from
2,500,000 to 5,000,000. The Board of Directors believes that this proposal is in
the best interests of the Company and its stockholders and recommends a vote
"FOR" the proposed amendment.

The first sentence of Article VII of the Company's Certificate of
Incorporation states:

"The aggregate number of shares of all classes of capital stock which
the Corporation has authority to issue is 3,000,000 of which 2,500,000 are to be
shares of common stock, $0.01 par value per share, and of which 500,000 are to
be shares of serial preferred stock, $0.01 par value per share."

The proposed amendment would change the first sentence of Article VII of
the Certificate of Incorporation to increase the total number of authorized
shares of common stock to five million (5,000,000). The par value of the common
stock will remain $0.01 per share. The proposed amendment is subject to the
approval of the Company's stockholders.

PURPOSE OF AMENDMENT

The Certificate of Incorporation of the Company currently authorizes the
issuance of up to 2,500,000 shares of common stock. As of the December 9, 2003
record date, the Company had 1,969,770 shares of common stock outstanding,
20,286 shares of common stock held in treasury, 200,931 shares subject to
outstanding stock options and 76,121 shares subject to stock options available
for issuance under existing option plans. While the Company currently does not
have any plans to issue or reserve additional common stock (other than pursuant
to various compensation and benefit plans), the Board of Directors considers the
proposed increase in the number of authorized shares desirable as it would give
the Board the necessary flexibility to issue common stock in connection with
possible future stock dividends and splits, acquisitions, financing, employee
benefits and for other general corporate purposes. Without an increase in the
number of authorized shares of common stock, the number of available shares for
issuance may be insufficient to consummate one or more of the above
transactions.

Approving an increase in the number of authorized shares at this time
will enable the Company to take advantage of market conditions and favorable
opportunities at the time one of the transactions described above occurs,
without the expense and delay incidental to obtaining stockholder approval of an
amendment to the Certificate of Incorporation increasing the number of
authorized shares, except as may be required by applicable law for a particular
issuance. As a result, the Board is proposing an amendment of the Certificate of
Incorporation to increase the number of shares of common stock from 2,500,000 to
5,000,000, which would increase the authorized and unissued shares of common
stock available for issuance from 232,892 to 2,732,892 shares. Authorized and
unissued common stock may be issued from time to time for any purpose without
further action of the stockholders, except as may be required by the Certificate
of Incorporation, applicable law, or the listing requirements for the Nasdaq
Stock Market, on which the common stock is listed.

Each share of common stock authorized for issuance has the same rights
as, and is identical in all respects with, each other share of common stock. The
newly authorized shares of common stock will not affect the rights, such as
voting and liquidation rights, of the shares of common stock currently
outstanding.

Stockholders will not have preemptive rights to purchase any
subsequently issued shares of common stock. The Company currently has no plans
to issue the newly authorized shares of common stock.

The ability of the Board of Directors to issue additional shares of
common stock without additional stockholder approval may be deemed to have an
anti-takeover effect because unissued shares of common stock could be issued by
the Board of Directors in circumstances that may have the effect of deterring
takeover bids. Because stockholders do not have preemptive rights under the
Certificate of Incorporation, the rights of existing stockholders may (depending
on the particular circumstances in which the additional shares of common stock
are issued) be diluted by any such issuance. The Board of Directors does not
intend to issue any additional shares of common stock except on terms that it
deems to be in the best interests of the Company and its stockholders.

THE BOARD OF DIRECTORS BELIEVES THAT THE AMENDMENT TO THE COMPANY'S
CERTIFICATE OF INCORPORATION INCREASING THE NUMBER OF AUTHORIZED SHARES OF
COMMON STOCK IS IN THE BEST INTERESTS OF THE COMPANY AND ITS STOCKHOLDERS AND,
CONSEQUENTLY, RECOMMENDS A VOTE "FOR" APPROVAL OF THE AMENDMENT TO THE COMPANY'S
CERTIFICATE OF INCORPORATION.

