SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934

Filed By the registrant [X]
Filed by a party other than the registrant [ ]

Check the appropriate box:
[ ] Preliminary proxy statement [ ] Confidential, for use of the
[X] Definitive proxy statement Commission only (as permitted by
[ ] Definitive other materials Rule 14a-6(e)(2))
[ ] Soliciting material under Rule 14a-12

PARK MERIDIAN FINANCIAL CORPORATION
------------------------------------------------
(Name of Registrant as Specified In Its Charter)

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

Payment of filing fee (check the appropriate box):

[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

1) Title of each class of securities to which transaction applies:

2) Aggregate number of securities to which transaction applies:

3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it is determined):

4) Proposed maximum aggregate value of transaction:

5) Total fee paid:

[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing:

1) Amount Previously Paid:

2) Form, Schedule or Registration Statement No.:

3) Filing Party:

4) Date Filed:

PARK MERIDIAN FINANCIAL CORPORATION
6826 MORRISON BOULEVARD
CHARLOTTE, NORTH CAROLINA 28211

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

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 23, 2001

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

To the Shareholders:

Notice is hereby given that the 2001 Annual Meeting of Shareholders
(the "Annual Meeting") of Park Meridian Financial Corporation, a North Carolina
company (the "Company"), will be held at Myers Park Country Club, 2415 Roswell
Avenue, Charlotte, North Carolina at 9:30 a.m. on May 23, 2001 for the following
purposes:

(1) To elect five members to the Board of Directors;
(2) To ratify the Board of Directors' selection of KPMG LLP as the
Company's independent certified accountants for the year
ending December 31, 2001; and
(3) To transact such other business as may properly come before
the Annual Meeting or any adjournment thereof.

YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING IN PERSON. EVEN
IF YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE DATE, SIGN AND PROMPTLY RETURN
THE ENCLOSED PROXY IN THE ENCLOSED, SELF-ADDRESSED, STAMPED ENVELOPE. IF YOU
ATTEND THE ANNUAL MEETING AND DESIRE TO REVOKE YOUR PROXY AND VOTE IN PERSON,
YOU MAY DO SO. IN ANY EVENT, A PROXY MAY BE REVOKED AT ANY TIME BEFORE IT IS
EXERCISED. ENCLOSED IS THE COMPANY'S 2000 ANNUAL REPORT. WE LOOK FORWARD TO
SEEING AS MANY OF YOU AS POSSIBLE AT THE MEETING.

By Order of the Board of Directors

Henry A. Harkey Kevin T. Kennelly
Chairman of the Board President and Chief Executive Officer

Charlotte, North Carolina
April 15, 2001

2
3

PARK MERIDIAN FINANCIAL CORPORATION
6826 MORRISON BOULEVARD
CHARLOTTE, NORTH CAROLINA 28211

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

PROXY STATEMENT
FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 23, 2001

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

This Proxy Statement is being sent to shareholders of Park Meridian
Financial Corporation, a North Carolina company (the "Company"), in connection
with the solicitation of proxies on behalf of the Board of Directors of the
Company for use at the Annual Meeting of Shareholders (the "Annual Meeting") of
the Company to be held at Myers Park Country Club, 2415 Roswell Avenue,
Charlotte, North Carolina at 9:30 a.m., Charlotte, North Carolina time, on May
23, 2001, or any adjournment thereof, for the purposes set forth in the
accompanying Notice of Annual Meeting of Shareholders. The Company will bear the
entire cost of preparing this Proxy Statement and of soliciting proxies. Proxies
may be solicited by directors, officers and regular employees of the Company in
person or by mail, telephone, telecopy or telegraph. The Company may also
request banking institutions, brokerage firms, custodians, nominees and
fiduciaries to forward solicitation materials to the beneficial owners of Common
Stock of the Company held of record by such persons, and the Company will
reimburse the reasonable forwarding expenses. The cost of this solicitation of
proxies will be paid by the Company. This Proxy Statement and the enclosed form
of proxy were first mailed to shareholders on or about April 15, 2001.

On August 4, 2000, the Company completed a share exchange with Park
Meridian Bank (the "Bank"). As a result of the share exchange, the Bank became a
wholly owned subsidiary of the Company. The directors and executive officers of
the Company are identical to the directors and executive officers of the Bank
immediately prior to the share exchange. Because no shareholder elected to
pursue statutory rights of dissent and appraisal, the shareholders of the
Company immediately following the share exchange owned the same number of shares
of the Company's Common Stock as the number of shares of the Bank's common stock
held by them immediately prior to the share exchange. For simplicity, except
where otherwise expressly noted, this Proxy Statement has been prepared to
include service with the Bank in reflecting periods of service with the Company,
to include compensation paid by the Bank as paid by the Company, and to include
other actions regarding the Bank occurring prior to the share exchange as if
they applied to the Company.

REVOCATION OF PROXY

Any shareholder returning the accompanying proxy may revoke such proxy
at any time prior to its exercise by (a) a written notice which by its terms
revokes the proxy, (b) executing and delivering to the Company a later-dated
proxy or (c) attending the meeting and either giving notice to the Secretary of
the Company of such revocation or by announcing such revocation in open meeting.

DESCRIPTION OF COMMON STOCK

The voting securities of the Company are shares of its common stock,
$.01 par value (the "Common Stock"). Each share of Common Stock entitles the
holder thereof to one vote. At March 31, 2001, there were outstanding and
entitled to vote 2,766,579 shares of Common Stock held of record by

approximately 800 shareholders. Only shareholders of record at the close of
business on March 31, 2001 are entitled to notice of, and to vote at, the Annual
Meeting or any adjournment thereof.

