Exhibit 4-3

THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED,  OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE  TRANSFERRED,  SOLD OR OTHERWISE  DISPOSED OF EXCEPT WHILE A REGISTRATION
STATEMENT  RELATING  THERETO IS IN EFFECT  UNDER SUCH ACT AND  APPLICABLE  STATE
SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION  UNDER SUCH ACT OR
SUCH LAWS. THIS INSTRUMENT IS ISSUED SUBJECT TO THE RESTRICTIONS ON TRANSFER AND
OTHER PROVISIONS OF A SECURITIES  PURCHASE AGREEMENT BETWEEN THE ISSUER OF THESE
SECURITIES AND THE INVESTOR REFERRED TO THEREIN, A COPY OF WHICH IS ON FILE WITH
THE ISSUER.  THE SECURITIES  REPRESENTED  BY THIS  INSTRUMENT MAY NOT BE SOLD OR
OTHERWISE  TRANSFERRED  EXCEPT IN COMPLIANCE  WITH SAID  AGREEMENT.  ANY SALE OR
OTHER TRANSFER NOT IN COMPLIANCE WITH SAID AGREEMENT WILL BE VOID.



                                     WARRANT
                                   to purchase
                                    450.00450
                            Shares of Preferred Stock

                          of GrandSouth Bancorporation


                           Issue Date: January 9, 2009

1.  Definitions.  Unless the context  otherwise  requires,  when used herein the
following terms shall have the meanings indicated.

         "Board  of  Directors"  means the board of  directors  of the  Company,
including any duly authorized committee thereof.

         "business  day"  means any day except  Saturday,  Sunday and any day on
which banking  institutions in the State of New York generally are authorized or
required by law or other governmental actions to close.

         "Charter"  means,  with  respect  to any  Person,  its  certificate  or
articles of incorporation,  articles of association,  or similar  organizational
document.

          "Company"   means  the  Person   whose   name,   corporate   or  other
organizational  form and  jurisdiction of organization is set forth in Item 1 of
Schedule A hereto.

          "Exchange Act" means the Securities  Exchange Act of 1934, as amended,
or any successor statute, and the rules and regulations promulgated thereunder.

          "Exercise  Price"  means the amount set forth in Item 2 of  Schedule A
hereto.



<PAGE>

         "Expiration Time" has the meaning set forth in Section 3.

         "Issue Date" means the date set forth in Item 3 of Schedule A hereto.

         "Liquidation Amount" means the amount set forth in Item 4 of Schedule A
hereto.

         "Original  Warrantholder"  means the United  States  Department  of the
Treasury.  Any  actions  specified  to be  taken by the  Original  Warrantholder
hereunder may only be taken by such Person and not by any other Warrantholder.

          "Person"  has  the  meaning  given  to it in  Section  3(a)(9)  of the
Exchange Act and as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act.

         "Preferred  Stock"  means the series of perpetual  preferred  stock set
forth in Item 5 of Schedule A hereto.

         "Purchase Agreement" means the Securities Purchase Agreement - Standard
Terms incorporated into the Letter Agreement,  dated as of the date set forth in
Item 6 of Schedule A hereto,  as amended from time to time,  between the Company
and the United  States  Department  of the Treasury  (the  "Letter  Agreement"),
including all annexes and schedules thereto.

          "Regulatory  Approvals" with respect to the  Warrantholder,  means, to
the extent  applicable and required to permit the Warrantholder to exercise this
Warrant for shares of Preferred  Stock and to own such  Preferred  Stock without
the Warrantholder being in violation of applicable law, rule or regulation,  the
receipt  of  any  necessary   approvals  and   authorizations  of,  filings  and
registrations  with,  notifications  to, or  expiration  or  termination  of any
applicable waiting period under, the  Hart-Scott-Rodino  Antitrust  Improvements
Act of 1976, as amended, and the rules and regulations thereunder.

         "SEC" means the U.S. Securities and Exchange Commission.

