CAROLINA FIRST CORP, 424B1, 1995-02-17

CAROLINA FIRST CORP
424B1, 1995-02-17
STATE COMMERCIAL BANKS

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Rule 424(b)(1)
File Number: 33-57389

AIKEN COUNTY NATIONAL BANK
AIKEN, SOUTH CAROLINA

February 13, 1995

Dear Shareholder:

You are cordially invited to attend the Special Meeting of Shareholders (the
"Special Meeting") of Aiken County National Bank ("ACNB") to be held at the
offices of ACNB located at 142 Chesterfield Street, S.E. in Aiken, South
Carolina 29801, on March 20, 1995 at 10:30 a.m., local time.

At the Special Meeting you will be asked to consider and vote upon the
Agreement and Plan of Reorganization (the "Merger Agreement"), dated October 13,
1994, among Carolina First Corporation, Carolina First Bank and ACNB, which
Merger Agreement is described in the accompanying Proxy Statement/Prospectus.
If the Merger Agreement is approved by holders of two-thirds of the outstanding
stock of ACNB, ACNB will be merged with and into Carolina First Bank (the
"Merger"). Upon the effective date of the Merger (the "Effective Date"), ACNB
shareholders will become entitled to receive 1.125 shares of Carolina First
Corporation common stock for each share of ACNB common stock owned by them. As
a result of the Merger, the ACNB common stock will be cancelled and Carolina
First Bank will be the surviving corporation. The current ACNB offices will
continue in operation as branch offices of Carolina First Bank.

Enclosed herewith are the Notice of Special Meeting of Shareholders, a
Proxy Statement/Prospectus and a Proxy for use in connection with the Special
Meeting. The Proxy Statement/Prospectus includes a description of the terms and
conditions of the Merger and related agreements, financial and other information
about Carolina First Corporation, Carolina First Bank and ACNB, and other
information. You are urged to consider carefully the entire Proxy
Statement/Prospectus, including the appendices thereto.

THE BOARD OF DIRECTORS OF ACNB BELIEVES THAT THE MERGER IS IN THE BEST
INTERESTS OF ACNB AND ITS SHAREHOLDERS AND RECOMMENDS A VOTE FOR THE APPROVAL OF
THE MERGER AGREEMENT.

Because the affirmative vote of holders of at least two-thirds of the
issued and outstanding shares of ACNB common stock is required to approve the
Merger, it is important that your shares of ACNB common stock be represented at
the Special Meeting, whether or not you are personally able to attend. You are
therefore urged to complete, date and sign the enclosed Proxy, and return it
promptly in the enclosed return envelope, which does not require any postage if
mailed in the United States. If you attend the Special Meeting, you may vote
your shares in person, even if you have already returned your Proxy.

Sincerely,

Michael L. Laughlin
Chairman of the Board of Directors

<PAGE>

AIKEN COUNTY NATIONAL BANK

142 CHESTERFIELD STREET, S.E.

AIKEN, SOUTH CAROLINA 29801

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON MARCH 20, 1995

TO THE SHAREHOLDERS OF AIKEN COUNTY NATIONAL BANK:

NOTICE IS HEREBY GIVEN that the Special Meeting of Shareholders (the
"Special Meeting") of Aiken County National Bank ("ACNB") will be held at the
offices of ACNB located at 142 Chesterfield Street, S.E. in Aiken, South
Carolina 29801, on March 20, 1995 at 10:30 a.m., local time, for the following
purposes:

1. CONSIDERATION OF THE MERGER. To consider and vote upon a proposal to
approve the Reorganization Agreement dated October 13, 1994, providing for the
merger of ACNB with and into Carolina First Bank, a wholly-owned subsidiary of
Carolina First Corporation, and, in connection therewith, the conversion of each
share of ACNB common stock into the right to receive 1.125 shares of common
stock of Carolina First Corporation.

2. OTHER BUSINESS. To transact such other business as may properly come
before the Special Meeting or any adjournment thereof.

Only shareholders of record at the close of business on January 31, 1995,
are entitled to notice of and to vote at the Special Meeting or any adjournment
thereof. All shareholders, whether or not they expect to attend the Special
Meeting in person, are requested to complete, date, sign and return the enclosed
Proxy in the accompanying envelope. The Proxy may be revoked by written notice
to the Secretary of ACNB at any time before it is voted, by submitting a proxy
having a later date, by such person appearing at the Special Meeting and giving
notice of revocation to the corporate officers responsible for maintaining the
list of shareholders, or by giving notice of such revocation in the open meeting
of the shareholders.

By Order of the Board of Directors

Michael L. Laughlin,
Chairman

Dated: February 13, 1995

<PAGE>

PROXY STATEMENT/PROSPECTUS

CAROLINA FIRST CORPORATION
PROSPECTUS
452,813 SHARES
COMMON STOCK $1 PAR VALUE

AIKEN COUNTY NATIONAL BANK
PROXY STATEMENT FOR
SPECIAL MEETING OF SHAREHOLDERS

This Proxy Statement/Prospectus relates to the issuance by Carolina First
Corporation of up to 452,813 shares (the "CFC Shares") of its common stock in
connection with the proposed merger (the "Merger") of Aiken County National Bank
("ACNB") with and into Carolina First Bank, a wholly-owned subsidiary of
Carolina First Corporation. The CFC Shares are offered to the ACNB shareholders
as contemplated in the Reorganization Agreement, dated as of October 13, 1994,
(the "Merger Agreement") and entered into among Carolina First Corporation,
Carolina First Bank and ACNB. The Merger Agreement provides that in connection
with the Merger, each outstanding share of ACNB common stock will automatically
be converted into 1.125 shares of Carolina First Corporation common stock, par
value $1 per share ("CFC common stock"). Cash will be paid in lieu of
fractional shares.

This Proxy Statement/Prospectus also serves as the Proxy Statement of ACNB
in connection with the solicitation of proxies to be used at the Special Meeting
of Shareholders of ACNB (the "Special Meeting") to be held on March 20, 1995 for
the purposes described herein. This Proxy Statement/Prospectus is first being
sent to ACNB shareholders on or about February 13, 1995.

The Merger is subject to certain conditions, including, among others,
approval by the shareholders of ACNB at the Special Meeting described herein and
approval by applicable regulatory authorities. Conditions to the transactions
not required by state or federal law may be waived by the respective parties.
Any shareholder of ACNB who, at or prior to the Special Meeting, gives written
notice that he dissents from the Merger or who votes against the Merger shall be
entitled, upon strict compliance with certain statutory procedures, to receive
the value of the ACNB common stock owned by such shareholder at the time and in
the manner set forth herein. See "THE PROPOSED TRANSACTION -- Rights of
Dissenting Shareholders of ACNB." It is a condition to consummation of the
Merger, however, that dissenters' rights not have been perfected with respect to
more than 10% of the outstanding shares of ACNB common stock.

THE ACNB BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE
TO APPROVE THE MERGER. FAILURE TO VOTE IS EQUIVALENT TO VOTING AGAINST THE
MERGER.

The CFC common stock is traded on the Nasdaq National Market under the
NASDAQ market symbol "CAFC." On February 6, 1995, the closing bid price of the
CFC common stock, as reported by NASDAQ, was $14.00 per share. There is no
established public trading market for ACNB's common stock.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSEDUPON THE ACCURACYOR ADEQUACY
OF THISPROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

THE CFC SHARES OFFERED HEREBY ARE NOT SAVINGS ACCOUNTS, DEPOSITS OR OTHER
OBLIGATIONS OF A BANK OR SAVINGS ASSOCIATION AND ARE NOT INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.

The date of this Proxy Statement/Prospectus is February 13, 1995.