QUORUM AND VOTING

The presence, in person or by proxy, of the holders of a majority of
the outstanding shares of the Common Stock entitled to vote is necessary to
constitute a quorum at the Annual Meeting. If a quorum is not present or
represented at the Annual Meeting, the shareholders present and entitled to vote
have the power to adjourn the meeting from time to time by the vote of a
majority of the votes cast on the motion to adjourn, without notice other than
an announcement at the meeting, until a quorum is present or represented. At any
such adjourned meeting at which a quorum is present or represented, any business
may be transacted that might have been transacted at the meeting as originally
notified. On all matters submitted to a vote of the shareholders at the Annual
Meeting or any adjournment thereof, each shareholder will be entitled to one
vote for each share of the Common Stock owned of record by such shareholder at
the close of business on March 31, 2001. In the election of directors, those
candidates who receive the greatest number of votes cast at the meeting by the
shareholders entitled to vote will be deemed elected, even if a candidate does
not receive a majority of the votes cast. All other actions, including the
ratification of the selection of KPMG LLP as the Company's independent certified
accountants must be approved by a majority of the votes actually cast. With
respect to votes taken on the matters proposed to be acted on at the Annual
Meeting, abstentions and broker non-votes will have no effect on the outcome of
the vote.

BENEFICIAL OWNERSHIP OF COMMON STOCK BY DIRECTORS, NOMINEES
FOR DIRECTOR, MANAGEMENT AND PRINCIPAL SHAREHOLDERS

The following table sets forth the number and percentage of outstanding
shares beneficially owned as of February 28, 2001 by (i) each director of the
Company, (ii) each executive officer of the Company, and (iii) individuals
owning more than five percent of the Company's shares of Common Stock.

Amount and Nature Percent of
Name of Beneficial Ownership (1) Common Stock
- ---- --------------------------- ------------
Larry W. Carroll 125,975 (2) 4.53
Robert F. Gilley 49,513 (3) 1.78
Averill C. Harkey 77,964 (4) 2.81
Henry A. Harkey 96,093 (5) 3.45
Kevin T. Kennelly 90,231 (6) 3.19
Steven W. Luquire 35,461 (7) 1.28
James L. Montag 51,283 (8) 1.85
James L. Moore, Jr. 46,042 (9) 1.66
Jeffry V. Mullins 13,720 .49
William O. Musgrave 27,878 1.00
Robert M. Pittenger 45,516 (10) 1.64
J. Ralph Squires 44,995 1.62

2
5

Amount and Nature Percent of
Name of Beneficial Ownership (1) Common Stock
- ---- --------------------------- ------------
Victoria S. Sutton 85,498 (11) 3.08
C. Rex Welton 43,536 (12) 1.57
Samuel H. McMahon, Jr.* 199,326 (13) 7.20
Bryan F. Kennedy** 32,550 (14) 1.16
All Directors and Executive Officer 866,255 (15) 28.61
as a group (15 persons)

* Five percent shareholder and not a director.

** This individual is an executive officer of the Company who does not
serve as a director.

(1) Unless otherwise indicated, each individual has sole voting and
investment power with respect to all shares beneficially owned by such
individual. Except as otherwise noted, the amount includes beneficial
ownership of 12,500 shares represented by options granted under the
Company's Stock Option Plan for Directors.
(2) Includes 23,925 shares held of record by a corporation of which Mr.
Carroll is a controlling shareholder; and 7,322 shares held of record
by a profit-sharing plan and trust of which Mr. Carroll is a trustee.
(3) Includes 15,785 shares held of record by a profit-sharing plan and
trust of which Mr. Gilley is a trustee.
(4) Includes 10,106 shares held of record by Mr. Averill Harkey in a
simplified employee pension individual retirement account; 14,322
shares held of record by a corporation in which Mr. Averill Harkey
holds a 50% interest; 6,103 shares held of record by a charitable
foundation of which Mr. Averill Harkey is a director; 4,102 shares held
of record by a trust of which Mr. Averill Harkey is a trustee; and
6,106 shares held of record by Mr. Harkey's spouse for his child, of
which shares Mr. Harkey disclaims beneficial ownership.
(5) Includes 10,606 shares held of record by Mr. Henry Harkey in a
simplified employee pension individual retirement account; 14,322
shares held of record by a corporation in which Mr. Henry Harkey holds
a 50% interest; 6,103 shares held of record by a charitable foundation
of which Mr. Henry Harkey is a director; 8,444 shares held of record by
a trust of which Mr. Henry Harkey is a trustee; 3,221 shares held of
record by Mr. Harkey's spouse, of which shares Mr. Harkey disclaims
beneficial ownership; and 13,054 shares held of record by Mr. Harkey's
spouse for his children, of which shares Mr. Harkey disclaims
beneficial ownership.
(6) Includes 38,135 shares that Mr. Kennelly has the right to acquire from
the Company pursuant to his employment agreement and 25,000 options
granted under the Company's Employee Stock Option Plan.
(7) Includes 1,562 shares held of record by a corporation of which Mr.
Luquire is controlling shareholder.
(8) Includes 5,613 shares held of record by a trust of which Mr. Montag is
a beneficiary, the beneficial ownership of which Mr. Montag disclaims;
and 5,613 shares held of record by his spouse, the beneficial ownership
of which Mr. Montag disclaims, and 11,562 shares held of record by a
limited partnership of which Mr. Montag is a general partner.
(9) Includes 21,971 shares held of record by Mr. Moore's spouse, the
beneficial ownership of which Mr. Moore disclaims.
(10) Includes 16,643 shares held of record jointly with Mr. Pittenger's
spouse and 1,731 held of record by Mr. Pittenger's spouse for his
children.
(11) Includes 13,426 shares held of record by a pension and profit-sharing
plan of which Ms. Sutton is a trustee.
(12) Includes 195 shares held of record by his spouse, the beneficial
ownership of which Mr. Welton disclaims.
(13) Includes 109,932 shares held of record by Mr. McMahon's spouse, the
beneficial ownership of which Mr. McMahon disclaims. Mr. McMahon's
address is 5210 Carmel Road, Charlotte, North Carolina 28226.
(14) Includes 29,814 shares represented by options granted under the
Company's Employee Stock Option Plan.
(15) Includes 255,449 shares such persons have the right to acquire pursuant
to options issued by the Company.