PROPOSAL 3 -- RATIFICATION OF APPOINTMENT OF AUDITORS

The Board of Directors has appointed Elliott Davis, LLC to be its
auditors for the 2004 fiscal year, subject to ratification by stockholders. A
representative of Elliott Davis, LLC is expected to be present at the annual
meeting to respond to appropriate questions from stockholders and will have the
opportunity to make a statement should he or she desire to do so.

If the ratification of the appointment of the auditors is not approved
by a majority of the votes cast by stockholders at the annual meeting, other
independent public auditors will be considered by the Board of Directors. THE
BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE RATIFICATION OF
THE APPOINTMENT OF AUDITORS.

The following table sets forth the fees billed to the Company for the
fiscal year ending September 30, 2003 by Elliott Davis, LLC:

Audit Fees............................ $26,800

Financial information and systems
design and implementation fees...... --

All other fees*....................... 7,650

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*Includes $5,200 for tax-related services and $2,400 for
services related to the audit of loan files.

The Audit Committee believes that the provision of non-audit services by
Elliott Davis, LLC are compatible with maintaining Elliott Davis, LLC's
independence.

AUDIT COMMITTEE REPORT

The Audit Committee of the Board of Directors is responsible for
providing independent, objective oversight of Union Financial's independent
auditors, accounting functions and internal controls. The Audit Committee is
comprised of three directors, each of whom is independent under the National
Association of Securities Dealers' listing standards. The Audit Committee acts
under a written charter adopted by the Board of Directors, a copy of which is
attached as Appendix A.

The Audit Committee reviewed and discussed the annual financial
statements with management and the independent auditors. As part of this
process, management represented to the Audit Committee that the financial
statements were prepared in accordance with generally accepted accounting
principles. The Audit Committee also received and reviewed written disclosures
and a letter from the auditors concerning their independence as required under
applicable standards for auditors of public companies. The Audit Committee
discussed with the auditors the contents of such materials, the auditors'
independence and the additional matters required under Statement on Auditing
Standards No. 61. Based on such review and discussions, the Audit Committee
recommended that the Board of Directors include the audited consolidated
financial statements in Union Financial's Annual Report on Form 10-KSB for the
year ended September 30, 2003 for filing with the Securities and Exchange
Commission.

The Audit Committee's responsibility is to monitor and review the
Company's financial reporting process, including its system of internal controls
and the preparation of consolidated financial statements. It is not the duty or
the responsibility of the Audit Committee to conduct auditing or accounting
reviews. The Audit Committee's oversight does not provide it with an independent
basis to determine that management has maintained appropriate accounting and
financial reporting principles or policies, or appropriate internal controls and
procedures designed to assure compliance with accounting standards and
applicable laws and regulations. Furthermore, the Audit Committee's
considerations and discussions with management and the independent auditors do
not assure that the Company's financial statements are presented in accordance
with accounting principles generally accepted in the United States of America,
that the audit of the Company's financial statements has been carried out in
accordance with generally accepted auditing standards or that the Company's
independent auditors are in fact "independent."

Louis M. Jordan (Chairman)
James W. Edwards
William M. Graham

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The following information is furnished for the executive officers of
Union Financial who received salary and bonus of $100,000 or more during the
year ended September 30, 2003.

LONG-TERM
COMPENSATION
-----------------------------
ANNUAL COMPENSATION AWARDS
------------------------------------------ -----------------------------
OTHER RESTRICTED SECURITIES
ANNUAL STOCK UNDERLYING ALL OTHER
NAME AND PRINCIPAL FISCAL COMPENSATION AWARDS OPTIONS COMPENSATION
POSITIONS YEAR SALARY($) BONUS($) ($)(1) ($) (#) ($)
- -------------------------------- ------ --------- --------- --------------- ------------ ------------ --------------

Dwight V. Neese 2003 $155,320 $72,841 $ -- $-- -- $24,590(2)
President and Chief Executive 2002 142,480 67,322 -- -- 4,087 17,271
Officer 2001 137,000 -- -- -- 5,000 18,390

