SCHEDULE 14A
(RULE 14A-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )

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 Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12

CAROLINA FIRST BANCSHARES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the 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)(1) 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 was 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:
2
CAROLINA FIRST BANCSHARES, INC.
402 EAST MAIN STREET
LINCOLNTON, NORTH CAROLINA 28092

March 14, 1997

Dear Shareholders:

You are cordially invited to attend the 1997 Annual Meeting of
Shareholders of Carolina First BancShares, Inc. which will be held in the
Lincoln Cultural Center, 403 East Main Street, Lincolnton, North Carolina, on
Tuesday, April 15, 1997 at 7:00 P.M. local
time.

I hope you are planning to attend the Meeting so that you can vote your
shares in person and become acquainted with members of our Board of Directors
and our management team. At the Meeting, shareholders will be asked to elect
eight directors to serve one-year terms. Even if you are planning to attend the
meeting, please complete the enclosed proxy card and return it to us so that
your shares may be voted. You will still be able to vote your shares in person
if you attend the Meeting.

Your support during the last year is sincerely appreciated, and with
your continued support, we look forward to 1997.

If you have any questions about the Proxy Statement or the 1996 Annual
Report, please contact Jan H. Hollar at (704) 732-2222.

We look forward to seeing you on April 15th.

Sincerely,

/s/ D. Mark Boyd, III
----------------------
D. Mark Boyd, III
Chairman of the Board

PLEASE FILL IN, DATE, SIGN AND MAIL PROMPTLY THE ACCOMPANYING PROXY IN THE
POSTAGE PREPAID RETURN ENVELOPE FURNISHED FOR THAT PURPOSE, WHETHER OR NOT YOU
PLAN TO ATTEND THE MEETING.

CAROLINA FIRST BANCSHARES, INC.
402 EAST MAIN STREET
LINCOLNTON, NORTH CAROLINA 28092

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
to be held on
April 15, 1997

Notice is hereby given that the 1997 Annual Meeting of Shareholders
(the "Meeting") of Carolina First BancShares, Inc. (the "Company"), will be held
in the Lincoln Cultural Center, 403 East Main Street, Lincolnton, North Carolina
on Tuesday, April 15, 1997 at 7:00 P.M., local time, for the following purposes:

1. To elect John R. Boger, Jr., D. Mark Boyd, III, James E. Burt,
III, Charles A. James, Samuel C. King, Jr., Harry D. Ritchie,
L.D. Warlick, Jr., and Estus B. White to serve as directors of
the Company for a one-year term and until their successors are
elected and qualified;

2. To transact such other business as may properly come before the
meeting or any adjournments thereof.

The enclosed Proxy Statement explains these proposals. We urge you to
read these materials carefully.

Only those shareholders of record at the close of business on March 5,
1997 are entitled to notice of and to vote at the Meeting or any adjournments or
postponements thereof.

You are cordially invited to attend the Meeting. WHETHER OR NOT YOU
PLAN TO ATTEND THE MEETING IN PERSON, YOU ARE REQUESTED TO COMPLETE, DATE AND
SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED POSTAGE PAID
ENVELOPE. IF YOU NEED ASSISTANCE IN COMPLETING YOUR PROXY, PLEASE CALL THE
UNDERSIGNED AT (704) 732-2222.

THE COMPANY'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR
APPROVAL OF THE PROPOSALS PRESENTED.