ACTION TO BE TAKEN UNDER THE PROXY

The shares represented by the enclosed form of proxy, if properly
dated, executed and returned, will be voted at the Annual Meeting or any
adjournment thereof in accordance with the instructions

3
6

thereon. Any proxy upon which no instructions have been indicated with respect
to a specified matter will be voted as follows: (a) "FOR" the election of the
five persons named in this Proxy Statement as nominees for election to the Board
of Directors; (b) "FOR" the ratification of the Board of Directors' selection of
KPMG LLP as the Company's independent certified accountants for the fiscal year
ending December 31, 2001; and (c) in the discretion of the proxy holders in the
transaction of such other business as may properly come before the Annual
Meeting or any adjournment thereof. The Board of Directors knows of no matters,
other than those stated above, to be presented for consideration at the Annual
Meeting. If, however, other matters properly come before the Annual Meeting or
any adjournment thereof, it is the intention of the persons named in the
accompanying proxy to vote such proxy in accordance with their best judgment on
any such matters. The persons named in the accompanying proxy may also, if it is
deemed advisable, vote such proxy to adjourn the Annual Meeting from time to
time.

ELECTION OF DIRECTORS

Pursuant to the Company's bylaws, the number of directors constituting
the Board of Directors shall not be less than twelve nor more than nineteen as
may be fixed or changed from time to time, within the minimum and the maximum,
by the shareholders or the Board of Directors. Currently, the number of
directors is fixed at fourteen. The Company's bylaws classify the Board into
three classes as equal in number as is possible serving staggered three-year
terms. Five members in Class III serve until the annual meeting of shareholders
to be held in 2001. Five members in Class I serve until the annual meeting of
shareholders to be held in 2002. Four members in Class II serve until the annual
meeting of shareholders to be held in 2003. All of the nominees for director are
present members of the Board of Directors. Upon election at the Annual Meeting,
members of Class III will serve until the annual meeting of shareholders to be
held in 2004.

The following table sets forth certain information with respect to the
directors who are nominees for election to the Board of Directors of the Bank:

Nominees for election to Class III (term expiring in 2004)

Principal Occupation During Director
Name and Age Past Five Years Since
------------ --------------------------- --------

Robert F. Gilley (66) President and sole shareholder of Gilley 1991
Financial Associates, Ltd., a life
insurance agency; former President of
Colville Group, Ltd., a life insurance
agency.

Kevin T. Kennelly (52) President and Chief Executive Officer of 1991
Park Meridian Bank.

James L. Moore, Jr. (58) Vice-Chairman of the Board of Directors of 1997
Coca-Cola Bottling Co. Consolidated, a
soft drink bottler.

Jeffry V. Mullins (59) Private real estate investor and 2000
television sports commentator for ESPN
Regional. Formerly Vice-Chancellor,
Athletic Director and Head Basketball
Coach at the University of North Carolina
- Charlotte.

4
7

J. Ralph Squires (61) President and sole shareholder of Squires 1991
Enterprises, Inc., a commercial real
estate developer, and Vice President of
Dover Mortgage Company. Former member of
the Board of Directors of Badin Lake
Association, a real estate development
firm; former President, Chairman of the
Board and controlling shareholder of Ralph
Squires Homes, Inc., a residential real
estate development firm.

Directors serving in Class I (term expiring in 2002)

Principal Occupation During Director
Name and Age Past Five Years Since
------------ --------------------------- --------

Larry W. Carroll (49) President of Carroll Financial Associates, 1991
Inc. a financial planning firm and a
principal and registered representative of
Financial Network Investment Corporation,
a securities broker. Formerly President
of Carroll Financial Advisors, Inc., a
financial planning and investment
management firm now a part of Carroll
Financial Associates, Inc.

Averill C. Harkey (49) Partner in the law firm of Harkey, 1991
Lambeth, Nystrom, Fiorella and Morrison,
L.L.P. and President and 50% shareholder
of Morehead Properties, Inc., a real
estate investment and development firm.

Steven W. Luquire (52) President of Luquire George Andrews, Inc., 1991
a marketing and public relations firm.

William O. Musgrave (52) President and Chief Operating Officer of 1991
Saturn Retail Enterprises, Inc., a company
operating over 60 Saturn retail
locations. Formerly Executive Vice
President and Chief Operating Officer of
Hendrick Automotive Group, a holding
company owning interests in over 60 retail
automotive dealerships and in other
businesses.

5
8

Victoria S. Sutton (48) Private investor. Former President of 1991
Paramount Parks, a diversified
entertainment company.

Directors serving in Class II (term expiring in 2003)

Principal Occupation During Director
Name and Age Past Five Years Since
------------ --------------------------- --------

Henry A. Harkey (51) Chairman of the Board, Park Meridian Bank, 1991
partner in the law firm of Harkey,
Lambeth, Nystrom, Fiorella and Morrison,
L.L.P. and Vice President and 50%
shareholder of Morehead Properties, Inc.,
a real estate investment and development
firm.