<PAGE>

TABLE OF CONTENTS
<TABLE>
<CAPTION>

<S> <C>
AVAILABLE INFORMATION.............................................. 4

INCORPORATION OF CERTAIN INFORMATION BY REFERENCE.................. 4

OTHER INFORMATION.................................................. 5

SUMMARY............................................................ 6
Introduction................................................ 6
Time, Place and Purpose of the Special
Meeting................................................... 6
Parties to the Merger....................................... 6
Terms of the Proposed Transaction........................... 6
Vote Required and Record Date............................... 7
Recommendation of Board of Directors........................ 7
Rights of Dissenting Shareholders........................... 7
Certain Differences in Shareholder's
Rights.................................................... 7
Conditions and Regulatory Approvals......................... 7
Termination of the Merger................................... 8
Effective Date of the Merger................................ 8
Opinion of Financial Adviser................................ 8
Special Considerations...................................... 8
Certain Income Tax Consequences............................. 8
Restrictions on Resales by Affiliates....................... 8
Accounting Treatment........................................ 9
Market Prices and Dividends................................. 9

Selected Consolidated Financial Data........................ 10
Comparative Per Share Data.................................. 13
Recent Financial Developments............................... 14

INFORMATION CONCERNING THE SPECIAL MEETING......................... 15
Purpose of the Special Meeting.............................. 15
Record Date and Voting Rights............................... 15
Proxies..................................................... 16
Recommendation.............................................. 16

THE PROPOSED TRANSACTION........................................... 17
General Description of the Terms of the
Merger.................................................... 17
Background of and Reasons for the Merger.................... 17
Opinion of Financial Advisor................................ 20
Exchange of ACNB Stock Certificates......................... 25
Conditions to Consummation of the Merger.................... 26
Termination................................................. 27
Amendment................................................... 27
Conduct of ACNB's and Carolina First
Corporation's Business Prior to the Effective Date ....... 27
Required Regulatory Approvals............................... 28
Operations After the Merger................................. 29
Accounting Treatment........................................ 29
Certain Federal Income Tax Consequences..................... 30
Restrictions on Resales by Affiliates....................... 31
Rights of Dissenting Shareholders of ACNB................... 32
Recommendation of Board of Directors........................ 32

PRO FORMA COMBINED FINANCIAL INFORMATION........................... 33

INFORMATION ABOUT CAROLINA FIRST CORPORATION....................... 38
In General.................................................. 38
Recent Developments......................................... 39
Market Prices of and Dividends Paid on CFC
Common Stock.............................................. 41
Special Considerations...................................... 41
Incorporation of Certain Information By
Reference................................................. 42
Certain Regulatory Matters.................................. 43

<PAGE>

INFORMATION ABOUT ACNB............................................. 52
General..................................................... 52
Competition................................................. 52
Consent Agreement with the OCC.............................. 53
Dividends................................................... 55
Market Price of ACNB Common Stock and
Related ACNB Stockholder Matters.......................... 55
Recent Developments......................................... 55
Management's Discussion and Analysis of
Financial Condition and Results of Operations............. 56
Results of Operations....................................... 57
Net Interest Income......................................... 59
Liquidity and Interest Rate Sensitivity..................... 60
Provision for Loan Losses................................... 62
Investment Securities Portfolio............................. 62
Loan Portfolio.............................................. 64
Nonperforming Loans; Other Problem Assets................... 65
Potential Problem Loans..................................... 66
Other Real Estate........................................... 66
Allowance for Loan Losses................................... 67
Deposits.................................................... 68
Return on Equity and Assets................................. 69
Liquidity................................................... 69
Capital Adequacy and Resources.............................. 69
Inflation................................................... 70
Properties.................................................. 70
Supervision and Regulation of ACNB.......................... 70

MANAGEMENT INFORMATION............................................. 73
Management and Principal Shareholders of
Carolina First Corporation................................ 73
Business Experience of Carolina First
Corporation Directors..................................... 74
Business Experience of Carolina First
Corporation Executive Officers............................ 74
Other Information Regarding Carolina First
Corporation............................................... 75
Management and Principal Shareholders of
ACNB...................................................... 76
Interests of Certain Persons in the
Merger.................................................... 76

COMPARATIVE RIGHTS OF SHAREHOLDERS................................. 77
Comparison of CFC Common Stock and ACNB
Common Stock.............................................. 77

CAROLINA FIRST CORPORATION CAPITAL STOCK........................... 80
Common Stock................................................ 80
Preferred Stock............................................. 80
Stockholders' Rights Agreement.............................. 80
Management Contracts........................................ 82
Board of Directors.......................................... 82
Voting...................................................... 83
Control Share Acquisition / Business
Combination Statutes...................................... 83
Transfer Agent.............................................. 84
Dividend Reinvestment Plans................................. 84
Terms of the Preferred Stock................................ 84

LEGAL MATTERS...................................................... 85

EXPERTS............................................................ 86

OTHER MATTERS...................................................... 86

APPENDICES
Merger Agreement................................................ APPENDIX A
12 U.S.C. (Section Mark) 214a(b)................................ APPENDIX B
Opinion of The Carson-Medlin Company............................ APPENDIX C

Financial Statements of the Parties to the Merger............... APPENDIX D

</TABLE>

<PAGE>

AVAILABLE INFORMATION

Carolina First Corporation is subject to the informational requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange Act") and, in
accordance therewith, files reports, proxy statements and other information
with the Securities and Exchange Commission (the "Commission"). Such reports,
proxy statements and information statements filed by Carolina
First Corporation with the Commission may be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the following Regional Offices of the
Commission: New York Regional Office, 75 Park Place, 14th Floor, New York, New
York 10007; and Chicago Regional Office, Northwestern Atrium Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60606. Copies of such material
may also be obtained from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates.

Carolina First Corporation has filed with the Commission a Registration
Statement under the Securities Act of 1933, as amended (the "Securities Act"),
with respect to the CFC Shares offered hereby. This Proxy Statement/Prospectus
does not contain all the information set forth in the Registration Statement and
the exhibits and schedules thereto. For further information with respect to
Carolina First Corporation, ACNB and the CFC Shares offered hereby, reference is
hereby made to the Registration Statement, including the exhibits and schedules
thereto. The Registration Statement can be inspected and copied at the public
reference facilities of the Commission, 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549, and copies of such materials can be obtained by mail
from the Public Reference Section of the Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. In addition, microfiche of the
Registration Statement and exhibits thereto are available for inspection and
reproduction at the public reference facilities of the Commission at its New
York Regional Office, 75 Park Place, 14th Floor, New York, New York 10007, and
at its Chicago Regional Office, Northwestern Atrium Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60606.

Carolina First Corporation furnishes its shareholders with annual reports
containing audited financial information.

INCORPORATION OF CERTAIN INFORMATION BY REFERENCE

This Proxy Statement/Prospectus incorporates documents by reference which
are not presented herein or delivered herewith. Copies of any such documents
(other than exhibits to such a document unless such exhibit is specifically
incorporated by reference into such documents) are available without charge to
any person, including any ACNB shareholder, to whom this Proxy
Statement/Prospectus is delivered upon oral or written request to William S.
Hummers III, Executive Vice President, Carolina First Corporation, 102 South
Main Street, Greenville, SC 29601, telephone number 803-255-7900. In order to
ensure timely delivery of the documents, any request should be made by March 6,
1995.

Carolina First Corporation's Annual Report on Form 10-K for the fiscal year
ended December 31, 1993, Carolina First Corporation's Quarterly Reports on Form
10-Q for the fiscal quarters ended March 31, 1994, June 30, 1994 and September
30, 1994, and Carolina First Corporation's Current Reports on Form 8-K dated May
2, 1994, November 22, 1994 and January 24, 1995, in each case filed with the
Commission pursuant to Section 13 of the Exchange Act; the description of the
CFC common stock which is contained in its registration statements filed under
Section 12 of the Exchange Act,

<PAGE>

including any amendment or report filed for the purpose of updating such
description; and all other reports filed pursuant to Section 13(a) or 15(d) of
the Exchange Act since the end of the fiscal year ended December 31, 1993, from
the date of filing of such document, shall be deemed to be incorporated by
reference into this Proxy Statement/Prospectus.

All documents filed by Carolina First Corporation pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date hereof and prior to
the Special Meeting shall be deemed to be incorporated by reference in this
Proxy Statement/Prospectus and to be a part hereof from the respective dates of
filing of such documents. Any statement contained herein or in a document
incorporated herein shall be deemed to be modified or superseded for purposes of
this Proxy Statement/Prospectus to the extent that a statement contained herein
or in any other subsequently-filed document which also is incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Proxy Statement/Prospectus.

OTHER INFORMATION

This Proxy Statement/Prospectus does not cover any resales of the CFC common
stock offered hereby to be received by the stockholders deemed to be
"affiliates" of Carolina First Corporation or ACNB upon consummation of the
Merger. No person is authorized to make use of this Proxy Statement/Prospectus
in connection with such resales, although securities received by those
stockholders of Carolina First Corporation not deemed to be "affiliates" of
Carolina First Corporation or ACNB may be traded without the use of this Proxy
Statement/Prospectus.

NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED HEREIN AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS DOCUMENT DOES NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANY
ONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR
IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO
OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
NEITHER THE DELIVERY OF THIS DOCUMENT NOR ANY DISTRIBUTION OF SECURITIES MADE
HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF CAROLINA FIRST CORPORATION OR ACNB SINCE THE
DATE HEREOF OR THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT
TO THE DATE HEREOF.

<PAGE>

SUMMARY

THE FOLLOWING IS A SUMMARY OF CERTAIN INFORMATION CONTAINED ELSEWHERE IN
THIS PROXY STATEMENT/PROSPECTUS. THIS SUMMARY IS NOT INTENDED TO BE A COMPLETE
STATEMENT AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO MORE DETAILED
INFORMATION CONTAINED ELSEWHERE IN THIS PROXY STATEMENT/PROSPECTUS, THE
ACCOMPANYING APPENDICES, AND THE DOCUMENTS INCORPORATED HEREIN BY REFERENCE.

INTRODUCTION. This Proxy Statement/Prospectus is furnished in connection
with the issuance by Carolina First Corporation of the CFC Shares and the
solicitation of proxies by the Board of Directors of ACNB with respect to the
Special Meeting to be held on March 20, 1995 and at any adjournment(s) thereof,
for the purpose of considering and voting upon the Merger of ACNB with and into
Carolina First Bank. This Proxy Statement/Prospectus is first being mailed to
shareholders of ACNB on or about February 13, 1995.

TIME, PLACE AND PURPOSE OF THE SPECIAL MEETING. The Special Meeting will
be held on March 20, 1995 at 10:30 a.m. at ACNB's main office, 142 Chesterfield
Street, S.E., Aiken, South Carolina. At the Special Meeting, shareholders of
ACNB will consider and vote on the proposal to approve the Merger Agreement,
which provides for the Merger of ACNB into Carolina First Bank and the
conversion of ACNB common stock into CFC common stock. See "INFORMATION
CONCERNING THE SPECIAL MEETING."

PARTIES TO THE MERGER. CAROLINA FIRST CORPORATION. Carolina First
Corporation is a bank holding company headquartered in Greenville, South
Carolina which engages in a general banking business through its two
subsidiaries: Carolina First Bank and Carolina First Mortgage Company, which is
a mortgage loan origination and servicing company headquartered in Columbia,
South Carolina. Carolina First Corporation is a South Carolina corporation
which was organized in 1986. At September 30, 1994, it had total assets of
approximately $1.07 billion, total loans of approximately $816 million and total
deposits of approximately $940 million. Its principal executive offices are
located are 102 South Main Street, Greenville, South Carolina 29601, and its
telephone number is (803) 255-7900. See "INFORMATION ABOUT CAROLINA FIRST
CORPORATION."

ACNB. ACNB is a national bank, the deposit accounts of which are insured
by the Bank Insurance Fund of the Federal Deposit Insurance Corporation (the
"FDIC"). ACNB's principal office is located at 142 Chesterfield Street, S.E.,
Aiken, South Carolina 29801, and its telephone number is (803) 649-9991. As of
September 30, 1994, ACNB had total assets of approximately $43 million, total
loans of approximately $31 million, and total deposits of approximately $39
million and operated through two branches. See "INFORMATION ABOUT ACNB."

CAROLINA FIRST BANK. Carolina First Bank is a South Carolina-chartered
bank which is a wholly-owned subsidiary of Carolina First Corporation. It
engages in a general banking business through 44 locations, which are located
throughout South Carolina. It began its operations in December 1986 and at
September 30, 1994, had total assets of approximately $805 million, total loans
of approximately $609 million, total deposits of approximately $717 million and
operated through 30 branches. On February 3, 1995, Carolina First Savings Bank,
F.S.B., a wholly-owned savings bank subsidiary of Carolina First Corporation,
was merged into Carolina First Bank, adding assets of approximately $264 million
and 13 branch locations. The deposits of Carolina First Bank are insured by the
FDIC. See "INFORMATION ABOUT CAROLINA FIRST CORPORATION." The Merger will be
effected through the merger of ACNB with and into Carolina First Bank.

TERMS OF THE PROPOSED TRANSACTION. Pursuant to the terms of the Merger
Agreement, upon consummation of the Merger, each outstanding share of ACNB's
common stock will be converted into 1.125 shares of CFC common stock, and
current shareholders of ACNB will no longer have any rights

<PAGE>

in ACNB's common stock. Cash will be paid in lieu of issuance of fractional
shares. See "THE PROPOSED TRANSACTION -- General Description of the Terms of
the Merger."

VOTE REQUIRED AND RECORD DATE. Only ACNB shareholders of record at the
close of business on January 31, 1995 (the "Record Date") will be entitled to
notice of and to vote at the Special Meeting. The Merger must be approved by the
affirmative vote of the holders of at least two-thirds of the outstanding shares
of ACNB's common stock eligible to vote at the Special Meeting. As of the
Record Date, there were 402,500 shares of ACNB's common stock entitled to vote.
As of the date hereof, the directors and executive officers of ACNB and their
affiliates beneficially owned 86,688 shares, or approximately 21.5%, of ACNB's
common stock, all of which are expected to be voted in favor of the Merger.
Upon consummation of the transactions contemplated hereby, such persons will
beneficially own 97,524 shares of CFC common stock, or approximately 2.0% of the
outstanding CFC common stock.

No shareholder vote is required on behalf of Carolina First Corporation.
Carolina First Corporation will vote all shares of Carolina First Bank in favor
of the Merger. See "THE PROPOSED TRANSACTION."

RECOMMENDATION OF BOARD OF DIRECTORS. The Board of Directors of ACNB has
approved the Merger Agreement and believes that the Merger is in the best
interests of ACNB and its shareholders. IT UNANIMOUSLY RECOMMENDS THAT ACNB'S
SHAREHOLDERS VOTE FOR THE MERGER. See "THE PROPOSED TRANSACTION --
Recommendation of Board of Directors."

RIGHTS OF DISSENTING SHAREHOLDERS. Shareholders of ACNB who give written
notice at or prior to the Special Meeting that they dissent to the proposed
Merger, or who vote against the proposed Merger will be entitled to obtain
payment of the value of their shares of ACNB common stock under federal law.
Failure to comply strictly with certain statutory procedures may result in the
forfeiture of such rights. It is a condition to consummation of the Merger that
dissenters' rights not have been perfected with respect to more than 10% of
ACNB's outstanding shares of common stock. See "THE PROPOSED TRANSACTION --
Rights of Dissenting Shareholders of ACNB."

CERTAIN DIFFERENCES IN SHAREHOLDER'S RIGHTS. Upon effectiveness of the
Merger, the outstanding shares of ACNB common stock will be converted into
shares of CFC common stock. Accordingly, the ACNB shareholders will become
shareholders of Carolina First Corporation, and their rights as shareholders
will be determined by South Carolina corporations law and by Carolina First
Corporation's Articles of Incorporation and Bylaws. The rights of shareholders
of Carolina First Corporation will differ from the rights of shareholders of
ACNB in several important respects, including the right to remove directors,
required shareholder votes on certain matters, classification of directors,
nominations of directors, preemptive rights, cumulative voting, and statutory
and other restrictions on certain business combinations and control share
acquisitions. See "COMPARATIVE RIGHTS OF SHAREHOLDERS."

CONDITIONS AND REGULATORY APPROVALS. Consummation of the transactions
contemplated by the Merger Agreement is subject to various conditions, including
receipt of the approval by the FDIC, the South Carolina State Board of Financial
Institutions (the "State Board"), and the shareholders of ACNB. Applications to
the FDIC and the State Board seeking approval of the proposed transaction have
been filed and are now pending. Consummation of the Merger is also conditioned
upon, among other things, a determination by Carolinal First Corporation that
the Merger will qualify for pooling-of-interests accounting treatment and
dissenters' rights not being exercised by the holders of more than 10% of the
outstanding shares of ACNB common stock. Carolina First Corporation and ACNB
may waive certain of the conditionsto their respective obligations to
consummate the Merger, other than conditions required by law. See "THE
PROPOSED TRANSACTION -- Conditions to Consummation of the Merger, and --
Required Regulatory Approvals."