By Order of the Board of Directors,

/s/ Jan H. Hollar
----------------------------
Jan H. Hollar
Secretary

Lincolnton, North Carolina
March 14, 1997

CAROLINA FIRST BANCSHARES, INC.
PROXY STATEMENT FOR THE ANNUAL MEETING
OF SHAREHOLDERS TO BE HELD ON APRIL 15, 1997

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

INTRODUCTION

This Proxy Statement is furnished to shareholders of Carolina First
BancShares, Inc., a North Carolina corporation (herein, unless the context
otherwise requires, together with its subsidiaries, the "Company"), in
connection with the solicitation of proxies by the Company's Board of Directors
for use at the Annual Meeting of Shareholders to be held at 7:00 P.M. local time
in the Lincoln Cultural Center, 403 East Main Street, Lincolnton, North Carolina
on Tuesday, April 15, 1997, and at any adjournments or postponements thereof
(the "Meeting"). The Meeting will be held for the purposes of (i) electing John
R. Boger, Jr., D. Mark Boyd, III, James E. Burt, III, Charles A. James, Samuel
C. King, Jr., Harry D. Ritchie, L. D. Warlick, Jr., and Estus B. White as
directors of the Company and (ii) transacting such other business as may
properly come before the Meeting.

The Company's principal executive offices are located at 402 East Main
Street, Lincolnton, North Carolina 28092, and the mailing address is P.O. Box
657, Lincolnton, North Carolina 28093, telephone number (704) 732-2222. This
Proxy Statement is dated March 14, 1997, and was mailed to shareholders of the
Company on or about that date.

SHAREHOLDERS ENTITLED TO VOTE

Only shareholders of record of the Company at the close of business on
March 5, 1997 (the "Record Date") are entitled to notice of, and to vote at, the
Meeting. Each share of the $2.50 par value common stock of the Company (herein
sometimes referred to as the "Shares") issued and outstanding on the Record Date
is entitled to one vote on each proposal, except that in the election of
directors, each shareholder may cumulate his votes by giving one candidate the
number of votes equal to the number of directors to be elected multiplied by the
number of his Shares, or by distributing such number of votes among the
candidates. This right of cumulative voting may not be exercised unless a
shareholder or proxy holder announces at the Meeting, before the voting for
directors commences, his intention to vote cumulatively. If such announcement is
made, the chair shall declare that all Shares entitled to vote have the right to
vote cumulatively and shall thereupon grant a recess of not less than one nor
more than four hours, as he shall determine, or of such other period of time as
is unanimously agreed upon. If no such announcement is made, the persons named
in the enclosed proxy do not intend to exercise such right to vote cumulatively.
However, if cumulative voting occurs at the Meeting, Shares represented by
proxies in the accompanying form may be voted cumulatively for fewer than the
entire number of nominees for directors listed herein if any such situation
arises which, in the opinion of the proxy holders, makes such action necessary
or desirable.

On the Record Date, there were 2,054,978 Shares issued and outstanding
which were held by approximately 3,300 persons. Notwithstanding the Record Date
specified above, the Company's stock transfer books will not be closed, and
Shares may be transferred subsequent to the Record Date. However, all votes must
be cast in the names of shareholders of record on the Record Date. Proxies are
being solicited by the Company's Board of Directors and may be revoked prior to
exercise.

VOTES REQUIRED

Electing the nominees for director requires approval by a majority of
the votes cast by the Shares entitled to vote at the Meeting, provided a quorum
is present at the Meeting. The presence, in person or by properly executed
proxy, of the holders of a majority of the outstanding Shares entitled to vote
at the Meeting is necessary to constitute a quorum at the Meeting. Abstentions
will be counted, but "broker non-votes" will not be counted, as Shares present
for purposes of determining the presence of a quorum. Neither abstentions nor
"broker non-votes"

will be counted as votes cast for purposes of determining whether a particular
proposal has received sufficient votes for approval.

PROXIES

Shares of Carolina First Common Stock represented by properly executed
proxies, if such proxies are received in time and are not revoked, will be voted
in accordance with the instructions on the proxies. If no instructions are
indicated, such proxies will be voted in favor of (i) the election of all
nominees for directors, and (ii) in the best judgment of the persons designated
in such proxies as to any other matters which may properly come before the
Meeting. Shareholders who have given a proxy may revoke it at any time prior to
its exercise by (i) giving written notice to Jan H. Hollar at the Company, or
(ii) properly submitting to the Company a properly-executed proxy bearing a
later date, or (iii) voting in person at the Meeting.