James L. Montag (64) Private investor and Principal of Montag 1991
Management Corp., a registered investment
advisor; former President of Laurel Bay
Corporation, a general partner of AMD
Enterprises, LP, a private merchant
banking firm.

Robert M. Pittenger (52) President and controlling shareholder of 1991
the Robert Pittenger Company, a real
estate investment firm.

C. Rex Welton (60) Principal in Welton Properties, LLC, a 1991
commercial real estate developer.
Formerly President of Brok Mfg. Corp., and
formerly President of Parnell-Martin
Companies, a wholesale plumbing supplies
distributor.

EXCEPT FOR AVERILL C. HARKEY AND HENRY A. HARKEY, WHO ARE BROTHERS, NO
DIRECTORS OR EXECUTIVE OFFICERS ARE RELATED TO OTHER DIRECTORS OR EXECUTIVE
OFFICERS.

Should any nominee named herein for the office of director become
unable or unwilling to accept nomination or election, it is intended that the
persons acting under the proxy will vote for the election of such other persons
as the Board of Directors of the Company may recommend. The Board of Directors
has no reason to believe that any nominee named above will be unable or
unwilling to serve if elected.

6
9

BOARD OF DIRECTORS MEETINGS, ATTENDANCE, COMMITTEES, AND FEES

MEETINGS

The Board of Directors of Park Meridian Bank held five meetings in 2000
prior to the completion of the share exchange pursuant to which Park Meridian
Bank became a subsidiary of Park Meridian Financial Corporation. The Board of
Directors of Park Meridian Financial Corporation held five meetings in 2000
after the date of the share exchange. Each director attended at least 75% of
these ten meetings of the Board plus the total number of Board committee
meetings on which such director served.

COMMITTEES

There are four standing committees of the Board of Directors: the
Executive/Asset Liability Committee, the Audit Committee, the Loan Committee,
and the Marketing Committee.

Executive/Asset Liability Committee. The Executive/Asset Liability
Committee, which met eleven times in 2000, consists of Larry W. Carroll, Henry
A. Harkey, Kevin T. Kennelly, Steven W. Luquire and J. Ralph Squires. The
Executive/Asset Liability Committee, between meetings of the Board of Directors
and subject to such limitations as may be required by law or imposed by
resolution of the Board of Directors, may exercise all authority of the Board of
Directors. This committee also performs the function of asset-liability
management, including the supervision of the Company's investment portfolio. In
its function as an investment committee, the Executive/Asset Liability Committee
reviews and approves Company investments to insure that such investments are
being made in accordance with Company policy as set by the Board. The Executive
Committee also functions as the nominating and compensation committees of the
Board.

Audit Committee. The Audit Committee, which met four times in 2000,
consists of James L. Montag, James L. Moore, Victoria S. Sutton, William O.
Musgrave and Jeffry V. Mullins. The Audit Committee has the responsibility to
ensure that the Board receives objective information regarding policies,
procedures, and activities of the Company with respect to auditing, accounting,
internal accounting controls, financial reporting and such other activities of
the Company as may be directed by the Board. Subject to the approval of the
Board, it selects a qualified firm of certified public accountants to conduct
such audit work as is necessary for this purpose. The Company's Board of
Directors has adopted a written charter for the Audit Committee, which is
appended to this Proxy Statement.

Loan Committee. The Loan Committee, which met twelve times in 2000,
consists of Larry W. Carroll, Averill C. Harkey, Kevin T. Kennelly and C. Rex
Welton. The Loan Committee reviews and approves loans made by the Bank to ensure
that such loans are being made in accordance with Bank policies set by the Board
of Directors. In addition, this Committee reviews annually the Bank's
significant credit relationships.

Marketing Committee. The Marketing Committee, which met four times in
2000, consists of Robert F. Gilley, Kevin T. Kennelly, James L. Montag, and
Robert M. Pittenger. The Marketing Committee reviews and recommends policies,
strategies and tactics for the Company's business development and marketing.

FEES

Directors other than directors who are also employees receive $200 for
each Board of Directors or Committee meeting for which the director is
physically present except that members of the Loan Committee receive $300 for
each meeting of the Loan Committee for which they are physically present. In
addition, the Chairman receives $1,000 per quarter. In 1998, each of the current
non-employee directors then in office received options to purchase 12,500 shares
of Common Stock at an exercise price of $13.20 per share except Mr. Henry A.
Harkey who received options to purchase 18,750 shares. Each

7
10

of the current non-employee directors first taking office after such award has
received options to purchase 12,500 shares of Common Stock at an exercise price
equal to the fair market value of a share of common stock at the time such
director joined the Board.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who beneficially own
more than ten percent of the Common Stock, to file with the Securities and
Exchange Commission (and prior to the share exchange, the Federal Deposit
Insurance Corporation) initial reports of ownership and reports of changes in
ownership of Common Stock and other equity securities of the Company. Executive
officers, directors and greater than ten-percent beneficial owners are required
by applicable regulations to furnish the Company with copies of all Section
16(a) reports that they file. To the Company's knowledge, based solely on review
of the copies of such reports furnished by the Company and written
representations that no other reports were required, during the fiscal year
ended December 31, 2000, all Section 16(a) filing requirements applicable to its
executive officers and directors and greater than ten-percent beneficial owners
were complied with.

EXECUTIVE OFFICER COMPENSATION AND RELATED MATTERS

The following table sets forth certain information with respect to the
executive officers of the Company [includes employment by Park Meridian Bank
(Proposed)].