<PAGE>

TERMINATION OF THE MERGER. The Merger Agreement may be terminated at any
time prior to the closing date (i) by mutual consent of Carolina First
Corporation, ACNB and Carolina First Bank; (ii) by either Carolina First
Corporation or ACNB if any order preventing consummation of the Merger is
entered by any state or federal governmental or regulatory body; (iii) by either
Carolina First Corporation or ACNB if the other party has failed to comply with
the agreements or fulfill the conditions of the Merger Agreement in a way that
is material to the consolidated businesses of the breaching party and has not
cured the failure to comply within a reasonable period of time after being given
notice thereof; (iv) by either Carolina First Corporation or ACNB if the closing
has not occurred by April 30, 1995; or (v) by ACNB if the average of the closing
sales price of CFC common stock for any period of ten consecutive trading days
from October 13, 1994 through the day before the closing date is less than
$12.00 per share. The Merger Agreement may be amended by mutual written consent
of all the parties.

EFFECTIVE DATE OF THE MERGER. The Effective Date of the Merger will be the
time and date specified in the Articles of Merger that are delivered for filing
to the Secretary of State of South Carolina. The Effective Date will occur as
soon as practicable following the date that all conditions specified in the
Merger Agreement have been satisfied or waived. The Effective Date currently is
anticipated to be in the first quarter of 1995, although delays in the
satisfaction of the conditions to consummation of the Merger could result in a
later Effective Date. See "THE PROPOSED TRANSACTION -- Conditions to
Consummation of the Merger."

OPINION OF FINANCIAL ADVISER. The Carson Medlin Company ("Carson Medlin")
has served as financial adviser to ACNB in connection with the Merger and has
rendered an opinion to the ACNB Board of Directors that the exchange ratio of
CFC common stock for ACNB common stock is fair from a financial point of view to
the ACNB stockholders. For additional information concerning Carson-Medlin and
its opinion, see "THE PROPOSED TRANSACTION -- Opinion of Financial Adviser" and
the opinion of Carson-Medlin attached as Appendix C to this Proxy
Statement/Prospectus.

SPECIAL CONSIDERATIONS. In considering whether or not to vote for the
Merger, ACNB shareholders should consider certain factors applicable to Carolina
First Corporation, including its dependence on senior management, its growth
through acquisitions, and its anti-takeover measures which are in place. For
further information regarding these factors, see "INFORMATION ABOUT CAROLINA
FIRST CORPORATION -- Special Considerations."

CERTAIN INCOME TAX CONSEQUENCES. ACNB has received an opinion of counsel
stating that the Merger will constitute a tax-free reorganization within the
meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the
"Code"), subject to certain conditions. However, this opinion of counsel is not
binding on the Internal Revenue Service (the "IRS"). In such opinion, counsel
has opined that if certain conditions are met, no taxable gain or loss for
federal tax purposes will be recognized by ACNB shareholders upon the exchange
of ACNB common stock solely for CFC common stock, except to the extent that such
shareholders receive cash in lieu of fractional shares. A dissenting
shareholder who receives cash in lieu of CFC common stock will be taxed to the
extent that the cash exceeds such dissenting shareholder's basis in the ACNB
common stock. See "THE PROPOSED TRANSACTION -- Certain Federal Income Tax
Consequences." BECAUSE OF THE COMPLEXITIES OF THE FEDERAL INCOME TAX LAWS AND
BECAUSE THE TAX CONSEQUENCES MAY VARY DEPENDING UPON A HOLDER'S INDIVIDUAL
CIRCUMSTANCES OR TAX STATUS, IT IS RECOMMENDED THAT EACH STOCKHOLDER OF ACNB
CONSULT HIS OR HER TAX ADVISOR CONCERNING THE FEDERAL (AND ANY APPLICABLE STATE,
LOCAL OR OTHER) TAX CONSEQUENCES OF THE MERGER.

RESTRICTIONS ON RESALES BY AFFILIATES. As a condition to Carolina First
Corporation's obligation to consummate the Merger, affiliates of ACNB must
deliver written agreements to Carolina First Corporation that they will not
dispose of any shares of CFC common stock received upon consummation of the
Merger except in compliance with Rule 145 under the Securities Act or otherwise
in compliance

<PAGE>

with the Securities Act and rules and regulations promulgated thereunder.
See "THE PROPOSED TRANSACTION -- Restrictions on Resales by Affiliates."

ACCOUNTING TREATMENT. The Merger is expected to be accounted for as a
"pooling-of-interests" of ACNB and Carolina First Corporation under generally
accepted accounting principles.

MARKET PRICES AND DIVIDENDS. CFC common stock is traded on the Nasdaq
National Market. Carolina First Corporation currently pays a regular quarterly
dividend of $.06 per common share. Although Carolina First Corporation currently
expects to continue payment of its regular cash dividend on the CFC common
stock, there can be no assurance that Carolina First Corporation's current
dividend policy will continue unchanged after consummation of the Merger. The
declaration and payment of dividends on CFC common stock is subject to legal
restrictions and further depends upon business conditions, operating results,
capital and reserve requirements and the Carolina First Corporation Board of
Directors' consideration of other relevant factors.

Trading in ACNB common stock is limited. There are no market makers for
the ACNB common stock, and it is not listed on any exchange or with the Nasdaq
Stock Market. Management is aware of transactions in the ACNB common stock at
prices ranging from $9.50 to $13.50 per share over the past two years. The most
recent trade of which management is aware occurred in September, 1994 in which
3,400 shares were traded at $10.00 per share. Such trades may not be arm's
length transactions and may not be indicative of the market value of the ACNB
common stock.

ACNB has never paid any dividends, and ACNB's ability to pay dividends is
presently restricted by an agreement between ACNB and the Office of Comptroller
of the Currency (the "OCC"), as well as by the National Bank Act. See
"INFORMATION ABOUT ACNB -- Dividends."

The information presented in the following table reflects the last reported
sales prices for CFC common stock on October 12, 1994, the last trading day
prior to the public announcement of the proposed Merger, and the ACNB common
stock on an equivalent per share basis, calculated by multiplying the closing
price of the CFC common stock on such date by the 1.125 exchange ratio. The
table also reflects the last reported sales prices for CFC common stock on or
prior to February 6, 1995:

MARKET VALUES PER SHARE
Carolina First Corporation ACNB
Historical Historical Equivalent
<S> <C> <C> <C>
October 12, 1994 $ 15.50 $ 10.00 * $17.44

February 6, 1995 $ 14.13 Not Available $15.89

</TABLE>

* Estimated

ACNB stockholders are advised to obtain current market quotations for the
CFC common stock. The market price of CFC common stock on the Effective Date may
be higher or lower than the market price at the time the Merger Agreement was
executed, at the date of mailing this Proxy Statement/Prospectus, or at the time
of the Special Meeting.

<PAGE>

SELECTED CONSOLIDATED FINANCIAL DATA
The following tables present selected unaudited historical financial
information of Carolina First Corporation (consolidated) and ACNB and selected
unaudited combined pro forma financial information for Carolina First
Corporation (consolidated) and ACNB. Except for the Recent Financial
Developments, this information is derived from the historical financial
statements of Carolina First Corporation (consolidated) and ACNB, and should be
read in conjunction with such historical financial statements and the notes
thereto either contained elsewhere in this Proxy Statement/Prospectus or
incorporated herein by reference. The pro forma financial data is presented
using the pooling-of-interests method of accounting. The selected pro forma
combined unaudited financial information showing the combined results of
Carolina First Corporation (consolidated) and ACNB is provided for informational
purposes only. It is not necessarily indicative of actual results that would
have been achieved had the Merger been consummated on the dates or at the
beginning of the periods presented, nor is it necessarily indicative of future
results. For additional pro forma information, including pro forma results of
additional acquisitions by Carolina First Corporation, see "PRO FORMA COMBINED
FINANCIAL STATEMENTS."