Richard H. Flake 2003 $ 94,750 $38,540 $ -- $-- -- $14,648(3)
Executive Vice President 2002 94,000 35,532 -- -- 4,052 12,549
and Chief Financial Officer 2001 87,100 -- -- -- 3,200 11,294

Lud W. Vaughn (4) 2003 $ 90,220 $20,237 $ -- $-- -- $ 4,656(5)
Chief Credit Officer 2002 41,250 2,880 -- -- 5,000 --
and Executive Vice President

- --------------------------------------
(1) Does not include the aggregate amount of perquisites and other personal
benefits, which was less than 10% of the total annual salary and bonus
reported.
(2) Consists of employer contribution to Provident's 401(k) plan of $10,000 and
contribution to money purchase pension plan of $14,590.
(3) Consists of employer contribution to Provident's 401(k) plan of $6,514 and
contribution to money purchase pension plan of $8,134.
(4) Mr. Vaughn joined Provident on April 17, 2002.
(5) Consists of employee contribution to Provident's 401(k) plan of $2,417 and
contribution to money purchase pension plan of $2,239.

OPTION VALUE AT FISCAL YEAR END

The following table provides information regarding unexercised stock
options for Messrs. Neese, Flake and Vaughn as of September 30, 2003.

NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS IN-THE-MONEY OPTIONS
SHARES AT FISCAL YEAR-END (#) AT FISCAL YEAR-END (#)(1)
ACQUIRED VALUE ---------------------------- ------------------------------
NAME ON EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- --------------- ------------- ------------ --------------- ------------- ---------------

Dwight V. Neese......... 2,300 $17,158 73,837 1,363 $814,776 $10,754
Richard H. Flake........ -- -- 43,648 1,352 474,506 10,667
Lud W. Vaughn........... -- -- 3,334 1,666 17,504 8,747

- --------------------------
(1) Value of unexercised in-the-money stock options equals the market value of
shares covered by in-the-money options on September 30, 2003, less the
option exercise price. Options are in-the-money if the market value of
shares covered by the options is greater than the exercise price.

EMPLOYMENT AGREEMENTS

The Company and Provident maintain three-year employment agreements with
Messrs. Neese and Flake. The terms of the agreements are extended daily, unless
written notice of non-renewal is given by the Board of Directors. Mr. Neese's
current base salary is $168,000. Mr. Flake's current base salary is $100,000.
The agreements may be terminated at any time by the Board of Directors for "just
cause," as defined in the agreements. If the executive's employment is
terminated for just cause, the agreements provide that the executive will not
receive any salary or benefits for any period after the termination for just
cause, except for vested benefits. The agreements provide for severance payments
if employment is terminated following a change in control (as defined in the
agreements), equal to three times the sum of the executive's then-current base
salary and the highest cash bonus paid or accrued over the past three completed
fiscal years. The executive would also receive cash equal to the benefits he
would have received in each of the three calendar years following the change in
control under any tax-qualified or non-tax qualified retirement program in which
he participated. The sum would be paid promptly within ten days after
termination following any change in control. The executive also would continue
to participate in Provident's employee benefits programs for thirty-six months.

The executive would also be entitled to receive an additional tax
indemnification payment if payments under the employment agreement or any other
payments triggered liability under the Internal Revenue Code as an excise tax on
payments constituting "excess parachute payments." Under applicable law, the
excise tax is triggered by the executive's receipt of payments that are
contingent on a change in control (as defined in the agreement) that equal or
exceed three times the executive's average annual compensation over the five
years preceding the change in control. The excise tax equals 20% of the amount
of the payment in excess of one times the executive's average compensation over
the preceding five-year period. The indemnification payment provides the
executive with a net amount sufficient to pay the excise tax.

The employment agreements restrict each executive from competing against
the Company or the Bank for a period of one year from the date of termination of
the agreement if the executive is terminated without just cause or "good
reason," as defined in the agreements.