Name Positions Employed Since
---- --------- --------------
Kevin T. Kennelly (52) President and Chief 1991
Executive Officer

Bryan F. Kennedy, III (43) Executive Vice President 1991

Executive officers are appointed by the Board of Directors on an annual
basis.

Kevin T. Kennelly joined the Bank as President and Chief Executive
Officer in July of 1990. Mr. Kennelly has twenty-four years' experience in the
commercial banking industry. From 1974 to 1985, he was employed by NCNB National
Bank of North Carolina in a variety of positions, managing the bank's credit
department for two and one-half years and serving as a vice president in its
corporate banking department for his last two and one-half years with that bank.
From 1985 through early 1987, he served as Deputy Secretary of Commerce for the
State of North Carolina. From early 1987 to mid-1989, he served as President of
MetroBank (known as RHNB of North Carolina after December 1, 1988). At
MetroBank, Mr. Kennelly was responsible for all bank functions, including loan
policy, marketing, operations, personnel, and asset liability management. He
holds a B.A. degree in Economics from the University of Virginia and an M.B.A.
from the University of North Carolina at Chapel Hill.

Bryan F. Kennedy, III joined the Bank as Senior Vice President and
Senior Loan Officer in June of 1991. Mr. Kennedy has twenty years experience in
the commercial banking industry including two years at the Bank of the South in
Atlanta, two and one-half years with NCNB National Bank of North Carolina, where
he served as a Commercial Loan Officer on the Charlotte Loan Platform, and five
and one-half years at First Charlotte Bank, where he served as a Vice President
in the commercial loan area. He holds a B.S. in Commerce from the University of
Virginia and an M.B.A. from the University of North Carolina at Chapel Hill.

8
11

The following table sets forth certain information with respect to
compensation paid or accrued by the Company during the fiscal years ended
December 31, 2000, 1999 and 1998 with respect to the Company's Chief Executive
Officer and each other compensated executive officer of the Company.

SUMMARY COMPENSATION TABLE

Annual Compensation Long-Term
------------------- Compensation Award
---------------------
Other Annual Securities Underlying
Name & Principal Position Year Salary($) Bonus($) Compensation($)(1) Options(#)
- ------------------------- ---- --------- -------- ------------------ ---------------------

Kevin T. Kennelly 2000 150,000 40,000 13,898 -
President & Chief 1999 138,915 30,000 9,590 -
Executive Officer 1998 132,300 35,000 7,313 31,250

Bryan F. Kennedy, III 2000 117,368 35,000 7,976 -
Executive Vice President 1999 103,551 28,000 6,673 3,000
1998 98,620 25,000 5,140 15,000

(1) Certain amounts may have been expended by the Bank that may have had
value as a personal benefit to the named officer. However, the total
value of such benefits did not exceed the lesser of $50,000 or 10% of
the annual salary and bonus of such named officer for the fiscal year
reported.

The following table sets forth information with respect to the stock options
held by each of the executive officers named in the Summary Compensation Table
at December 31, 2000.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES

Number of Securities Value of Exercisable
Underlying Unexercisable In-the-Money Options
Options at FY-End (#) at FY-End ($)(1)
--------------------------- ----------------------------
Shares
Acquired On Value
Name Exercise Realized Exercisable Unexercisable Exerciseable Unexercisable
- ---- ----------- -------- ----------- ------------- ------------ -------------

Kevin T. Kennelly 6,000 40,650 65,135 6,250 351,729 -

Bryan F. Kennedy, III - - 26,714 14,900 118,070 -

(1) The fair market value per share used for computations in this column
was $9.50 which was the price of the Common Stock on December 31, 2000
based on the last sale of Common Stock completed prior to January 1,
2001.

EMPLOYMENT AGREEMENTS

The Company and Kevin T. Kennelly entered into an Amended and Restated
Employment Agreement dated January 1, 1998, to secure his services as president.
Under the employment agreement, which has a minimum term of five years, Mr.
Kennelly is currently paid a base salary of $160,000 per year, to be reviewed
annually by the Board of Directors for all years beginning with 2001 and which
will be adjusted as Mr. Kennelly's performance, the performance of the Company
and other pertinent factors warrant. Mr. Kennelly will also receive bonus
compensation of up to 50% of his base salary to be determined by the Board of
Directors. Mr. Kennelly receives the benefit of a term life insurance policy in
the amount of $500,000 and a whole life policy in the amount of $100,000. The
premiums of both policies are paid by the Company. Other employee benefits
typically awarded to executive officers of financial institutions are also
provided. In addition, the agreement provides that upon a change in control of
the Company, the term of Mr. Kennelly's employment is automatically extended for
a period of five

9
12

years. If following a change in control of the Company, Mr. Kennelly's
responsibilities are reduced, he is required to be relocated outside of
Mecklenburg County, or similar action is taken, Mr. Kennelly may terminate his
employment and collect the remainder of the compensation that would be due for
the remaining scheduled term of the agreement. The agreement also contains
provisions prohibiting Mr. Kennelly from competing with the Company for a period
of two years if he resigns (other than in the circumstances described in the
foregoing sentence). The Company is permitted under the agreement to terminate
Mr. Kennelly's employment for cause or for any other reason, provided that, if
it terminates Mr. Kennelly's employment without cause, it must continue to pay
his salary and to provide certain other benefits for the remainder of the
scheduled term. Mr. Kennelly may resign his employment at any time.

