[Letterhead of Hunton & Williams]
October 20, 1998
Fidelity BancShares (N.C.), Inc.
100 South Main Street
Fuquay-Varina, North Carolina 27526
FIDBANK CAPITAL TRUST I
FEDERAL INCOME TAX MATTERS
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Ladies and Gentlemen:
We have acted as special tax counsel to Fidelity
BancShares (N.C.), Inc. (the "Company") in connection with the preparation of a
Registration Statement on Form S-1 (the "Registration Statement"), which has
been filed with the Securities and Exchange Commission under the Securities Act
of 1933, as amended (the "Act"), for the registration under the Act of (1) up to
$23 million aggregate principal amount of Junior Subordinated Deferrable
Interest Debentures (the "Junior Subordinated Debentures") to be issued by the
Company to FIDBANK Capital Trust I, (2) up to 2,300,000 Capital Securities
(liquidation amount $10 per Capital Security) to be issued by FIDBANK Capital
Trust I, and (3) the Company's Guarantee of Capital Securities. The Junior
Subordinated Debentures will be issued pursuant to an indenture between the
Company and the trustee named therein, and the Capital Securities will be issued
pursuant to an amended and restated trust agreement between the Company and the
trustees named therein.
We have reviewed copies of (1) the Registration
Statement and the prospectus included therein (the "Prospectus") and (2) such
other documents as we have deemed necessary or appropriate as a basis for the
opinion set forth below. We have also relied upon, and assumed the accuracy of,
certain written representations made to us by the Company. We have further
assumed (i) that all documents submitted to us as originals are authentic, (ii)
with respect to all documents supplied to us as drafts, that the final, executed
versions of such documents are identical in all material respects to the
versions most recently supplied to us, (iii) that each such final version (when
executed) is valid and enforceable in accordance with its terms, and (iv) that
the Capital Securities will be sold at the offering price stated on the cover of
the Prospectus.
Fidelity BancShares (N.C.), Inc.
October 20, 1998
Page 2
Based on the foregoing, we confirm that the statements
of law and legal conclusions contained in the Prospectus under the caption
"Federal Income Tax Consequences" constitute our opinion, subject to the
assumptions, conditions, and limitations described therein, and that the
discussion thereunder does not omit any material provision with respect to the
matters covered.
Our representation of the Company in connection with the
Capital Securities is limited solely to that of special tax counsel and, except
for our opinion as to certain federal income tax matters as set forth in the
preceding paragraph, we express no opinion on any tax or other legal matter. We
do not undertake to advise you of any changes in our opinion expressed herein
(or under the heading "Federal Income Tax Consequences" in the Prospectus)
resulting from matters that might hereafter arise or be brought to our
attention.
We consent to the filing of this opinion as an exhibit
to the Registration Statement. We also consent to the reference to Hunton &
Williams under the captions "Federal Income Tax Consequences" and "Legal
Matters" in the Prospectus. In giving this consent, we do not admit that we are
in the category of persons whose consent is required by Section 7 of the Act or
the rules and regulations promulgated thereunder by the Securities and Exchange
Commission.
Very truly yours,
/s/ HUNTON & WILLIAMS