PRINCIPAL SHAREHOLDERS

As of January 31, 1997, there were no persons known to the Company who
were beneficial owners of more than 5% of the Company's outstanding Shares other
than D. Mark Boyd, III, P.O. Box 399, Lincolnton, North Carolina 28093, who is a
director of the Company, and who beneficially held on that date 192,701 Shares,
or 9.39% of the total Shares outstanding. See "Proposal I - Election of
Directors."

As of January 31, 1997, the number of Shares owned beneficially by all
directors and executive officers of the Company as a group (12 persons) was
approximately 297,817, or 14.47% of the total Shares outstanding.

PROPOSAL I

ELECTION OF DIRECTORS

The Company's Board of Directors has nominated the persons named below
for election as directors to hold office until the next annual meeting of the
shareholders of the Company and until their successors shall have been elected
and qualified. It is believed that all of the nominees will be available and
able to serve as directors. If for any reason any of these persons should not be
available or able to serve, the proxies may exercise discretionary authority to
vote for substitutes proposed by the Company's Board of Directors.

Under the Company's Bylaws, the Board of Directors of the Company shall
consist of not less than three nor more than 25 members, the number of which
shall be fixed and determined from time to time either by resolution of the
Board of Directors or by resolution of the shareholders. At the 1990 Annual
Meeting of Shareholders, the shareholders approved a proposal fixing the number
of directors at nine. The Company has nominated only eight persons to serve as
directors, leaving one vacancy on the Board. The Company continues to evaluate
possible expansion or other business opportunities through mergers,
consolidations, acquisitions, restructuring or other transactions. Vacancies
provide the Board with flexibility, in its discretion, to fill any or all such
vacancies, by a majority vote of the Board, in the event of such a transaction
or restructuring, or for other appropriate purposes. Proxies may not be voted
for more than eight nominees at the Meeting.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE EIGHT NOMINEES FOR
ELECTION OF DIRECTORS.

The following table sets forth certain information regarding the
nominees for election as directors.

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6

NAME, AGE AND YEAR FIRST BENEFICIAL OWNERSHIP OF SHARES
ELECTED OR APPOINTED A PRINCIPAL EXPERIENCE AND PERCENTAGE OF OUTSTANDING
DIRECTOR OF THE COMPANY DURING THE PAST FIVE YEARS SHARES (1)
- ----------------------- -------------------------- ----------

John R. Boger, Jr. (68) Mr. Boger is a partner in the law firm of 4,798 (2)
1992 Williams, Boger, Grady, Davis & Tuttle, *
P.A., Concord, North Carolina. Mr. Boger
is the Chairman of the Board of Directors
of the Company's subsidiary Cabarrus Bank
of North Carolina ("Cabarrus Bank"), is a
member of the Board of Directors of CT
Communications, Inc. (parent company of
Concord Telephone Company), and a past
President of the Concord Rotary Club and
the Concord / Cabarrus Chamber of
Commerce. John R. Boger, Jr. (68) Mr.
Boger is a partner in the law firm of
4,798(2) 1992 Williams, Boger, Grady,
Davis & Tuttle, * P.A., Concord, North
Carolina. Mr. Boger is the Chairman of
the Board of Directors of the Company's
subsidiary Cabarrus Bank of North
Carolina ("Cabarrus Bank"), is a member
of the Board of Directors of CT
Communications, Inc. (parent company of
Concord Telephone Company), and a past
President of the Concord Rotary Club and
the Concord / Cabarrus Chamber of
Commerce.

D. Mark Boyd, III (59) Mr. Boyd has served as Chairman of the 192,701 (3)
1989 Board and Chief Executive Officer of 9.39%
the Company since its organization
in 1989. Mr. Boyd has served as Chairman
of the Board of the Company's subsidiary
Lincoln Bank of North Carolina ("Lincoln
Bank") since 1983. Since 1993, Mr. Boyd
has served as a member of the North
Carolina State Banking Commission. Mr.
Boyd was also an organizer and presently
is a director of First Gaston Bank of
North Carolina, 17% of the common stock
of which is owned by the Company. First
Gaston Bank's common stock is registered
under the 1934 Act.