The Company maintains a defined benefit plan for Mr. Kennelly that will
pay him or his beneficiary a monthly retirement benefit of $8,315 for ten years
after his retirement age of 62 or older or will pay his beneficiary that monthly
amount for ten years if he dies at any age before retiring. In addition, Mr.
Kennelly may elect to take early retirement prior to age 62 and receive a
reduced monthly benefit based on the number of years he works with the Company
after the date the plan was adopted, which was December 31,1999. Mr. Kennelly's
early retirement benefit at December 31, 2003 would be approximately 50% of his
full benefit upon retirement at age 62, and then increases at a rate of
approximately six to eight additional percentage points per year until he
reaches age 62. The plan provides that the level of Mr. Kennelly's retirement
benefits accelerates upon a change in control of the Company.

The Company also maintains a defined contribution plan for Mr. Kennelly
which permits Mr. Kennelly to defer a portion of his annual compensation until
retirement. Amounts Mr. Kennelly elects to defer are credited to an account
which accrues a return as if the amounts were invested in one of four specified
publicly available mutual funds that is designated annually by Mr. Kennelly.
Amounts deferred under the plan and accrued returns are paid to Mr. Kennelly
over a twelve-year period following the termination of his employment, except if
his employment is terminated due to his death in which case these amounts are
paid to his beneficiary over a five-year period.

Mr. Kennedy entered into an employment agreement dated March 24, 1994
to secure his services. The agreement has an initial two-year term which
automatically extends so that the remaining term is not less than one year.
Under the agreement, Mr. Kennedy is paid a base salary of $140,000 per year. Mr.
Kennedy is eligible for an annual bonus. The Company will be permitted under the
agreement to terminate employment for cause or for any other reason, provided
that if it terminates employment without cause, it must continue to pay salary
for the remainder of the term of the contract. Mr. Kennedy may resign his
employment at any time.

CERTAIN TRANSACTIONS

Certain of the officers and directors of the Company and their
associates have deposit accounts with the Bank and have incurred loans from the
Bank. All such transactions between the Bank and officers, directors and their
associates were made in the ordinary course of business on substantially the
same terms, including interest rates and collateral, as those prevailing at the
time for comparable transactions with independent third parties and did not
involve more than the normal risk of collectability or present other unfavorable
features. As of December 31, 2000, loans to officers, directors and principal
shareholders of the Company and to affiliates of such persons totaled
approximately $7,699,679. The maximum amount in loans and commitments to extend
credit since January 1, 2000 to officers, directors and principal shareholders
was $7,701,120.

The Bank expects to continue to enter into transactions in the ordinary
course of business on similar terms with officers, directors and principal
shareholders (and their affiliates) of the Company.

The Company and Financial Network Investment Corporation (FNIC) have
entered into an agreement pursuant to which FNIC makes investments in mutual
funds and other securities available to

10
13

customers on the Company's premises. This agreement will continue in force
between the parties unless terminated by 30 days' written notice given at any
time by either party. Pursuant to this agreement, FNIC pays to the Company an
amount of rent determined on a quarterly basis in return for FNIC's use of
approximately 150 square feet of office space plus other Company amenities at
the Company's main office. During fiscal year 2000, the Company received
$175,000 from FNIC pursuant to this agreement. It is anticipated that the
Company will receive rental payments of approximately $276,000 during 2001. Mr.
Larry Carroll, a Company director is a regional director of FNIC, and it is the
Company's understanding that Mr. Carroll is paid a commission by FNIC based on
the volume of business generated by FNIC's offices in portions of the eastern
United States, including the FNIC office located on the Company's premises.
Prior to entering into the agreement with FNIC, the Company sought proposals
from several firms offering services similar to FNIC, and FNIC's proposal was
deemed by the Company's Board of Directors to be the most economically
advantageous to the Company.

During 2000 the Company paid $60,000 to Morehead Properties as
compensation for services relating to the purchase of real estate for the
development of a future branch office in the Lake Norman community. Morehead
Properties is owned jointly by Henry and Averill Harkey who serve as directors
of the Company.

RATIFICATION OF SELECTION OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS

The Board of Directors and the Audit Committee have selected KPMG LLP
("KPMG") as the Company's independent certified public accountants for the year
ending December 31, 2001, subject to ratification by the shareholders. KPMG has
served as the Company's independent certified public accountants since 2000.
KPMG was retained to provide tax accounting services and to provide general
accounting advice. In making this selection, the Board of Directors and the
Audit Committee considered whether the engagement by the Company of KPMG for
services other than audit services was compatible with KPMG's independence.
Representatives of KPMG LLP are expected to be present at the Annual Meeting
with the opportunity to make a statement if they desire to do so, and such
representatives are expected to be available to respond to appropriate
questions.

For the past two years, the Bank's financial statements (and hence the
Company's financial statements for these periods) have been audited by
PricewaterhouseCoopers LLP. In September 2000, the Company's Board of Directors,
upon recommendation by the Audit Committee, dismissed PricewaterhouseCoopers LLP
as the Company's independent accountants and engaged KPMG. The report of
PricewaterhouseCoopers LLP on the financial statements of the Bank in prior
years did not contain an adverse opinion or disclaim any opinion and did not
include any qualification or modification regarding the scope of its audit or
application of accounting principles.

AUDIT FEES

The aggregate fees paid to KPMG in connection with its audit of the
Company's financial statements in the Company's 2000 Annual Report to
Shareholders and for review of the financial statements included in the
Company's and the Bank's quarterly reports on Form 10-QSB filed in 2000 were
$54,500.

ALL OTHER FEES

The aggregate fees paid to KPMG during the year ended December 31, 2000
for all other services were $25,000.