CAROLINA FIRST CORPORATION

Nine Months Ended
Years Ended December 31, September 30,
1989 1990 1991 1992 1993 1993 1994(1)
(dollars in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF INCOME DATA
Net interest income $ 8,021 $ 10,241 $ 12,866 $ 17,819 $ 26,943 $ 19,346 $ 28,864
Provision for loan losses 869 790 1,423 1,453 909 909 450
Noninterest income, excluding
securities transactions 967 1,099 1,622 2,939 5,590 3,673 6,014
Securities transactions 17 (4) 664 517 662 546 189
Noninterest income 984 1,095 2,286 3,456 6,252 4,219 6,203
Noninterest expenses 6,695 8,927 11,607 16,145 25,178 17,649 27,186
Net income 925 1,045 1,680 2,517 4,935 3,408 5,247
Dividends on common stock -- -- -- -- 214 -- 668
Dividends on preferred stock -- -- -- 625 1,930 1,381 1,702
Net income applicable to
common stockholders 925 1,045 1,680 1,892 3,005 2,027 3,545
BALANCE SHEET DATA (PERIOD END)
Total assets $326,475 $345,745 $447,314 $529,063 $816,421 $754,649 $1,067,664
Debt securities and temporary
investments 74,197 42,186 69,007 80,766 168,938 139,696 125,442
Loans, net of unearned income 232,995 275,315 338,701 396,557 565,158 536,890 816,341
Allowance for loan losses 2,041 2,403 3,727 4,263 5,688 5,352 5,029
Total earning assets 307,192 317,501 407,708 477,323 734,346 676,586 941,783
Total deposits 287,565 299,933 407,371 476,268 724,585 651,997 940,275
Borrowed funds 3,473 12,260 2,755 2,591 16,779 33,324 30,714
Long-term debt 3,376 276 1,322 1,268 1,214 1,264 1,212
Preferred stock -- -- -- 10,319 15,662 25,891 37,063
Stockholders' equity 28,834 30,235 31,875 44,225 62,869 62,281 87,024
PER SHARE DATA(2)
Net income per common share:
Primary $ 0.29 $ 0.32 $ 0.51 $ 0.57 $ 0.90 $ 0.61 $ 0.79
Fully diluted n/a n/a n/a n/a n/a n/a 0.77
Book value per common
share (period end) 8.94 9.28 9.71 9.90 10.27 10.17 10.45
Tangible book value per
common share (period end) 8.94 9.28 8.90 9.07 7.02 6.39 6.85
Common shares outstanding:
Weighted average 3,221,792 3,233,633 3,266,288 3,290,692 3,331,787 3,313,613 4,519,486
Period end 3,224,142 3,259,429 3,284,593 3,306,008 4,493,710 3,348,601 4,524,361

</TABLE>

(1) This information does not reflect the writedown of approximately
$6,000,000 and tax liability of approximately $1,000,000 which
occurred in the fourth quarter of 1994. See "INFORMATION ABOUT
CAROLINA FIRST CORPORATION--Recent Developments--Corporate
Restructuring."

(2) Adjusted for stock dividends.

10
<PAGE>

AIKEN COUNTY NATIONAL BANK

Nine Months Ended
Years Ended December 31, September 30,
1989 1990 1991 1992 1993 1993 1994
(dollars in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF INCOME DATA
Net interest income $ 856 $ 1,225 $ 1,429 $ 1,550 $ 1,630 $ 1,231 $ 1,398
Provision for loan losses 332 3 264 375 52 53 30
Noninterest income, excluding
securities transactions 79 152 185 217 211 150 213
Securities transactions -- -- 2 19 -- -- --
Noninterest income 79 152 187 235 211 150 213
Noninterest expenses 883 1,132 1,282 1,544 1,677 1,238 1,354
Net income (279) 243 59 (134) 112 90 156
BALANCE SHEET DATA (PERIOD END)
Total assets $ 22,762 $35,752 $46,116 $ 45,288 $43,952 $44,419 $43,039
Debt securities and temporary
investments 2,270 6,323 8,075 9,365 10,260 10,864 7,755
Loans, net of unearned income 16,998 25,617 33,530 30,615 29,361 28,749 30,525
Allowance for loan losses 249 328 540 621 582 651 529
Total earning assets 20,150 32,231 41,700 40,096 39,621 39,613 38,280
Total deposits 17,588 31,536 41,849 41,431 40,092 40,571 39,045
Borrowed funds
Long-term debt 348 258 160 55 24 24 --
Stockholders' equity 3,422 3,664 3,723 3,589 3,701 3,679 3,808

PER SHARE DATA
Net income per common share $ (0.69) $ 0.60 $ 0.15 $ (0.33) $ 0.28 $ 0.22 $ 0.39
Book value per common
share (period end) 8.50 9.10 9.25 8.92 9.20 9.14 9.46
Tangible book value per
common share (period end) 8.50 9.10 9.25 8.92 9.20 9.14 9.46
Common shares outstanding:
Weighted average 402,500 402,500 402,500 402,500 402,500 402,500 402,500
Period end 402,500 402,500 402,500 402,500 402,500 402,500 402,500
</TABLE>

<PAGE>

PRO FORMA COMBINED SELECTED FINANCIAL DATA
OF CAROLINA FIRST CORPORATION AND ACNB

BALANCE SHEET DATA (PERIOD END)

Total assets $ 349,237 $ 381,497 $ 493,430 $ 574,351 $ 860,373 $ 799,068 $1,110,703

Debt securities and temporary
investments 76,467 48,509 77,082 90,131 179,198 150,560 133,197
Loans, net of unearned income 249,993 300,932 372,231 427,172 594,519 565,639 846,866
Allowance for loan losses 2,290 2,731 4,267 4,884 6,270 6,003 5,558
Total earning assets 327,342 349,732 449,408 517,419 773,967 716,199 980,063

Total deposits 307,153 331,469 449,220 517,699 764,677 692,568 979,320

Borrowed funds 3,473 12,260 2,755 2,591 16,779 33,324 30,714
Long-term debt 3,724 534 1,482 1,323 1,238 1,288 1,212
Preferred stock -- -- -- 10,319 15,662 25,891 37,063
Stockholders' equity 32,256 33,899 35,598 47,814 66,570 65,960 90,832

PER SHARE DATA(2)
Net income per common share:
Primary $ 0.18 $ 0.35 $ 0.47 $ 0.47 $ 0.82 $ 0.56 $ 0.74
Fully diluted n/a n/a n/a n/a n/a n/a 0.72
Book value per common
share (period end) 8.77 9.13 9.53 9.67 10.08 9.93 10.26
Tangible book value per
common share (period end) 8.77 9.13 8.81 8.93 7.12 6.60 6.99
Common shares outstanding:
Weighted average 3,674,604 3,686,445 3,719,100 3,743,504 3,784,599 3,766,426 4,972,299
Period end 3,676,954 3,712,241 3,737,406 3,758,820 4,946,523 3,801,414 4,977,174
</TABLE>

(1) This information does not reflect the write down of approximately
$6,000,000 and tax liability of approximately $1,000,000 which
occurred in the fourth quarter of 1994. See "INFORMATION ABOUT
CAROLINA FIRST CORPORATION--Recent Developments--Corporate Restructuring."

(2) Adjusted for stock dividends.

<PAGE>

COMPARATIVE PER SHARE DATA

The following table presents at the dates and for the periods indicated
(i) certain consolidated historical and pro forma combined per share data for
CFC common stock after giving effect to the Merger and (ii) certain historical
and pro forma data for ACNB common stock. The pro forma financial data is
presented using the pooling-of-interests method of accounting, and an exchange
ratio of 1.125 shares of CFC common stock for each share of ACNB common stock.
The data presented should be read in conjunction with the historical financial
statements and the related notes thereto included elsewhere herein or
incorporated herein by reference and in conjunction with the pro forma combined
condensed financial information included elsewhere herein. Data for 1994 is
derived from unaudited financial information. The data is not necessarily
indicative of actual results that would have been achieved had the Merger been
consummated at the beginning of the periods presented and is not indicative of
future results.

Historical Pro Forma
CFC ACNB CFC Combined ACNB Equivalent(1)
Primary Earnings Per Common Share
<S> <C> <C> <C> <C>
Years Ended December 31,
1994 (through 9/30/94) $ .79 $ .39 $ .74 $ .83
1993 .90 .28 .82 .92
1992 .57 (.33) .47 .53
1991 .51 .15 .47 .53
1990 .32 .60 .35 .36
1989 .29 (.69) .18 .21

Fully Diluted Earnings Per Share
Years Ended December 31,
1994 (through 9/30/94) .77 n/a .72 .81
1993 n/a n/a n/a n/a
1992 n/a n/a n/a n/a
1991 n/a n/a n/a n/a
1990 n/a n/a n/a n/a
1989 n/a n/a n/a n/a

Cash Dividends Declared Per Common Share
Years Ended December 31,
1994 (through 9/30/94) .15 -- .13 .15
1993 .05 -- .04 .05
1992 -- -- -- --
1991 -- -- -- --
1990 -- -- -- --
1989 -- -- -- --

Book Value Per Common Share
Years Ended December 31,
1994 (through 9/30/94) 10.45 9.46 10.26 11.54
1993 10.27 9.20 10.08 11.34
1992 9.90 8.92 9.67 10.88

1991 9.71 9.25 9.53 10.72

1990 9.28 9.10 9.13 10.27
1989 8.94 8.50 8.77 9.90
</TABLE>

(1) Calculated by multiplying the CFC Combined by the 1.125 exchange ratio.