         "Securities  Act" means the Securities Act of 1933, as amended,  or any
successor statute, and the rules and regulations promulgated thereunder.

         "Shares" has the meaning set forth in Section 2.

          "Warrantholder" has the meaning set forth in Section 2.

         "Warrant"   means  this  Warrant,   issued  pursuant  to  the  Purchase
Agreement.

         2. Number of Shares;  Exercise  Price.  This certifies  that, for value
received,  the United States Department of the Treasury or its permitted assigns
(the "Warrantholder") is entitled,  upon the terms and subject to the conditions
hereinafter set forth, to acquire from the Company,  in whole or in part,  after
the receipt of all applicable Regulatory  Approvals,  if any, up to an aggregate
of the  number of fully paid and  nonassessable  shares of  Preferred  Stock set
forth in Item 7 of Schedule A hereto  (the  "Shares"),  at a purchase  price per
share of Preferred Stock equal to the Exercise Price.



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<PAGE>

         3.  Exercise  of  Warrant;  Term.  Subject  to Section 2, to the extent
permitted by applicable laws and  regulations,  the right to purchase the Shares
represented  by  this  Warrant  is  exercisable,  in  whole  or in  part  by the
Warrantholder, at any time or from time to time after the execution and delivery
of this  Warrant by the Company on the date  hereof,  but in no event later than
5:00 p.m.,  New York City time on the tenth  anniversary  of the Issue Date (the
"Expiration  Time"), by (A) the surrender of this Warrant and Notice of Exercise
annexed hereto,  duly completed and executed on behalf of the Warrantholder,  at
the principal  executive  office of the Company located at the address set forth
in Item 8 of Schedule A hereto (or such other office or agency of the Company in
the United States as it may designate by notice in writing to the  Warrantholder
at the address of the Warrantholder  appearing on the books of the Company), and
(B) payment of the Exercise  Price for the Shares thereby  purchased,  by having
the Company withhold, from the shares of Preferred Stock that would otherwise be
delivered to the  Warrantholder  upon such exercise,  shares of Preferred  Stock
issuable upon exercise of the Warrant with an aggregate Liquidation Amount equal
in  value  to the  aggregate  Exercise  Price as to  which  this  Warrant  is so
exercised.

         If the  Warrantholder  does not exercise  this Warrant in its entirety,
the  Warrantholder  will be  entitled  to  receive  from  the  Company  within a
reasonable  time,  and in any event not  exceeding  three  business  days, a new
warrant in  substantially  identical  form for the  purchase  of that  number of
Shares  equal to the  difference  between  the number of Shares  subject to this
Warrant  and the  number of Shares as to which  this  Warrant  is so  exercised.
Notwithstanding  anything in this  Warrant to the  contrary,  the  Warrantholder
hereby  acknowledges  and agrees that its exercise of this Warrant for Shares is
subject to the condition  that the  Warrantholder  will have first  received any
applicable Regulatory Approvals.

         4. Issuance of Shares;  Authorization.  Certificates  for Shares issued
upon  exercise  of this  Warrant  will be  issued  in such  name or names as the
Warrantholder  may  designate  and will be  delivered  to such  named  Person or
Persons  within a reasonable  time,  not to exceed three business days after the
date on which this Warrant has been duly exercised in accordance  with the terms
of this  Warrant.  The Company  hereby  represents  and warrants that any Shares
issued upon the exercise of this Warrant in  accordance  with the  provisions of
Section  3 will be duly  and  validly  authorized  and  issued,  fully  paid and
nonassessable  and free from all taxes,  liens and charges  (other than liens or
charges  created by the  Warrantholder,  income and franchise  taxes incurred in
connection  with the exercise of the Warrant or taxes in respect of any transfer
occurring  contemporaneously  therewith).  The Company agrees that the Shares so
issued will be deemed to have been issued to the  Warrantholder  as of the close
of business on the date on which this Warrant and payment of the Exercise  Price
are  delivered  to the  Company in  accordance  with the terms of this  Warrant,
notwithstanding  that the stock transfer books of the Company may then be closed
or certificates  representing such Shares may not be actually  delivered on such
date.  The  Company  will at all times  reserve and keep  available,  out of its
authorized but unissued preferred stock, solely for the purpose of providing for
the exercise of this Warrant,  the aggregate number of shares of Preferred Stock
then issuable  upon  exercise of this Warrant at any time.  The Company will use
reasonable  best  efforts  to  ensure  that the  Shares  may be  issued  without
violation of any  applicable  law or  regulation  or of any  requirement  of any
securities exchange on which the Shares are listed or traded.