James E. Burt, III (59) Mr. Burt has been President of the Company 28,088 (4)
1990 and Lincoln Bank and Chief Executive 1.37%
Officer of Lincoln Bank since 1990.

Charles A. James (50) Mr. James has served as Director of CK 698
1997 subsequently to when it was *
acquired by South Trust Bank of North
1997 Federal from 1983 to 1993 and
Carolina. Mr. James is the President of
Mt. Pleasant Insurance Agency; the
President of Mt. Pleasant Enter- prises,
Inc.; Director of Albemarle Knitting
Corp.; Co-owner of Mt. Pleasant Bonded
Warehouse; Partner of All Secure Storage;
Partner of North Branch Properties and
Partner of Earnhardt Interchange
Properties.

3
7

Samuel C. King, Jr. (49) Mr. King has served as President of King's 12,548 (5)
1989 Office Supply, Inc., an office *
supply company in Lincolnton, since
1977. He has served as a director of
Lincoln Bank since 1983 and as Vice
Chairman since 1992.

Harry D. Ritchie (63) Mr. Ritchie has been the owner of Ritchie 8,869 (6)
1989 Brothers Dairy Farm since 1955. He has *
served as a director of Lincoln Bank
since 1983.

L. D. Warlick, Jr. (57) Mr. Warlick is the President of Warlick 27,602 (7)
1992 Funeral Home, Lincolnton, North Carolina. 1.34%
Mr. Warlick is a past President of
the Lincolnton Rotary Club, Lincoln
County Chapter of the American Red Cross,
past President of Lincoln Medical Center
Board of Directors and United Way
Chairman. He has served as a director of
Lincoln Bank since 1983.

Estus B. White (66) Mr. White is the retired Clerk of Superior 12,623 (8)
1992 Court for Cabarrus County, North Carolina *
Mr. White is a past president of the
Kannapolis Merchants Association. He has
served as a director of Cabarrus Bank
since 1980.

* Less than one percent of outstanding Shares.

(1) Information relating to beneficial ownership of Shares is based upon
"beneficial ownership" concepts set forth in rules of the Securities and
Exchange Commission ("SEC") under Section 13(d) of the 1934 Act. Under
such rules a person is deemed to be a "beneficial owner" of a security if
that person has or shares "voting power," which includes the power to
vote or direct the voting of such security, or "investment power," which
includes the power to dispose or to direct the disposition of such
security. A person is also deemed to be a beneficial owner of any
security of which that person has the right to acquire beneficial
ownership within 60 days. Under these rules, more than one person may be
deemed to be a beneficial owner of the same securities, and a person may
be deemed to be a beneficial owner of securities as to which he may
disclaim beneficial interest.

(2) Includes 237 Shares held by members of Mr. Boger's immediate family, as
to which Shares Mr. Boger may be deemed to share voting and investment
power.

(3) Includes 68,895 Shares held by three corporations of which Mr. Boyd is a
director, president and majority shareholder, 6,597 Shares held by a
profit sharing plan of one such corporation, for which Mr. Boyd is a
member of the Plan Committee, and 21,060 Shares held by members of Mr.
Boyd's immediate family. As to

4
8

all of these Shares, Mr. Boyd may be deemed to share voting and
investment power; however, Mr. Boyd disclaims beneficial ownership.

(4) Includes 1,917 Shares owned by Mr. Burt's wife, as to which Mr. Burt may
be deemed to share voting and investment power.

(5) Includes 410 Shares held by a corporation of which Mr. King is president
and principal shareholder and 5,755 Shares held by Mr. King's family, as
to which Shares Mr. King may be deemed to share voting and investment
power.

(6) Includes 4,510 Shares owned jointly with Mr. Ritchie's wife, as to which
Shares Mr. Ritchie may be deemed to share voting and investment power.