<PAGE>

RECENT FINANCIAL DEVELOPMENTS

The following table presents selected unaudited financial information
of CFC (consolidated) and ACNB for the year ended December 31, 1994.
For further information, see "INFORMATION ABOUT ACNB--Recent Developments"
and "INFORMATION ABOUT CAROLINA FIRST CORPORATION--Recent Developments".

Year Ended December 31, 1994
(dollars in thousands, except per share data)
<S> <C> <C> <C>
Carolina First Pro Forma
Corporation ACNB Combined
STATEMENT OF INCOME DATA
Net interest income $ 41,627 $ 1,844 $ 43,471
Provision for loan losses 950 140 1,090
Noninterest income, excluding
securities transactions 7,624 287 7,911
Securities transactions 234 (159) 75
Noninterest income 7,858 129 7,987
Noninterest expenses 49,960 2,139 52,099
Net income (loss) (1,869) (306) (2,175)
Dividends on common stock 214 - 214
Dividends on preferred stock 2,433 - 2,433
Net income applicable to
common stockholders (4,302) (306) (4,608)

BALANCE SHEET DATA (PERIOD END)
Total assets $ 1,120,097 $41,625 $1,161,722
Debt securities and temporary
investments 117,559 6,726 124,285
Loans, net of unearned income 865,869 29,736 895,605
Allowance for loan losses 5,267 402 5,669
Total earning assets 983,428 36,462 1,019,890
Total deposits 925,448 38,022 963,470
Borrowed funds 106,040 - 106,040
Long-term debt 1,160 - 1,160
Preferred stock 37,014 - 37,014
Stockholders' equity 79,041 3,393 82,434

PER SHARE DATA (1)(2)
Net income (loss) per common share:
Primary ($0.95) ($0.73) ($0.93)
Fully diluted N/A N/A N/A
Book value per common
share (period end) 8.58 8.43 8.48
Tangible book value per
common share (period end) 4.16 8.43 4.46

Common shares outstanding:
Weighted average 4,521,274 402,500 4,974,087
Period end 4,581,247 402,500 5,034,060
</TABLE>

For further information,see "INFORMATION ABOUT ACNB--Recent Developments"
and "INFORMATION ABOUT CAROLINA FIRST CORPORATION--Recent Developments."

<PAGE>

INFORMATION CONCERNING THE SPECIAL MEETING

This Proxy Statement/Prospectus is being furnished to shareholders of ACNB
as of the Record Date in connection with the solicitation of proxies by the
Board of Directors of ACNB for use at the Special Meeting and at any adjournment
or adjournments thereof. The Special Meeting is to be held on March 20, 1995 at
10:30 a.m. at the main office of ACNB, 142 Chesterfield Street, S.E., Aiken,
South Carolina. This Proxy Statement/Prospectus also serves as the Prospectus
of Carolina First Corporation with regard to the offering of the CFC Shares to
shareholders of ACNB.

Holders of ACNB common stock are requested to complete, date and sign the
accompanying Proxy and return it promptly to ACNB in the enclosed postage-paid
envelope.

PURPOSE OF THE SPECIAL MEETING

The purpose of the Special Meeting is to consider and take action with
respect to approval of the Merger Agreement. Approval of the Merger Agreement
will require the affirmative vote of the holders of two-thirds of the
outstanding shares of ACNB common stock. See "Record Date and Voting Rights."
Approval of the Merger Agreement by holders of at least two-thirds of the
outstanding ACNB common stock is required by federal law.

This Proxy Statement/Prospectus, Notice of Special Meeting and the Proxy
are first being mailed to shareholders of ACNB on or about February 13, 1995.

RECORD DATE AND VOTING RIGHTS

Only the holders of ACNB common stock on the Record Date are entitled to
receive notice of and to vote at the Special Meeting and at any adjournments
thereof. On the Record Date, there were 402,500 shares of ACNB common stock
outstanding, which were held by 465 holders of record. Each share of ACNB
common stock outstanding on the Record Date is entitled to one vote as to each
of the matters submitted at the Special Meeting; provided, however, that shares
held of record by persons whose liabilities to ACNB are past due and unpaid may
not be voted at the Special Meeting.

A majority of the shares entitled to be voted at the Special Meeting
constitutes a quorum. If a share is represented for any purpose at the Special
Meeting by the presence of the registered owner or a person holding a valid
proxy for the registered owner, it is deemed to be present for purposes of
establishing a quorum. Therefore, valid proxies which are marked "Abstain" or
"Withhold" or as to which no vote is marked, including proxies submitted by
brokers that are the record owners of shares (so-called "broker non-votes"),
will be included in determining the number of shares present or represented at
the Special Meeting.

APPROVAL OF THE MERGER AGREEMENT REQUIRES THE AFFIRMATIVE VOTE OF TWO-
THIRDS OF THE OUTSTANDING SHARES OF ACNB COMMON STOCK. ACCORDINGLY, PROXIES
MARKED "ABSTAIN" AND SHARES THAT ARE NOT VOTED (INCLUDING BROKER NON-VOTES) WILL
HAVE THE SAME EFFECT AS VOTES AGAINST THE MERGER AGREEMENT.

As of January 16, 1995, the directors and executive officers of ACNB and
their affiliates owned a total of 86,688 shares, or approximately 21.5% of ACNB
common stock, all of which are expected to be voted in favor of the Merger
Agreement.

<PAGE>

PROXIES

The accompanying Proxy is for use at the Special Meeting. A shareholder
may use this Proxy if he is unable to attend the Special Meeting in person or
wishes to have his shares voted by proxy even if he does attend the Special
Meeting. All shares represented by valid proxies received pursuant to this
solicitation that are not revoked before they are exercised will be voted in the
manner specified therein. If no specification is made, the proxies will be
voted FOR approval of the Merger Agreement. The Board of Directors of ACNB is
not aware of any other matters that may be presented for action at the Special
Meeting of Shareholders, but if other matters do properly come before the
Special Meeting, it is intended that shares represented by proxies in the
accompanying form will be voted by the persons named in the Proxy in accordance
with their best judgment.

If a quorum is not obtained, or if fewer shares of ACNB common stock are
voted in favor of approval of the Merger than the number required for approval,
it is expected that the Special Meeting will be postponed or adjourned for the
purpose of allowing additional time for obtaining additional proxies or votes,
and, at any subsequent reconvening of the Special Meeting, all proxies will be
voted in the same manner as such proxies would have been voted at the original
convening of the meeting (except for any proxies which have theretofore
effectively been revoked).

The presence of a shareholder at the Special Meeting will not automatically
revoke such shareholder's proxy. The proxy may be revoked (1) by written notice
to the Secretary of ACNB at any time before it is voted, (2) by submitting a
proxy having a later date, (3) by such person appearing at the Special Meeting
and giving notice of revocation to the corporate officers responsible for
maintaining the list of shareholders, or (4) by giving notice of such revocation
in the open meeting of the shareholders.

Solicitation of proxies may be made in person or by mail, or by telephone
or telegraph by directors, officers and regular employees of ACNB, who will not
be specially compensated in such regard. Brokerage houses, nominees,
fiduciaries and other custodians will be requested to forward solicitation
materials to beneficial owners and secure their voting instructions, if
necessary, and will be reimbursed for the expenses incurred in sending proxy
materials to beneficial owners. ACNB will bear the costs associated with the
solicitation of proxies and other expenses associated with the Special Meeting.

No person is authorized to give any information or to make any
representation not contained or incorporated by reference in this Proxy
Statement/Prospectus and, if given or made, such information or representation
should not be relied upon as having been authorized by ACNB, Carolina First
Corporation or any other person. The delivery of this Proxy
Statement/Prospectus will not, under any circumstances, create any implication
that there has been no change in the affairs of ACNB or Carolina First
Corporation since the date of this Proxy Statement/Prospectus.

RECOMMENDATION

THE ACNB BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE MERGER AGREEMENT
AND BELIEVES THAT THE PROPOSED TRANSACTION IS FAIR TO AND IN THE BEST INTERESTS
OF ACNB AND ITS STOCKHOLDERS. THE ACNB BOARD OF DIRECTORS UNANIMOUSLY
RECOMMENDS THAT ACNB'S STOCKHOLDERS VOTE FOR APPROVAL OF THE MERGER AGREEMENT.