                                       3
<PAGE>

         5. No Rights as  Stockholders;  Transfer  Books.  This Warrant does not
entitle the  Warrantholder to any voting rights or other rights as a stockholder
of the Company prior to the date of exercise hereof. The Company will at no time
close its transfer  books  against  transfer of this Warrant in any manner which
interferes with the timely exercise of this Warrant.

         6. Charges, Taxes and Expenses.  Issuance of certificates for Shares to
the Warrantholder upon the exercise of this Warrant shall be made without charge
to the Warrantholder  for any issue or transfer tax or other incidental  expense
in respect of the issuance of such certificates, all of which taxes and expenses
shall be paid by the Company.

         7. Transfer/Assignment.

         (A)  Subject to  compliance  with  clause  (B) of this  Section 7, this
Warrant and all rights hereunder are transferable, in whole or in part, upon the
books of the  Company  by the  registered  holder  hereof  in  person or by duly
authorized  attorney,  and a new  warrant  shall  be made and  delivered  by the
Company,  of the same tenor and date as this Warrant but  registered in the name
of one or more transferees,  upon surrender of this Warrant,  duly endorsed,  to
the office or agency of the Company  described in Section 3. All expenses (other
than stock  transfer  taxes) and other charges  payable in  connection  with the
preparation, execution and delivery of the new warrants pursuant to this Section
7 shall be paid by the Company.

         (B) The transfer of the Warrant and the Shares  issued upon exercise of
the  Warrant  are  subject to the  restrictions  set forth in Section 4.4 of the
Purchase  Agreement.  If and for so long as required by the Purchase  Agreement,
this  Warrant  shall  contain the legends as set forth in Section  4.2(a) of the
Purchase Agreement.

         8. Exchange and Registry of Warrant. This Warrant is exchangeable, upon
the surrender hereof by the  Warrantholder to the Company,  for a new warrant or
warrants of like tenor and representing the right to purchase the same aggregate
number of Shares.  The Company  shall  maintain a registry  showing the name and
address of the  Warrantholder  as the  registered  holder of this Warrant.  This
Warrant may be  surrendered  for  exchange or  exercise in  accordance  with its
terms,  at the office of the Company,  and the Company shall be entitled to rely
in all respects, prior to written notice to the contrary, upon such registry.

         9. Loss, Theft,  Destruction or Mutilation of Warrant.  Upon receipt by
the  Company  of  evidence  reasonably  satisfactory  to it of the loss,  theft,
destruction  or mutilation  of this  Warrant,  and in the case of any such loss,
theft or destruction,  upon receipt of a bond,  indemnity or security reasonably
satisfactory  to the  Company,  or,  in the  case of any such  mutilation,  upon
surrender and cancellation of this Warrant,  the Company shall make and deliver,
in lieu of such lost,  stolen,  destroyed or mutilated Warrant, a new Warrant of
like tenor and  representing  the right to purchase the same aggregate number of
Shares as provided for in such lost, stolen, destroyed or mutilated Warrant.

         10. Saturdays, Sundays, Holidays, etc. If the last or appointed day for
the  taking of any action or the  expiration  of any right  required  or granted
herein shall not be a business  day, then such action may be taken or such right
may be exercised on the next succeeding day that is a business day.