(7) Includes 1,409 Shares held by a corporation of which Mr. Warlick is a
director and president, and 6,436 Shares held by Mr. Warlick's wife and
family members, as to which Shares Mr. Warlick may be deemed to share
voting and investment power.

(8) Includes 8,327 Shares owned jointly with Mr. White's wife, as to which
Mr. White may be deemed to share voting and investment power.

MEETINGS OF THE BOARDS OF DIRECTORS AND COMMITTEES

During 1996, the Company's Board met seven times. Each director attended
at least 75% of the aggregate number of meetings of the Company's Board and its
committees. Each member of the Company's Board who was not an employee of the
Company or its subsidiaries received $200 for each Board meeting attended.

The Board of Directors currently has five standing committees - an
Executive Committee, Compensation Committee, Audit Committee and Nominating
Committee. The Executive Committee, which is comprised of Messrs. Boyd, King and
Ritchie, acts on behalf of the full Board between meetings of the full Board.
The Executive Committee met eight times in 1996, and each member received $150
for each committee meeting attended.

The Compensation Committee reviews salary administration guidelines and
incentive compensation plans and also reviews the Company's Stock Option Plans
to ensure proper administration and compliance. The Compensation Committee,
which is comprised of Messrs. Boyd, King, Ritchie and Warlick, met five times in
1996. Each member of the Compensation Committee received $100 for each meeting
attended.

The Audit Committee reviews all control functions and is comprised of
Messrs. King, Warlick and White. The Audit Committee also recommends on an
annual basis to the Board of Directors a public accounting firm to be engaged as
independent auditors for the Company for the next fiscal year, reviews the plan
for the audit engagement, and reviews financial statements, internal audit plans
and reports, financial reporting procedures, and reports of regulatory
authorities. This Committee periodically reports to the Board of Directors. The
Audit Committee met four times in 1996. Each member of the Audit Committee
received $100 for each meeting attended.

The Nominating Committee nominates officers and directors of the Company.
While nominees recommended by shareholders may be considered, this Committee has
not solicited recommendations. The Nominating Committee, which is comprised of
Messrs. Boyd, King and Ritchie, met one time in 1996, and each member received
$100 for the meeting.

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9

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The following table sets forth certain elements of compensation for the
chief executive officer and the other most highly named compensated executive
officer (collectively, the "executive officers") for each of the last three
calendar years:

Summary Compensation Table

Annual Compensation
------------------- All Other
Name and Position Year Salary Bonus Compensation
(a) (b) (c) (d) (i)
- ----------------- ---- ------ ----- ------------

D. Mark Boyd, III
Chief Execuitive Officer 1996 $ 18,000 $ -- $ 1,796(1)

1995 14,400 -- 1,293(1)

1994 11,420 -- --

James E. Burt, III
President 1996 140,920 30,983 5,385(1)

1995 134,852 20,754 18,691(1)

1994 132,208 16,689 16,145(1)

(1) Amounts shown consist of the Company's profit sharing contribution, matching
contribution to the Carolina First BancShares Profit Sharing Plan and amounts
contributed by the Company to the Deferred Compensation Trust for Carolina First
BancShares, Inc. and Subsidiaries on behalf of the named executive officers.

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10

AGGREGATED OPTIONS/SARS EXERCISED IN 1996
AND 1996 YEAR-END OPTION/SAR VALUES

The following table shows stock option exercises by the named executive
officers during 1996, including the aggregate value of gains on the date of
exercise. In addition, this table includes the number of shares covered by both
exercisable and non-exercisable options as of December 31, 1996. Also reported
are the values for "in-the-money" options, which represent the positive spread
between the exercise price of any such existing options and the year-end price
of the Company's Common Stock.

Number of Value
Securities Unexercised
Unexercised In-the-Money
Options/SARs Options/SARs
at at
Shares FY-End (#) FY-End ($)
Acquired Value Exercisable/ Exercisable/
Name on Exercise Realized Unexercisable Unexcercisable
(a) (b) (c) (d) (e)
----------- -------- ------------- -------------

D. Mark Boyd, III -- -- 0/0 $0/$0

James E. Burt, III -- -- 66,853/0 $1,498,259/$0

EMPLOYMENT AGREEMENTS

As of December 31, 1996, Lincoln Bank entered into a new employment
contract with James E. Burt, III. The contract provides that Mr. Burt shall
remain employed by the Company through January 31, 2000, unless sooner
terminated under the terms thereof.