CHANGE IN CONTROL AGREEMENT

Union Financial and Provident maintain a change in control agreement
with Mr. Vaughn. The term of the agreement for one year and is extended daily,
unless written notice of non-renewal is given by the Board of Directors. The
agreement provides, that if following a change in control of Union Financial or
Provident, Mr. Vaughn's employment with Provident is terminated, involuntarily
or under certain circumstances set forth in the agreement, voluntarily, Mr.
Vaughn is entitled to receive a severance payment equal to one times his base
salary as in effect on the date of the change in control. In addition to his
severance payment, Mr. Vaughn is also entitled to continued life, medical,
dental and disability coverage for twelve months following his termination of
employment.

OTHER INFORMATION RELATING TO DIRECTORS AND EXECUTIVE OFFICERS

COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive officers and directors, and persons who own more than 10% of
any registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission.
Executive officers, directors and greater than 10% stockholders are required by
regulation to furnish the Company with copies of all Section 16(a) reports they
file.

Based solely on its review of the copies of the reports it has received
and written representations provided to the Company from the individuals
required to file the reports, the Company believes that each of the Company's
executive officers and directors has complied with applicable reporting
requirements for transactions in Union Financial common stock during the fiscal
year ended September 30, 2003.

TRANSACTIONS WITH MANAGEMENT

The recently enacted Sarbanes-Oxley Act generally prohibits loans by
Provident to its executive officers and directors. However, the Sarbanes-Oxley
Act contains a specific exemption from such prohibition for loans by Provident
to its executive officers and directors in compliance with federal banking
regulations. Federal regulations require that all loans or extensions of credit
to executive officers and directors of insured financial institutions must be
made on substantially the same terms, including interest rates and collateral,
as those prevailing at the time for comparable transactions with other persons,
except for loans made pursuant to programs generally available to all employees,
and must not involve more than the normal risk of repayment or present other
unfavorable features. Provident is therefore prohibited from making any new
loans or extensions of credit to executive officers and directors at different
rates or terms than those offered to the general public, except for loans made
pursuant to programs generally available to all employees, and has adopted a
policy to this effect. In addition, loans made to a director or executive
officer in an amount that, when aggregated with the amount of all other loans to
such person and his or her related interests, are in excess of the greater of
$25,000 or 5% of the institution's capital and surplus (up to a maximum of
$500,000) must be approved in advance by a majority of the disinterested members
of the Board of Directors. Provident's policy is to not make any new loans or
extensions of credit to executive officers and directors at different rates or
terms than those offered to the general public and to have the Board of
Directors approve all loans to executive officers and directors.

SUBMISSION OF STOCKHOLDER PROPOSALS AND NOMINATIONS

Proposals that stockholders seek to have included in the proxy statement
for the Company's next annual meeting must be received by the Company no later
than August 30, 2004. However, if the annual meeting is held more than 30
calendar days from January 28, 2005, a stockholder proposal must be received by
a reasonable time before the Company begins to print and mail its proxy
solicitation materials. Any such proposals will be subject to the requirements
of the proxy rules adopted by the Securities and Exchange Commission.

The Company's Certificate of Incorporation provides that in order for a
stockholder to make nominations for the election of directors or proposals for
business to be brought before the annual meeting, a stockholder must deliver
notice of such nominations and/or proposals to the Secretary not less than 30
nor more than 60 days prior to the date of the annual meeting; provided that if
less than 31 days' notice of the

annual meeting is given to stockholders, such notice must be delivered not later
than the close of the tenth day following the day on which notice of the annual
meeting was mailed to stockholders. A copy of the Certificate of Incorporation
may be obtained from the Company.

MISCELLANEOUS

The Company will pay the cost of this proxy solicitation. The Company
will reimburse brokerage firms and other custodians, nominees and fiduciaries
for reasonable expenses incurred by them in sending proxy materials to the
beneficial owners of Union Financial common stock. In addition to soliciting
proxies by mail, directors, officers and regular employees of the Company may
solicit proxies personally or by telephone. None of these persons will receive
additional compensation for these activities.

The Company's Annual Report to Stockholders has been mailed to all
persons who were stockholders as of the close of business on December 9, 2003.
Any stockholder who has not received a copy of the Annual Report may obtain a
copy by writing to the Secretary of the Company. The Annual Report is not to be
treated as part of the proxy solicitation material or as having been
incorporated herein by reference.