<PAGE>

THE PROPOSED TRANSACTION

THE FOLLOWING DESCRIPTION OF THE TERMS AND PROVISIONS OF THE MERGER IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE MERGER AGREEMENT, WHICH IS SET
FORTH IN FULL AS APPENDIX A TO THIS PROXY STATEMENT/PROSPECTUS AND INCORPORATED
HEREIN BY REFERENCE.

GENERAL DESCRIPTION OF THE TERMS OF THE MERGER

The Merger Agreement provides for the Merger of ACNB with and into Carolina
First Bank. As a result of the Merger, the separate corporate existence of ACNB
will cease and Carolina First Bank, as the surviving entity, will possess all
rights, franchises and interests of ACNB. On the Effective Date of the Merger,
each outstanding share of ACNB common stock will be converted into 1.125 shares
of CFC common stock.

Cash will be paid to holders of ACNB common stock in lieu of any fractional
share that would otherwise be issuable. The amount of such cash to be paid in
lieu of fractional shares will be based on the Fair Market Value of the CFC
common stock on the last trading day immediately preceding the Effective Date.
The "Fair Market Value" of the CFC common stock means, with respect to a
particular day in question, the average of the high and low sale prices as
quoted on the Nasdaq National Market for that particular day and the immediately
preceding four business days.

The Merger Agreement provides that Carolina First Corporation and ACNB will
each bear and pay their own costs and expenses incurred in connection with the
transactions contemplated in the Merger Agreement, including fees of attorneys
and accountants.

The Merger will become effective on the Effective Date, which will be
specified in the articles of merger to be filed with the South Carolina
Secretary of State. On the Effective Date, by operation of law, ACNB
shareholders will automatically become owners of CFC common stock and will no
longer be owners of ACNB common stock. After the Effective Date, each
outstanding certificate representing shares of ACNB common stock prior to the
Effective Date shall be deemed for all corporate purposes (other than the
payment of dividends and other distributions to which the former stockholders of
ACNB common stock may be entitled) to evidence only the right of the holder
thereof to surrender such certificate and receive the requisite number of shares
of CFC common stock in exchange therefor as provided in the Merger Agreement.

BACKGROUND OF AND REASONS FOR THE MERGER

Since the passage of legislation in 1986 permitting bank holding companies
in the southeastern region to operate in more than one state, the banking
industry in the Southeast has undergone a great deal of consolidation. This
consolidation has resulted in the acquisition of substantially all of the large
South Carolina banks by the larger out-of-state regional banking concerns. It
was in this consolidating environment that both Carolina First Corporation and
ACNB were created. Both institutions sought to target individuals and small to
medium-sized businesses in South Carolina that were believed to be ignored by
the larger regional banking concerns.

Carolina First Corporation's objective is to become the leading South
Carolina-based banking institution which is headquartered in the state. It
believes that it can accomplish this goal by being a "super-community" bank
which offers both the personalized service and "relationship" banking typically
found in

<PAGE>

community banks, as well as the sophisticated banking products offered by
the regional and super-regional institutions. Since its inception, it has
pursued a strategy of growth both internally and through acquisitions. As a
result of such strategy, Carolina First Corporation has engaged in numerous
acquisitions of financial institutions, branch locations and other financial
assets over the past five years. In the course of its continuing review of
potential acquisition candidates and markets, Carolina First Corporation began
considering the possibility of entering the Aiken market and the related
acquisition of ACNB.

Carolina First Corporation first approached ACNB about the possibility of a
business combination in May of 1994. Carolina First Corporation was assisted
and advised in this regard by Blalock & Company, a company headquartered in
Aiken, South Carolina which, among other things, provides consulting services to
financial institutions.

The ACNB Board of Directors initially determined, however, that it would
not be appropriate to pursue discussions about a business combination at that
time and chose not to engage in any specific negotiations with Carolina First
Corporation. Subsequently, in the summer of 1994, ACNB was approached by
another financial institution regarding the possibility of a business
combination between the two institutions. The Board of Directors of ACNB
considered the possibility of such a combination. Although the Board recognized
that it might be appropriate to consider a business combination with such
institution, it decided that before it could make a well-reasoned and informed
decision, the Board needed to make an effort to determine what other
alternatives might be available. Accordingly, the Board began studying the
relative merits of remaining independent and, at the same time, contacted
several other financial institutions to see whether any of them had an interest
in some form of business combination with ACNB. ACNB received proposals from
three financial institutions, one of which was again Carolina First Corporation.

After considering each of the proposals and the alternative of remaining
independent, ACNB's Board of Directors determined that the Carolina First
Corporation proposal contained terms that it believed to be in the best
interests of the ACNB stockholders and more favorable than the two other
proposals. During September and October, 1994, further discussions were held
with Carolina First Corporation regarding the terms of a possible transaction.
On October 4, 1994, the Board of Directors of ACNB met and considered the
proposed transaction and voted to enter into a letter of intent with Carolina
First Corporation outlining the basic terms of an agreement regarding the
proposed transaction. From October 4, 1994 to October 13, 1994, ACNB, with the
assistance of its legal advisors, negotiated the terms of a definitive
agreement.

At a meeting of the ACNB Board of Directors on October 13, 1994, the
management of ACNB, as well as ACNB's legal advisors, reviewed for the ACNB
Board of Directors, among other things, a summary of management's discussions
with Carolina First Corporation and the terms of the Merger Agreement. Based
upon that review and consideration of various other factors, the ACNB Board of
Directors unanimously approved and authorized the execution and adoption of the
Merger Agreement and executed the Merger Agreement on the same date.

In December 1994, the ACNB Board of Directors was informed of the corporate
reorganization and securitization plans of Carolina First Corporation, the facts
of which are discussed below in "INFORMATION ABOUT CAROLINA FIRST CORPORATION--
Recent Developments--Corporate Restructuring." After reviewing these
transactions and engaging in discussions with Carolina First Corporation
management, ACNB's Board of Directors affirmed their intention to pursue the
Merger.

During the course of negotiating the letter of intent and the Merger
Agreement, the Carolina First Corporation Board of Directors unanimously
approved the terms of the proposed acquisition. No significant alternative
transactions were pursued by Carolina First Corporation in the Aiken market
after May 1994.

<PAGE>

The terms of the Merger Agreement, including the consideration to be paid to
ACNB shareholders, were the result of arm's length negotiations between
Carolina First Corporation and ACNB.

ACNB REASONS. In reaching its determination that the Merger Agreement is fair
to, and in the best interests of, ACNB and its stockholders, the ACNB Board of
Directors consulted with its legal advisors, as well as with ACNB management,
and considered a number of factors, including the following:

(i) the ACNB Board of Directors' familiarity with and review of ACNB's
business, operations, earnings, managerial requirements and resources, prospects
and financial condition, including the prospects of continuing to operate under
ACNB's consent agreement with the OCC and the time, financial and regulatory
burdens associated therewith (See "INFORMATION ABOUT ACNB--Consent Agreement
with the OCC");

(ii) the ACNB Board of Directors' review of Carolina First Corporation's
business, operations, earnings and financial condition, on both an historical
and a prospective basis, the enhanced opportunities for operating efficiencies
that could result from the Merger, the enhanced opportunities for growth in the
Aiken market that the Merger would make possible, and the respective
contributions the parties would bring to a combined institution;

(iii) the commitments of Carolina First Corporation to retain ACNB
employees and to make substantial contributions in the communities served by
ACNB;

(iv) the ACNB Board of Directors' assessment that the terms of the Merger
Agreement and, based on historical stock prices and the conversion ratio of
1.125, the consideration to be received by the ACNB shareholders, were favorable
to the ACNB shareholders;

(v) the Board of Directors' assessment of Carolina First Corporation as an
ongoing institution, which it believes to have good asset quality, reserve
coverage, capital adequacy and profitability, as well as an active market for
its stock;

(vi) the ACNB Board of Directors' review of alternatives to the Merger,
including the alternatives of remaining independent and growing internally,
remaining independent for a period of time and then selling the company, and
remaining independent and growing through future acquisitions;

(vii) the ACNB Board of Directors' review of possible affiliation partners
for ACNB (other than Carolina First Corporation), the prospects of such other
possible affiliation partners, the likelihood of any such affiliation, and the
fact that none of the other potential partners expressed a present interest in a
transaction with terms as favorable as the Carolina First Corporation proposal;

(viii) the ACNB Board of Directors' belief, based on an analysis of the
anticipated financial effects of the Merger on Carolina First Corporation that,
upon consummation of the Merger, Carolina First Corporation and its subsidiaries
would exceed all applicable regulatory capital requirements;

(ix) the ACNB's Board of Directors' belief, based upon the anticipated
financial effects of the Merger, that CFC would be able to continue to pay
dividends at its current rate which would, under the projected exchange ratio,
result in previously unavailable dividend income to ACNB stockholders;

<PAGE>

(x) the ACNB Board of Directors' belief that, in light of the reasons
discussed above, the respective geographic areas in which ACNB and Carolina
First Corporation operate and the similarity in business outlook and approach
and corporate cultures between ACNB and Carolina First Corporation, Carolina
First Corporation was the most attractive choice as a long term affiliation
partner for ACNB;

(xi) the increased liquidity of the CFC common stock as compared to the
ACNB common stock;

(xii) the expectation that the Merger will generally be a tax-free
transaction to ACNB and its stockholders (see "--Certain Income Tax
Consequences of the Merger");

(xiii) the current and prospective economic environment, competitive
constraints and regulatory burdens facing financial institutions, including
ACNB; and

(xiv) the ACNB Board of Directors' assessment of the benefits of the Merger
to the employees of ACNB and the communities served by ACNB.