11
14

AUDIT COMMITTEE REPORT

The Audit Committee reviews the Company's financial reporting process
on behalf of the Board of Directors. Management has the primary responsibility
for the financial statements and the reporting process. The Company's
independent auditors are responsible for expressing an opinion on the conformity
of our audited financial statements to generally accepted accounting principles.

In this context, the Audit Committee has reviewed and discussed with
management and the independent auditors the audited financial statements as of
and for the year ended December 31, 2000. The Audit Committee has discussed with
the independent auditors the matters required to be discussed by Statement on
Auditing Standards No. 61 (Communication with Audit Committees). In addition,
the Audit Committee has received from the independent auditors the written
disclosures and letter required by Independence Standards Board No. 1
(Independence Discussions with Audit Committees) and discussed with them their
independence from the Company and its management.

Based on the reviews and discussions referred to above, the Audit
Committee recommended to the Board of Directors that the audited financial
statements be included in the Company's Annual Report on SEC Form 10-KSB for the
year ended December 31, 2000, for filing with the Securities and Exchange
Commission.

James L. Montag, Chairman

James L. Moore

William O. Musgrave

Victoria S. Sutton

Jeffry V. Mullins

SHAREHOLDERS' PROPOSALS

Any shareholder of the Bank desiring to present a proposal for
inclusion in the Bank's proxy statement for the Annual Meeting of Shareholders
to be held in 2002 must deliver the proposal to the executive offices of the
Bank no later than December 16, 2001. Only those proposals that are proper for
shareholder action and otherwise proper may be included in the Company's proxy
statement. Individuals appointed as proxies in connection with the Annual
Meeting of Shareholders to be held in 2002 will have discretion to vote on any
proposal presented at the meeting by a shareholder unless the shareholder gives
the Bank written notice of the proposal no later than March 1, 2002.

By Order of the Board of Directors

Henry A. Harkey Kevin T. Kennelly
Chairman of the Board President and Chief Executive Officer

Charlotte, North Carolina
April 15, 2001

12
15

PARK MERIDIAN FINANCIAL CORPORATION
CHARTER OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS

I. AUDIT COMMITTEE PURPOSE

The Audit Committee is appointed by the Board of Directors to assist
the Board in fulfilling its oversight responsibilities. The Audit
Committee's primary duties and responsibilities are to:

o Monitor the integrity of the Company's financial reporting
process and systems of internal controls regarding finance,
accounting, and legal compliance.

o Monitor the independence and performance of the Company's
independent auditors and internal auditing department.

o Provide an avenue of communication among the independent
auditors, management, the internal auditing department, and
the Board of Directors.

o Encourage adherence to, and continuous improvement of, the
Company's policies, procedures, and practices at all levels.

o Review areas of potential significant financial risk to the
Company.

The Audit Committee has the authority to conduct any investigation
appropriate to fulfilling its responsibilities, and it has direct
access to the independent auditors as well as anyone in the
organization. The Audit Committee has the ability to retain, at the
Company's expense, special legal, accounting, or other consultants or
experts it deems necessary in the performance of its duties.

ARTICLE III. AUDIT COMMITTEE COMPOSITION AND MEETINGS

Audit Committee members shall meet the requirements of the NASD
Exchange. The Audit Committee shall be comprised of three or more
directors as determined by the Board, each of whom shall be independent
nonexecutive directors(1), free from any relationship that would
interfere with the exercise of his or her independent judgment. All
members of the Committee shall have a basic understanding of finance
and accounting and be able to read and understand

- -----------------------
(1) The NASD has established the following criteria for assessing independence:

o Former employees. Must be a minimum of three years.
o Family members of former employees. Must be a minimum of three
years.
o Director compensation. Compensation from the Company
(excluding direct board compensation) limited to $60,000 per
year.
o Business relationships - If the director's employer receives
revenue in excess of $200,000 per year, or 5 percent of its
total revenue, the director is not considered independent.
o An audit committee member's compensation cannot be impacted by
an employee of the Company.

NASD/AMEX allow all independence rules to be waived for one member as long as
he/she is not a current employee or family member. This would generally need to
be approved by the board and disclosed in the Company's next proxy statement.

fundamental financial statements, and at least one member of the
Committee shall have accounting or related financial management
expertise.

Audit Committee members shall be appointed by the Board on
recommendation of the Nominating Committee. If an audit committee Chair
is not designated or present, the members of the Committee may
designate a Chair by majority vote of the Committee membership.

The Committee shall meet at least four times annually, or more
frequently as circumstances dictate. The Audit Committee Chair shall
prepare and/or approve an agenda in advance of each meeting. The
Committee should meet privately in executive session at least annually
with management, the director of the internal auditing department, the
independent auditors, and as a committee to discuss any matters that
the Committee or each of these groups believe should be discussed. In
addition, the Committee, or at least its Chair, should communicate with
management and the independent auditors quarterly to review the
Company's financial statements and significant findings based upon the
auditors limited review procedures.

III. AUDIT COMMITTEE RESPONSIBILITIES AND DUTIES

Review Procedures

o Review and reassess the adequacy of this Charter at least
annually. Submit the charter to the Board of Directors for
approval and have the document published at least every three
years in accordance with SEC regulations.

o Review the Company's annual audited financial statements prior
to filing or distribution. Review should include discussion
with management and independent auditors of significant issues
regarding accounting principles, practices, and judgments.

o In consultation with the management, the independent auditors,
and the internal auditors, consider the integrity of the
Company's financial reporting processes and controls. Discuss
significant financial risk exposures and the steps management
has taken to monitor, control, and report such exposures.
Review significant findings prepared by the independent
auditors and the internal auditing department together with
management's responses including the status of previous
recommendations.

o Review with financial management and the independent auditors
the company's quarterly financial results prior to the filing
of the company's quarterly financial statements. Discuss any
significant changes to the Company's accounting principles and
any items required to be communicated by the independent
auditors in accordance with SAS 61 (see item 9). The Chair of
the Committee may represent the entire Audit Committee for
purposes of this review.

