764038--3/16/2009--SCBT_FINANCIAL

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{stock, price, share}

{condition, economic, financial}

{loan, real, estate}

{regulation, change, law}

{loss, insurance, financial}

{financial, litigation, operation}

{cost, operation, labor}

{competitive, industry, competition}

{acquisition, growth, future}

{capital, credit, financial}

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{provision, law, control}

{personnel, key, retain}

{system, service, information}

{stock, price, operating}

Recent negative developments in the financial industry, the domestic and international credit markets, and the economy in general may adversely affect our operations and results. There can be no assurance that recently enacted legislation will help stabilize the U.S. financial system. Our estimated allowance for loan losses may be inadequate and an increase in the allowance would reduce earnings. We are exposed to higher credit risk by commercial real estate, commercial business, and construction lending. Our business is predominately in two states, South Carolina, and Mecklenburg County of North Carolina; therefore, continuation of the economic downturn in South Carolina and this North Carolina County could negatively impact results from operations and financial condition. A significant portion of our loan portfolio is secured by real estate, and events that negatively impact the real estate market could hurt our business. Liquidity needs could adversely affect our results of operations and financial condition. We may decide to make future acquisitions, which could dilute current shareholders' stock ownership and expose us to additional risks. We may be exposed to difficulties in combining the operations of acquired entities such as TSB into our own operations, which may prevent us from achieving the expected benefits from our acquisition activities. New or acquired banking office facilities and other facilities may not be profitable. We are exposed to a need for additional capital resources for the future and these capital resources may not be available when needed or at all. Our net interest income may decline based on the interest rate environment. We are exposed to the possibility that more prepayments may be made by customers to pay down loan balances, which could reduce our interest income and profitability. We may not be able to adequately anticipate and respond to changes in market interest rates. We may be adversely affected by the soundness of other financial institutions. We could experience a loss due to competition with other financial institutions. We depend on the accuracy and completeness of information about clients and counterparties. The accuracy of our financial statements and related disclosures could be affected because we are exposed to conditions or assumptions different from the judgments, assumptions or estimates used in our critical accounting policies. We are exposed to the possibility of technology failure. We are exposed to a possible loss of our employees and critical management team. The FDIC Deposit Insurance assessments that we are required to pay may materially increase in the future, which would have an adverse effect on our earnings. Negative public opinion surrounding our company and the financial institutions industry generally could damage our reputation and adversely impact our earnings. Because of our participation in the U.S. Treasury Department's CPP, we are subject to several restrictions including restrictions on compensation paid to our executives and other employees. Legislation or regulatory changes could cause us to seek to repurchase the preferred stock and the warrant that we sold to the U.S. Treasury pursuant to the CPP. We are subject to extensive regulation that could restrict our activities and impose financial requirements or limitations on the conduct of our business and limit our ability to receive dividends from our bank. We are exposed to declines in the value of qualified pension plan assets or unfavorable changes in laws or regulations that govern pension plan funding, which could require us to provide significant amounts of funding for our qualified pension plan. We are exposed to further changes in the regulation of financial services companies. Risks Related to an Investment in Our Common and Preferred Stock Our ability to pay cash dividends is limited, and we may be unable to pay future dividends even if we desire to do so. The Series T Preferred Stock impacts net income available to our common shareholders and earnings per common share, and the warrant we issued to the U.S. Treasury may be dilutive to holders of our common stock. If we are unable to redeem the Series T Preferred Stock after five years, we will be required to make higher dividend payments on this stock, thereby substantially increasing our cost of capital. We may issue additional shares of stock or equity derivative securities that will dilute the percentage ownership interest of existing shareholders and may dilute the book value per share of our common stock and adversely affect the terms on which we may obtain additional capital. Our stock price may be volatile, which could result in losses to our investors and litigation against us. Future sales of our stock by our shareholders or the perception that those sales could occur may cause our stock price to decline. The existence of outstanding stock options issued to our current or former executive officers, directors, and employees may result in dilution of your ownership and adversely affect the terms on which we can obtain additional capital. We have discretion in using/applying the net proceeds from our sale in October of 2008 of 1,010,000 shares of common stock to certain accredited investors pursuant to a private placement transaction and the net proceeds from the CPP transaction with the U.S. Treasury, and our profitability and the value of our common stock could be adversely affected if we fail to use the funds effectively. State law and provisions in our articles of incorporation or bylaws could make it more difficult for another company to purchase us, even though such a purchase may increase shareholder value. Holders of the Series T preferred stock have rights that are senior to those of our common shareholders. Holders of the Series T preferred stock may, under certain circumstances, have the right to elect two directors to our board of directors. Holders of the Series T preferred stock have limited voting rights.

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764038--3/16/2009--SCBT_FINANCIAL_CORP