A COPY OF THE COMPANY'S FORM 10-KSB FOR THE FISCAL YEAR ENDED SEPTEMBER
30, 2003, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, WILL BE
FURNISHED WITHOUT CHARGE TO ALL PERSONS WHO WERE STOCKHOLDERS AS OF THE CLOSE OF
BUSINESS ON DECEMBER 9, 2003 UPON WRITTEN REQUEST TO CORPORATE SECRETARY, UNION
FINANCIAL BANCSHARES, INC., 203 WEST MAIN STREET, UNION, SOUTH CAROLINA 29379.

If you and others who share your address own your shares in "street
name," your broker or other holder of record may be sending only one annual
report and proxy statement to your address. This practice, known as
"householding," is designed to reduce our printing and postage costs. However,
if a shareholder residing at such an address wishes to receive a separate annual
report or proxy statement in the future, he or she should contact the broker or
other holder of record. If you own your shares in "street name" and are
receiving multiple copies of our annual report and proxy statement, you can
request householding by contacting your broker or other holder of record.

BY ORDER OF THE BOARD OF DIRECTORS

/s/ Wanda J. Wells

Wanda J. Wells
CORPORATE SECRETARY

Union, South Carolina
December 29, 2003

UNION FINANCIAL BANCSHARES, INC.
ANNUAL MEETING OF STOCKHOLDERS

JANUARY 28, 2004
2:00 P.M. LOCAL TIME
------------------------

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints Mason G. Alexander, James W. Edwards,
William M. Graham, Louis M. Jordan, Carl L. Mason, Dwight V. Neese and Philip C.
Wilkins, or each of them, with full power of substitution, to act as proxy for
the undersigned, and to vote all shares of common stock of Union Financial
Bancshares, Inc. (the "Company") owned of record by the undersigned at the
Annual Meeting of Stockholders, to be held on January 28, 2004 at 2:00 p.m.,
local time, in the University of South Carolina Auditorium, Union Campus, 401
East Main Street, Union, South Carolina, and at any and all adjournments
thereof, as designated below with respect to the matters set forth below and
described in the accompanying Proxy Statement and, in their discretion, for the
election of a person to the Board of Directors if any nominee named herein
becomes unable to serve or for good cause will not serve and with respect to any
other business that may properly come before the meeting. Any prior proxy or
voting instructions are hereby revoked.

1. The election as directors of all nominees listed (except as marked to
the contrary below).

Mason G. Alexander and James W. Edwards

FOR ALL
FOR VOTE WITHHELD EXCEPT
--- ------------- ------

|_| |_| |_|

INSTRUCTION: To withhold your vote for any individual nominee, mark "FOR ALL
EXCEPT" and write that nominee's name in the space provided below.

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

2. The amendment to the Company's Certificate of Incorporation
increasing the number of authorized shares of common stock.

FOR AGAINST ABSTAIN
--- ------- -------
|_| |_| |_|

3. The ratification of the appointment of Elliott Davis, LLC as
independent auditors for the Company for the fiscal year
ending December 31, 2004.

FOR AGAINST ABSTAIN
--- ------- -------
|_| |_| |_|

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"
EACH OF THE LISTED PROPOSALS.

THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE
SPECIFIED, THIS PROXY WILL BE VOTED "FOR" EACH OF THE PROPOSALS LISTED. IF ANY
OTHER BUSINESS IS PRESENTED AT THE MEETING, INCLUDING WHETHER OR NOT TO ADJOURN
THE MEETING, THIS PROXY WILL BE VOTED BY THE PROXIES IN THEIR BEST JUDGMENT. AT
THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE
PRESENTED AT THE ANNUAL MEETING.

The above-signed acknowledges receipt from the Company prior to the
execution of this proxy of a Notice of Annual Meeting of Stockholders, a Proxy
Statement dated December 29, 2003 and an Annual Report to Stockholders.

Please sign exactly as your name appears on this card. When signing as
attorney, executor, administrator, trustee or guardian, please give your full
title. If shares are held jointly, each holder may sign but only one signature
is required.