Independent Auditors

o The independent auditors are ultimately accountable to the
Audit Committee and the Board of Directors. The Audit
Committee shall review the independence and performance of the
auditors and annually recommend to the Board of Directors the
appointment of the independent auditors or approve any
discharge of auditors when circumstances warrant.

o Approve the fees and other significant compensation to be paid
to the independent auditors.

o On an annual basis, the Committee should review and discuss
with the independent auditors all significant relationships
they have with the Company that could impair the auditors'
independence.

o Review the independent auditors audit plan - discuss scope,
staffing, locations, reliance upon management, and internal
audit and general audit approach.

o Prior to publishing the year-end financial statements, discuss
the results of the audit with the independent auditors.
Discuss certain matters required to be communicated to audit
committees in accordance with AICPA SAS 61.(2)

o Consider the independent auditors' judgments about the quality
and appropriateness of the Company's accounting principles as
applied in its financial reporting.

o Discuss with management and the independent auditors the
quality of the accounting principles and underlying estimates
used in the preparation of the Company's financial statements.

ITEM 1. INTERNAL AUDIT DEPARTMENT AND LEGAL COMPLIANCE

o Review the budget, plan, changes in plan, activities,
organizational structure, and qualifications of the internal
audit department, as needed

o Review the appointment, performance, and replacement of the
senior internal audit executive.

o Review significant reports prepared by the internal audit
department together with management's response and follow-up
to these reports.

o On at least an annual basis, review with the Company's
counsel, any legal matters that could have a significant
impact on the organization's financial statements, the
Company's compliance with applicable laws and regulations, and
inquiries received from regulators or governmental agencies.

- -----------------------
(2) Statement of Auditing Standards (SAS) No. 61 requires that auditors discuss
certain matters with audit committees of all SEC engagements. The communication
may be in writing or oral and may take place before or after the financial
statements are issued. Items to be communicated include:

o The auditor's responsibility under Generally Accepted Auditing
Standards (GAAS);
o Significant accounting policies;
o Management judgments and accounting estimates;
o Significant audit adjustments;
o Other information in documents containing audited financial statements;
o Disagreements with management - including accounting principles, scope
of audit, disclosures;
o Consultation with other accountants by management;
o Major issues discussed with management prior to retention; and
o Difficulties encountered in performing the audit.

o Review all reports concerning any significant fraud or
regulatory noncompliance that occurs at the Company. This
review should include consideration of the internal controls
that should that should be strengthened to reduce the risk of
a similar event in the future.

Other Audit Committee Responsibilities

o Annually prepare a report to shareholders as required by the
Securities and Exchange Commission. The report should be
included in the Company's annual proxy statement.

o Perform any other activities consistent with this Charter, the
Company's by-laws, and governing law, as the Committee or the
Board deems necessary or appropriate.

o Maintain minutes of meetings and periodically report to the
Board of Directors on significant results of the foregoing
activities.

o Report at least semi-annually, or as deemed necessary, to the
full board. In addition, summarized minutes from Committee
meeting shall be distributed to each board member at least one
week prior to subsequent Board of Directors meeting.

Front
- --------------------------------------------------------------------------------
PARK MERIDIAN FINANCIAL CORPORATION
Revocable Proxy ANNUAL MEETING OF SHAREHOLDERS
to be held on May 23, 2001

This proxy is Solicited on behalf of the Board of Directors.

The undersigned hereby appoints Bryan F. Kennedy, III and Joseph M. Dodson as
Proxies, each with the power to appoint his substitute, and hereby authorizes
them to represent and to vote, as designated below, all the shares of common
stock of Park Meridian Financial Corporation (the "Company") held on record by
the undersigned on March 31, 2001, at the annual meeting of shareholders to be
held on May 23, 2001 or any adjournment thereof.

1. ELECTION OF DIRECTORS for terms expiring in 2004

[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY
(except as marked to the contrary below) to vote for all nominees
listed below

(INSTRUCTION: To withhold authority to vote for any nominee(s) strike a
line through the name(s) in the list below.)

Robert F. Gilley Kevin T. Kennelly James L. Moore, Jr.
Jeffry V. Mullins J. Ralph Squires,

2. PROPOSAL TO RATIFY THE BOARD OF DIRECTORS' SELECTION OF KPMG LLP as the
Company's independent public accountants

[ ] FOR [ ] AGAINST [ ] ABSTAIN

3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

Please sign and date on the reverse side and
return in the enclosed postage-prepaid envelope.
- --------------------------------------------------------------------------------

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

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE PROPOSALS AND THIS
PROXY WILL BE VOTED FOR THE PROPOSAL TO RATIFY THE SELECTION OF KPMG LLP AND FOR
THE ELECTION OF DIRECTORS UNLESS THE SHAREHOLDER DIRECTS OTHERWISE, IN WHICH
CASE IT WILL BE VOTED AS DIRECTED.

The undersigned acknowledges receipt of the Notice of Meeting and Proxy
Statement dated April 15, 2001, and revokes all proxies heretofore given by the
undersigned.

Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, as executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.

DATED: , 2001
-------------------------

--------------------------------------
Signature

--------------------------------------
Signature if held jointly

PLEASE MARK, SIGN, DATE AND RETURN THE
PROXY CARD PROMPTLY USING THE ENCLOSED
POSTAGE-PREPAID ENVELOPE

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