February 10, 1998

                                                                  (910) 271-3112



Board of Directors
South Street Financial Corp.
155 West South Street
Albemarle, North Carolina 28001

     Re:  South Street Financial Corp. Stock Option Plan -- Registration
          Statement on Form S-8 with Respect to the Offering of up to 449,650
          Shares of Common Stock

Gentlemen:

     We have acted as special counsel to South Street Financial Corp. (the
"Holding Company"), in connection with the Holding Company's registration under
the Securities Act of 1933 on Form S-8 (the "Registration Statement") of its
offering of up to 449,650 shares of Common Stock, no par value (the "Shares"),
under the South Street Financial Corp. Stock Option Plan (the "Stock Option
Plan") in connection with the exercise of stock options (the "Option Rights").
As such counsel, we have made such legal and factual examinations and inquiries
as we deemed advisable for the purpose of rendering our opinions.

     For purposes of rendering our opinion, we have assumed that (i) the Shares
issuable pursuant to the exercise of Option Rights granted under the terms of
the Stock Option Plan will continue to be duly and validly authorized on the
dates the Shares are issued pursuant to the Option Rights; (ii) on the dates the
Option Rights are exercised, the Option Rights granted under the terms of the
Stock Option Plan will constitute valid, legal and binding obligations of the
Holding Company and will (subject to applicable bankruptcy, moratorium,
insolvency, reorganization and other laws and legal principles affecting the
enforceability of creditors' rights generally) be enforceable against the
Holding Company in accordance with their terms; (iii) no change occurs after the
date hereof in applicable law or the pertinent facts; and (iv) the provisions of
applicable "blue sky" and other state securities laws have been complied with to
the extent required.

 
Board of Directors
South Street Financial Corp.
February 10, 1998
Page 2


     Based on the foregoing, and subject to the assumptions set forth herein, it
is our opinion as of the date hereof that the Shares which have been or are to
be issued pursuant to the Stock Option Plan have been duly and validly
authorized and, upon the issuance or sale of the Shares in accordance with the
Stock Option Plan, and upon receipt of any consideration required thereby, will
be legally issued, fully paid and nonassessable.

     We hereby consent to the filing of this letter as an exhibit to the
Registration Statement.


                              Sincerely yours,

                              BROOKS, PIERCE, MCLENDON, HUMPHREY & 
                              LEONARD, L.L.P.



                              By: /s/ Edward C. Winslow III
                                  ---------------------------------
                              Edward C. Winslow III