                                       4
<PAGE>

         11. Rule 144  Information.  The Company  covenants that it will use its
reasonable best efforts to timely file all reports and other documents  required
to be filed by it under the  Securities  Act and the  Exchange Act and the rules
and  regulations  promulgated by the SEC  thereunder  (or, if the Company is not
required to file such reports,  it will, upon the request of any  Warrantholder,
make publicly  available such  information as necessary to permit sales pursuant
to Rule 144 under the Securities  Act), and it will use reasonable  best efforts
to take such further action as any Warrantholder may reasonably request, in each
case to the  extent  required  from time to time to enable  such  holder  to, if
permitted  by the terms of this Warrant and the  Purchase  Agreement,  sell this
Warrant without  registration  under the Securities Act within the limitation of
the exemptions  provided by (A) Rule 144 under the Securities  Act, as such rule
may be  amended  from  time to time,  or (B) any  successor  rule or  regulation
hereafter adopted by the SEC. Upon the written request of any Warrantholder, the
Company  will  deliver to such  Warrantholder  a written  statement  that it has
complied with such requirements.

         12.  Adjustments  and  Other  Rights.  For  so  long  as  the  Original
Warrantholder  holds this  Warrant or any portion  thereof,  if any event occurs
that, in the good faith judgment of the Board of Directors of the Company, would
require  adjustment  of the  Exercise  Price or number of Shares into which this
Warrant is exercisable  in order to fairly and  adequately  protect the purchase
rights of the Warrants in accordance with the essential intent and principles of
the Purchase Agreement and this Warrant,  then the Board of Directors shall make
such adjustments in the application of such provisions,  in accordance with such
essential intent and principles,  as shall be reasonably necessary,  in the good
faith  opinion of the Board of  Directors,  to protect such  purchase  rights as
aforesaid.

         Whenever  the  Exercise  Price or the number of Shares  into which this
Warrant is  exercisable  shall be adjusted  as provided in this  Section 12, the
Company shall forthwith file at the principal  office of the Company a statement
showing  in  reasonable  detail  the facts  requiring  such  adjustment  and the
Exercise  Price that shall be in effect and the number of Shares into which this
Warrant shall be exercisable  after such adjustment,  and the Company shall also
cause a copy of such statement to be sent by mail,  first class postage prepaid,
to each Warrantholder at the address appearing in the Company's records.

         13. No Impairment. The Company will not, by amendment of its Charter or
through  any  reorganization,   transfer  of  assets,   consolidation,   merger,
dissolution, issue or sale of securities or any other voluntary action, avoid or
seek to avoid the  observance or  performance of any of the terms to be observed
or  performed  hereunder  by the  Company,  but will at all times in good  faith
assist in the carrying out of all the  provisions  of this Warrant and in taking
of all such action as may be  necessary or  appropriate  in order to protect the
rights of the Warrantholder.

         14.  Governing  Law.  This Warrant will be governed by and construed in
accordance  with the federal law of the United  States if and to the extent such
law is applicable, and otherwise in accordance with the laws of the State of New
York  applicable  to  contracts  made and to be performed  entirely  within such
State.  Each of the  Company and the  Warrantholder  agrees (a) to submit to the
exclusive  jurisdiction  and venue of the United States  District  Court for the
District of Columbia for any civil action,  suit or proceeding arising out of or
relating to this Warrant or the transactions  contemplated  hereby, and (b) that
notice may be served  upon the  Company  at the  address in Section 17 below and


                                       5
<PAGE>

upon the  Warrantholder  at the address for the  Warrantholder  set forth in the
registry  maintained by the Company pursuant to Section 8 hereof.  To the extent
permitted by applicable  law, each of the Company and the  Warrantholder  hereby
unconditionally  waives  trial by jury in any civil legal  action or  proceeding
relating to the Warrant or the transactions contemplated hereby or thereby.