Dated:
--------------------------

--------------------------------
STOCKHOLDER SIGN ABOVE

--------------------------------
CO-HOLDER (IF ANY) SIGN ABOVE

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

PLEASE COMPLETE, DATE, SIGN AND PROMPTLY MAIL THIS PROXY
IN THE ENCLOSED POSTAGE-PAID ENVELOPE.

APPENDIX A

AUDIT COMMITTEE
CHARTER

I. PURPOSE

The primary function of the Audit Committee (the Committee) of Union
Financial Bancshares, Inc. (the Corporation) and Provident Community Bank (the
Bank) is to review: the integrity of the financial reports and other financial
information provided by the Corporation to any governmental body or the public,
including any certification, report or opinion prepared by or review performed
by the Corporation's independent accountants; the Corporation's compliance with
legal and regulatory requirements; the independent accountants' qualifications
and independence; the performance of the Corporation's internal audit function,
its independent accountants and the system of internal controls regarding
finance, accounting, legal compliance and ethics that management and the Board
have established; and the Corporation's auditing, accounting and financial
reporting processes generally. Consistent with this function, the Committee
should encourage continuous improvement of, and should foster adherence to, the
Corporation's policies, procedures and practices at all levels. The Committee's
primary duties and responsibilities are to:

- Serve as an independent and objective party to monitor the Corporation's
financial reporting process and internal control systems.

- Review and assess the audit efforts of the Corporation's independent
accountants and internal audit function.

- Provide an open avenue of communication among the independent
accountants, financial personnel, senior management, the internal audit
function, and the Board of Directors.

The Committee will primarily fulfill these responsibilities by carrying out the
activities outlined in Section IV. of this Charter.

II. COMPOSITION

The Committee shall be comprised of three or more directors as determined
by the Board of Directors, each of whom shall be independent as defined by
applicable Nasdaq Listing Standards, and free from any relationship that, in the
opinion of the Board, would interfere with the exercise of his or her
independent judgement as a member of the Committee. All members of the Committee
shall have a working familiarity with basic finance and accounting practices and
be able to read and understand fundamental financial statements. In addition, at
least one member of the Committee shall have past employment experience in
finance or accounting, requisite professional certification in accounting or
other comparable experience or background which results in the individual's
financial sophistication, including being or having been a chief executive
officer, chief financial officer or other senior financial officer with
financial oversight responsibilities.

The members of the Committee shall be elected by the Board annually or
until their successors shall be duly elected and qualified. Unless a Chairperson
is elected by the full Board, the members of the Committee may designate a
Chairperson by majority vote of the full Committee membership.

III. MEETINGS

The Committee shall meet at least four times annually, or more frequently
as circumstances dictate. As part of its job to foster open communication, the
Committee should meet at least annually with management and the external
auditors to discuss the internal and external audit functions and any other
matters that the Committee or each of these groups believe should be discussed
privately.

IV. RESPONSIBILITIES AND DUTIES

To fulfill its responsibilities and duties, the Committee shall:

Documents/Reports Review
- ------------------------

1. Review and update this Charter periodically, but not less than annually,
and as conditions dictate.
2. Review the regular internal reports to management prepared by the internal
audit function and management's response.
3. Review the Corporation's audited annual financial statements and the
independent accountants' opinion rendered with respect to such financial
statements, including reviewing the nature and extent of any significant
changes in accounting principles or the application therein.
4. Review and approve requests for any management consulting engagement to be
performed by the Corporation's independent auditor and be advised of any
other study undertaken at the request of management that is beyond the
scope of the audit engagement letter.
5. Review with financial management interim financial reports prior to the
release of earnings. The Chairperson of the Committee may represent the
entire Committee for the purposes of this review.
6. Generally discuss earnings press releases and financial information as
well as earnings guidance provided to analysts and rating agencies.