Either the Company or Mr. Burt may terminate the employment contract at
any time upon 60 days prior written notice. The contract may also be terminated
at the election of the Company for cause, or by reason of Mr. Burt's disability.
In the event employment is terminated without cause by the Company prior to
January 31, 2000, the Company shall continue to pay Mr. Burt's annual salary and
provide certain benefits (except for the annual bonus) for a period of twelve
months after such termination (or until January 31, 2000, whichever occurs
earlier) as severance pay.

In the event the Company experiences a "change in control," as defined in
the employment contract, Mr. Burt shall receive a lump-sum payment equal to his
annual salary and maximum bonus potential for the year in which the change in
control occurs (in addition to his regular compensation if he remains in the
Company's employ after the change in control). In certain circumstances, if Mr.
Burt's employment is terminated after a change in control, he may be entitled to
receive various benefits and compensation for a period of up to 24 months.

As of December 31, 1996, the Company also entered into a Deferred
Compensation Agreement with Mr. Burt that replaces a similar agreement dated
July 2, 1992. This agreement provides that if Mr. Burt retires from the Company
at age 65, or if his employment is terminated without cause after, or within 12
months of, a change in control involving the Company, Mr. Burt shall receive
certain payments for up to 120 months.

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11

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Executive Committee of the Board of Directors serves as the Company's
Compensation Committee. Each of D. Mark Boyd, III and James E. Burt, III served
on the Board of Directors while serving as an executive officer of the Company
during 1996, but abstained from deliberations relating to Company decisions that
specifically related to them.

BOARD AND EXECUTIVE COMMITTEE REPORT ON EXECUTIVE COMPENSATION

Executive compensation at the Company is primarily cash based. Stock
related compensation is also available in the form of incentive stock options
and stock appreciation rights under the Carolina First BancShares, Inc. 1990
Stock Option and Stock Appreciation Rights Plan. Salaries are determined by
assigning job grades based on an assessment of the level of responsibilities and
duties to be performed, and these grades and pay levels, except for the officers
named above, were reviewed and revised in certain cases by the Executive
Committee in 1996. For each of the 33 job grades used by the Company, a salary
range is assigned utilizing an entry level, midpoint and maximum level. Officers
are evaluated at least once a year, and a performance rating is determined by
valuing performance against certain pre-determined principal job
responsibilities and a list of standard performance criteria. This evaluation
produces a numerical rating which is factored into a salary matrix to suggest
the amount of adjustment the officer should receive. Determination of salaries
and salary adjustments is made by the Executive Committee of the Board of
Directors which refer all officer salaries to the full Board for final approval.

The Company also has a cash incentive compensation plan for executive
officers. This plan is based in part on Company performance and in part on
individual performance. Final determination of performance levels is made by the
personnel committee of the Board of Directors which refer the incentive
compensation plan to the full Board for approval at the Bank levels. The
executive committee at the Company level reviews the incentive compensation
plan.

The chief executive officer of the Company received compensation in lieu
of fees for attendance at Board and Committee meetings as described above under
"Meetings of the Board of Directors and Committees". The president received only
cash compensation and has not been granted stock options/SAR in the last fiscal
year.

D. Mark Boyd, III Harry D. Ritchie
John R. Boger, Jr. L.D. Warlick, Jr.
James E. Burt, III Estus B. White
Samuel C. King, Jr.

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12

PERFORMANCE GRAPH

The following graph compares the yearly percentage change in the
cumulative total stockholder return on the Company's Common Stock, with the
cumulative return on Standard & Poor's 500 Stock Index ("S&P 500") and The
Carson Medlin Company's Southeastern Independent Bank Index ("Independent Bank
Index").

