The stock of South Carolina's biggest thrift, First Savings Bank, has been soaring on rumors of takeover by a large southeastern bank.

Meanwhile, a principal of the investor group with the biggest position in the thrift expressed confidence it will be sold soon, probably to a big bank.

"The market fully expects. a deal to be cut," Jerry Shearer of Mid-Atlantic Investors said on Monday. The Columbia-based partnership owns nearly 10%.

The Greenville-based thrift, which has $2 billion of assets, saw its stock jump 13% on unusually heavy volume on June 9 to $11 a share. The next day, it confirmed "preliminary discussions" about a takeover, but has not elaborated.

Signs Point to First Union

Shares of the thrift, which has a tangible book value of $10.35 a share, were changing hands at $13.50 a share Tuesday afternoon after closing at $14 on Monday.

The two most likely buyers, according to market sources, are First Union Corp., the North Carolina-based regional giant, and Alabama's SouthTrust Corp. SouthTrust, however, has only $284 million of assets in South Carolina.

First Union, by contrast, is that state's third-largest bank, with $3 billion of in-state assets and 65 branches. Analysts said it could realize substantial savings by consolidating the thrift's back office operations and 57 branches with its own.

And First Union is following a strategy of increasing local market concentration as a way to lower deposit rates and sustain wide net interest margins. "We believe that of all the potential acquirers, the best fit would be First Union," Mr. Shearer said.

Neither First Union nor SouthTrust would comment.

Mr. Shearer's opinion, however, carries weight. Mid-Atlantic was instrumental in the sale last year of South Carolina Federal Corp. in Columbia to First Union for $78.7 million, or 1.4 times book value for the thrift.

|Didn't Pick or Choose"

"We encouraged them to sell [but] we didn't pick or choose the acquirer," said Mr. Shearer, whose firm bought more than 9% of South Carolina Federal's stock in early 1992. "It's the same thing we're doing with The First of Greenville."

The thrift has been a profitable but mediocre performer in recent years.

It earned $7.2 million for the nine months ended March 31, up 18% from the comparable year-earlier period. But its return on assets remains slim, at 0.48%.

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