Independent Accountants
- -----------------------

7. Appoint the independent accountants, considering independence and
effectiveness and be ultimately responsible for their compensation,
retention and oversight (including resolution of disagreements between
management and the accountant regarding financial reporting) for the
purpose of preparing or issuing an audit report or related work, and each
such accounting firm shall report directly to the Committee. On a annual
basis, the Committee should review and discuss with the accountants all
significant relationships the accountants have with the Corporation to
determine the accountants' independence.
8. Review the performance of the independent accountants and approve any
proposed discharge of the independent accountants when circumstances
warrant.
9. Monitor the rotation of the lead audit partner or the audit partner having
primary responsibility for reviewing the audit as required by law.
10. Periodically consult with the independent accountants out of the presence
of management about internal controls and the fullness and accuracy of the
organization's financial statements.

A-2

11. Approve, in advance, all permissible non-audit services to be completed by
the independent accountants and all audit, review or attest engagements
required under the federal securities laws. Such approval process will
ensure that the independent accountant does not provide any non-audit
services to the Corporation or the Bank that are prohibited by law or
regulation.
12. Obtain and review, at least annually, a report by the independent
accountants describing (A) the auditor's internal quality control
procedures, (B) any material issues raised by its most recent internal
quality control review, or peer review, of the firm or by any inquiry or
investigation by governmental or professional authorities in the preceding
five (5) years relating to an independent audit conducted by the firm and
any steps taken to deal with such issues.
13. Set clear policies for hiring employees or former employees of the
independent accountants.

Financial Reporting Process
- ---------------------------

14. In consultation with the independent accountants and the internal audit
function, review the integrity of the organization's financial reporting
processes, both internal and external.
15. Consider the independent accountants' judgement about the quality and
appropriateness of the Corporation's accounting principles as applied in
its financial reporting.
16. Consider and approve, if appropriate, major changes to the Corporation's
auditing and accounting principles and practices as suggested by the
independent accountants, management, or the internal audit function.
17. Prepare a report for inclusion in the Corporation's annual proxy
statement, in accordance with applicable rules and regulations.

Process Improvement
- -------------------

18. Establish regular and separate systems of reporting to the Committee by
each of management, the independent accountants and the internal audit
function regarding any significant judgements made in management's
preparation of the financial statements and the view of each as to
appropriateness of such judgements.
19. Following completion of the annual audit, review separately with each of
management, the independent accountants, and the internal audit function
any significant difficulties encountered during the course of the audit,
including any restrictions on the scope of work or access to required
information.
20. Review and resolve any significant disagreement among management and the
independent accountants or the internal audit function in connection with
the preparation of the financial statements.
21. Review with the independent accountants, the internal audit function and
management the extent to which changes or improvements in financial or
accounting practices, as approved by the Committee, have been implemented.
22. Periodically consult with the internal accountants out of the presence of
management and the independent accountants about internal controls and the
fullness and accuracy of the organization's financial statements.
23. Have in place procedures for (A) the receipt, retention and treatment of
complaints regarding accounting, internal accounting controls or auditing
matters and (B) the confidential, anonymous submission by employees of
concerns regarding questionable accounting or auditing matters.
24. Report regularly to the Board of Directors, which such report should
include a review on issues relating to the quality or integrity of the
Corporation's financial statements, the Corporation's compliance with
legal or regulatory requirements, the performance of the independent
accountants, or the performance of the internal audit function.

A-3

Ethical and Legal Compliance
- ----------------------------

25. Review activities, organizational structure, and qualifications of the
internal audit function.
26. Review all legal compliance matters as they occur.
27. Review and approve all related-party transactions.
28. Review any legal matter that could have a significant impact on the
organization's financial statements.
29. Be authorized to retain independent counsel and other advisors as it deems
necessary to carry out its duties and to assist it in the conduct of any
investigation. In connection therewith, the audit committee shall be
provided appropriate funding as determined by the audit committee for
payment to accountants and advisors and for ordinary administrative
expense that are necessary or appropriate in carrying out its duties.
30. Perform any other activities consistent with this Charter, the
Corporation's Bylaws and governing law, as the Committee or the Board of
Directors deems necessary or appropriate.
31. Review and update periodically a Code of Business Conduct.

A-4