The Independent Bank Index is the compilation of the total return to
shareholders over the past five years of a group of 20 independent community
banks located in the southeastern states of Florida, Georgia, North Carolina,
South Carolina, Tennessee, and
Virginia. The banks included are:

Name City State
---- ---- -----

Seacoast Banking Corp. Stuart FL
Capital City Bank Group, Inc. Tallahassee FL
Fidelity National Corp. Atlanta GA
PAB Bankshares, Inc. Valdosta GA
First Charter Corp. Concord NC
Bank of Granite Corp. Granite Falls NC
Carolina First BancShares, Inc. Lincolnton NC
Triangle Bancorp, Inc. Raleigh NC
FNB Financial Services Corp. Reidsville NC
First Bancorp Troy NC
CNB Corporation Conway SC
First Farmers & Merchants Corp. Columbia TN
Pioneer Bancshares, Inc. Chattanooga TN
First Pulaski National Corporation Pulaski TN
National Bankshares Inc. Blacksburg VA
FNB Corporation Christiansburg VA
Second National Financial Corp. Culpeper VA
American National Bankshares, Inc. Danville VA
George Mason Bankshares, Inc. Fairfax VA
Planters Bank & Trust Company Staunton VA

Carolina First BancShares, Inc.
Five Year Performance Index

1991 1992 1993 1994 1995 1996
---- ---- ---- ---- ---- ----

Carolina First BancShares, Inc. 100 105 150 204 294 474
Independent Bank Index - Weighted 100 130 163 197 268 313
S&P 500 Index 100 108 118 120 165 203

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13

CERTAIN TRANSACTIONS

Certain Company directors, officers and principal shareholders, and their
associates, were customers of, or had banking and financial transactions with,
the Company or its subsidiaries in the ordinary course of business during 1996.
Some of the directors of the Company or its subsidiaries are directors,
officers, trustees or principal securities holders of corporations or other
organizations which also were customers of, or had banking and financial
transactions with, the Company or its subsidiaries in the ordinary course of
business during 1996.

All outstanding loans and other transactions with the directors, officers
and principal shareholders of the Company and its subsidiaries 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 other persons and, when made, did not involve more than the
normal risk of collectibility or present other unfavorable features. The
aggregate amount of credit extended to directors, executive officers and
principal shareholders as of December 31, 1996 was $2,388,465 or 6.82% of the
Company's shareholders' equity. In addition to banking and financial
transactions, the Company or its subsidiaries may have had additional
transactions with, or used products or services of, various organizations of
which directors of the Company and its subsidiaries are associated. The Company
provided data processing and other services to First Gaston Bank, during 1996,
for which First Gaston Bank paid $141,959. The Company is the largest
shareholder of First Gaston Bank, and the Company's Chairman is an organizer and
a director of First Gaston Bank. See "PROPOSAL 1 Election of Directors". Except
for the transactions with First Gaston Bank, the amounts involved in such
noncredit transactions have in no case been material in relation to the business
of the Company, its subsidiaries or such other organizations. It is expected
that the Company and its subsidiaries will continue to have similar transactions
in the ordinary course of its business with such individuals and their
associates in the future.

For information about transactions with D. Mark Boyd, III, and James E.
Burt, III, Directors of the Company and the Bank, see "Compensation Committee
Interlocks and Insider Participation".

Securities rules and regulations require certain reports to be filed by
directors and executive officers. To the knowledge of the Company, all filings
were made on a timely basis.

MISCELLANEOUS

SHAREHOLDER PROPOSALS

Any proposal which a Company shareholder intends to be presented at the
annual meeting of shareholders to be held in 1998 must be received by the
Company on or before November 20, 1997. Only proper proposals which are timely
received will be included in the proxy statement and form of proxy.

OTHER MATTERS

Management does not know of any matters to be brought before the Meeting
other than as described in this Proxy Statement. Should any other matters
properly come before the Meeting, the persons designated as proxies will vote in
accordance with their best judgment on such matters.