         15. Binding  Effect.  This Warrant shall be binding upon any successors
or assigns of the Company.

         16.  Amendments.  This Warrant may be amended and the observance of any
term of this Warrant may be waived only with the written  consent of the Company
and the Warrantholder.

         17. Notices. Any notice,  request,  instruction or other document to be
given  hereunder by any party to the other will be in writing and will be deemed
to have been duly given (a) on the date of delivery if delivered personally,  or
by facsimile,  upon  confirmation of receipt,  or (b) on the second business day
following  the date of dispatch if delivered  by a  recognized  next day courier
service.  All notices  hereunder  shall be  delivered  as set forth in Item 9 of
Schedule A hereto,  or pursuant to such other  instructions as may be designated
in writing by the party to receive such notice.

         18. Entire  Agreement.  This  Warrant,  the forms  attached  hereto and
Schedule A hereto (the terms of which are incorporated by reference herein), and
the Letter Agreement (including all documents incorporated therein), contain the
entire  agreement  between the parties with respect to the subject matter hereof
and supersede all prior and  contemporaneous  arrangements or undertakings  with
respect thereto.

                  [Remainder of page intentionally left blank]




                                       6
<PAGE>

                          [Form of Notice of Exercise]


                                 Date: _________

TO:      GrandSouth Bancorporation

RE:      Election to Purchase Preferred Stock

         The  undersigned,  pursuant to the provisions set forth in the attached
Warrant,  hereby  agrees to subscribe  for and purchase such number of shares of
Preferred  Stock  covered by the  Warrant  such that after  giving  effect to an
exercise  pursuant to Section 3(B) of the Warrant,  the undersigned will receive
the net number of shares of Preferred Stock set forth below. The undersigned, in
accordance  with Section 3 of the Warrant,  hereby  agrees to pay the  aggregate
Exercise  Price for such  shares of  Preferred  Stock in the manner set forth in
Section 3(B) of the Warrant.

Number of Shares of Preferred Stock:(1)
                                            ------------------------------------


         The  undersigned  agrees that it is exercising the attached  Warrant in
full and  that,  upon  receipt  by the  undersigned  of the  number of shares of
Preferred  Stock set forth above,  such Warrant  shall be deemed to be cancelled
and surrendered to the Company.


                                  Holder:
                                           -----------------------------------
                                  By:
                                           -----------------------------------
                                  Name:
                                           -----------------------------------
                                  Title:
                                           -----------------------------------




--------------------------
1.   Number of shares to be received  by the  undersigned  upon  exercise of the
     attached Warrant pursuant to Section 3(B) thereof.




                                       7
<PAGE>


         IN WITNESS  WHEREOF,  the Company  has caused  this  Warrant to be duly
executed by a duly authorized officer.

Dated:  January 9, 2009

                              COMPANY:  Grand South Bancorporation


                              By:
                                       -----------------------------------
                                       Name:  Ronald K. Earnest
                                       Title:    President


              Attest:


                              By:
                                       -----------------------------------------
                                       Name: J. B. Garrett
                                       Title:   Secretary



                           [Signature Page to Warrant]




                                       8
<PAGE>



                                                                      SCHEDULE A


Item 1
Name:  GrandSouth Bancorporation
Corporate or other organizational form:  Corporation
Jurisdiction of organization:  South Carolina

Item 2
Exercise Price:  $0.01 per share.

Item 3
Issue Date:  January 9, 2009

Item 4
Liquidation Amount:  $1,000.00 per share

Item 5
Series of Perpetual Preferred Stock:  Series W.

Item 6 Date of Letter  Agreement  between  the  Company  and the  United  States
Department of the Treasury: January 9, 2009

Item 7
Number of shares of Preferred Stock:  450.00450 shares.

Item 8
Company's address:  381 Halton Road, Greenville, SC 29607.

Item 9
Notice information:  GrandSouth Bancorporation
                           381 Halton Road
                           Greenville, SC 29607
                           Attn:  President

                           Facsimile:  (864) 770-1081




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