EXPENSES OF SOLICITATION

The cost of soliciting proxies in the accompanying form will be borne by
the Company. In addition to the use of the mails, proxies may be solicited by
directors, officers or other employees of the Company or its subsidiaries,
personally, by telephone, telegraph or facsimile or other electronic means. The
Company does not expect to pay any compensation for the solicitation of proxies,
but may reimburse brokers, custodians or other persons holding stock in their
names or in the names of nominees for their expenses in sending proxy materials
and the 1996 Annual Report to principals and obtaining their instructions.

10
14

AVAILABILITY OF ANNUAL REPORT

THE COMPANY, UPON REQUEST, WILL PROVIDE SHAREHOLDERS WITH COPIES OF ITS
ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1996, AS FILED WITH
THE SEC. SHAREHOLDERS SHOULD DIRECT THEIR REQUESTS TO: CAROLINA FIRST
BANCSHARES, INC., P.O. BOX 657, LINCOLNTON, NORTH CAROLINA 28093, ATTENTION: MS.
JAN H. HOLLAR, SECRETARY.

11
15

APPENDIX A

CAROLINA FIRST BANCSHARES, INC.
Lincolnton, North Carolina

Annual Meeting of Shareholders - April 15, 1997

The undersigned shareholder of Carolina First BancShares,Inc. (the "Company"),
Lincolnton, North Carolina, hereby constitutes and appoints Cynthia M.
Childress, Sara K. Haire, David M. Boyd and L.D. Warlick, Jr., or any of them,
each with full power of substitution, to vote the number of shares of Company
common stock which the undersigned would be entitled to vote if personally
present at the Annual Meeting of Shareholders to be held at 7:00 p.m., local
time, in the Lincoln Cultural Center at 403 East Main Street, Lincolnton, North
Carolina, on Tuesday, April 15, 1997, or at any adjournments thereof, upon the
proposals as described in the Notice of Annual Meeting of Shareholders and
Proxy Statement, both dated March 14, 1997, the receipt of which is hereby
acknowledged, in the manner specified on the reverse side.

THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED HEREIN BY THE
UNDERSIGNED SHAREHOLDER(S). IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED
"FOR" PROPOSAL 1.

- -------------------------------------------------------------------------------
PLEASE VOTE, DATE AND SIGN ON REVERSE AND
RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
- -------------------------------------------------------------------------------
Please sign exactly as your name(s) appear(s) hereon. Joint owners should
each sign personally. Trustees and other fiduciaries should indicate
capacity in which they sign, and where more than one name appears, a
majority must sign. If the shareholder is a corporation, the signature
should be that of an authorized officer who should state his or her title.
- -------------------------------------------------------------------------------

HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?

____________________________________ _____________________________________

[X] PLEASE MARK VOTES AS IN THIS EXAMPLE

CAROLINA FIRST BANCSHARES, INC.

1. To elect the following nominees to serve as directors of the Company for a
one-year term and until their successors are elected and qualified.

John R. Boger, Jr., D. Mark Boyd, III, James E. Burt, III, Charles A. James,
Samuel C.King, Jr., Harry D. Ritchie, L.D. Warlick, Jr. and Estus B. White

For [ ] Withhold [ ] For All Except [ ]

NOTE: If you do not wish your shares voted "For" a particular nominee, mark
the "For All Except" box and strike a line through the nominee's(s') name(s).
Your shares will be voted for the remaining nominee(s).

2. To transact such other business as may properly come before the meeting or
any adjournments thereof.

THE COMPANY'S BOARD OF DIRECTORS
UNANIMOUSLY RECOMMENDS
A VOTE "FOR" APPROVAL OF THE PROPOSAL 1

Please be sure to sign and date this Proxy.

___________________________________________
Date

___________________________________________
Shareholder sign here

___________________________________________
Co-owner sign here

Mark box at right if you plan to attend the Annual Meeting [ ]

Mark box at right if an address change or comment has been
noted on the reverse side of this card. [ ]