The ACNB Board of Directors did not assign any specific or relative weight
to the factors in their consideration.

Subsequent to entering into the Merger Agreement and pursuant to the
requirements of the Merger Agreement, ACNB obtained the financial opinion of
Carson Medlin that the exchange ratio to be paid ACNB shareholders by Carolina
First Corporation is fair, from a financial point of view, to the unaffiliated
shareholders of ACNB.

After receiving the opinion of Carson Medlin, the ACNB Board of Directors
met again and consulted with Carson-Medlin about the Merger. After further
considering the Merger and consulting with Carson-Medlin, ACNB's Board of
Directors reaffirmed its conclusion that the Merger and the Merger Agreement are
in the best interest of ACNB and its shareholders and recommended that the ACNB
shareholders vote for approval of the Merger Agreement.

CAROLINA FIRST CORPORATION REASONS. After consideration of relevant business,
financial, and market factors, the Board of Directors of Carolina First
Corporation believes that the Merger will provide it with a favorable means for
entering the Aiken market. Carolina First Corporation's goal is to be the
leading South Carolina-headquartered, state-wide financial institution, and
having a market presence in Aiken is a necessary component to this goal.
Carolina First Corporation believes that acquiring an existing institution is a
superior means of entry into a market, as compared to beginning operations de
novo, primarily because of the acquisition of the established customer
relationships. Carolina First Corporation believes that ACNB has valuable
community relationships which it will be able to use to expand its banking
operations in the Aiken market. Carolina First Corporation also believes that
terms of the proposed Merger are fair from its point of view, from a financial
perspective.

OPINION OF FINANCIAL ADVISOR

The Board of Directors of ACNB retained Carson Medlin to render its opinion
as to the fairness of the terms of the Merger to the unaffiliated shareholders
of ACNB from a financial point of view. Carson Medlin is a National Association
of Securities Dealers, Inc. member investment banking firm which specializes in
the securities of southeastern United States financial institutions. As part of
its investment

<PAGE>

banking activities, Carson Medlin is regularly engaged in valuation of
southeastern United States financial institutions and transactions relating to
their securities. ACNB selected Carson Medlin as its financial adviser on the
basis of Carson Medlin's experience and expertise in transactions similar to the
Merger. Carson Medlin is being paid $15,000 by ACNB for its services under the
terms of an engagement letter dated November 29, 1994.

Carson Medlin has delivered a written opinion dated as of the date of this
Proxy Statement/Prospectus to the Board of Directors of ACNB stating that the
consideration to be received by the unaffiliated shareholders of ACNB for their
ACNB Common Stock is fair, from a financial point of view. The full text of
Carson Medlin's written opinion is attached as Appendix C to this Proxy
Statement/Prospectus and should be read in its entirety with respect to the
procedures followed, assumptions made, matters considered, and qualification and
limitations on the review undertaken by Carson Medlin in connection therewith.
Carson Medlin's opinion is addressed to the ACNB Board only and does not
constitute a recommendation to any ACNB shareholder as to how such shareholder
should vote at the ACNB Special Meeting or as to any other matter. The summary
of the opinion of Carson Medlin set forth in this Proxy Statement/Prospectus is
qualified in its entirety by reference to the full text of such opinion attached
as Appendix C hereto. Carson Medlin has relied upon, without independent
verification, the accuracy and completeness of the information reviewed by it
for purposes of such opinion. Carson Medlin did not undertake any independent
evaluation or appraisal of the assets of ACNB and Carolina First Corporation,
nor was it furnished with any such appraisals.

In connection with rendering its opinions, Carson Medlin performed a
variety of financial analyses. The preparation of a fairness opinion of this
nature involves various determinations as to the most appropriate and relevant
methods of financial analyses and the application of those methods to the
particular circumstances, and, therefore, is not readily susceptible to partial
analysis or summary description. Carson Medlin believes that its analysis must
be considered together as a whole and that selecting portions of such analyses
and the facts considered therein, without considering all other factors and
analyses, could create an incomplete view of the analyses and the process
underlying Carson Medlin's opinion regarding the Merger. In its analyses, Carson
Medlin made numerous assumptions with respect to industry performance, business
and economic conditions, and other matters, many of which are beyond the control
of ACNB and Carolina First Corporation and which may not be realized. Any
estimates contained in Carson Medlin's analyses are not necessarily predictive
of future results or values, which may be significantly more or less favorable
than such estimates. Estimates of values of companies do not purport to be
appraisals or necessarily reflect the prices at which such companies or their
securities may actually be sold. None of the analyses performed by Carson
Medlin were assigned a greater significance by Carson Medlin than any other.

In connection with rendering its opinion dated the date hereof, Carson
Medlin reviewed (i) the Merger Agreement, (ii) ACNB's Annual Reports to
shareholders, including the audited financial statements of ACNB and the
unaudited financial statements of ACNB, (iii) the Annual and Quarterly Reports
on Forms 10-K and 10-Q of Carolina First Corporation for the five years ended
December 31, 1993 and the nine months ended September 30, 1994, (iv) monthly
interim financial statements of ACNB for the period January to November 1994,
(v) certain financial and operating information with respect to the business,
operations and prospects of ACNB and Carolina First Corporation, and (vi) this
Proxy Statement/Prospectus.

Carson Medlin also (a) held discussions with members of the senior
management of ACNB and Carolina First Corporation regarding the historical and
current business operations, financial condition and future prospects of their
respective companies, (b) reviewed the historical market prices and trading
activity for the common stocks of ACNB and Carolina First Corporation and
compared them with the historical prices and trading activities of certain
publicly-traded companies which it deemed to be relevant, (c)

<PAGE>

compared the results of operations of ACNB and Carolina First Corporation with
those of certain banking companies which it deemed to be relevant, (d) compared
the proposed financial terms of the Merger with the financial terms, to the
extent publicly available, of certain other recent business combinations of
commercial banking organizations, (e) analyzed the pro forma financial impact
of the Merger on Carolina First Corporation, and (f) conducted such other
studies, analyses, inquiries and examinations as Carson Medlin deemed
appropriate.

The following is a summary of selected analyses performed by Carson Medlin
in connection with its opinion.

STOCK TRADING HISTORY. Carson Medlin examined the history of the trading
prices for the CFC common stock and the relationship between movements of its
price and movements in the Standard & Poor's ("S&P") 500 Index. This analysis
showed that for the five year period ended December 31, 1994, the increase in
the market value of the CFC common stock (including the reinvestment of cash
dividends) was 17% compared to an increase (including dividend reinvestment) in
the S&P 500 Index of 52%. During the five year period considered, the equities
markets increased their valuation of Carolina First Corporation less than the
S&P 500 companies. However, the analysis also showed that for the three year
period ended December 31, 1994, the increase in the market value of CFC common
stock (including the reinvestment of cash dividends) was 77% compared to an
increase (including dividend reinvestment) in the S&P 500 Index of 20%.

Carson Medlin also compared Carolina First Corporation's stock price
performance for the year ended December 31, 1994 to that of 25 NASDAQ National
Market-traded banks (the "NASDAQ NM Banks"), selected from among a group of 40
publicly-traded community commercial banks in Alabama, Florida, Georgia, North
Carolina, South Carolina, Tennessee and Virginia (the "SIBR Banks") as contained
in the SOUTHEASTERN INDEPENDENT BANK REVIEW (trade mark appears here) (the "Bank
Review"), a proprietary research publication published by Carson Medlin
quarterly since 1991. For the year ended December 31, 1994, the CFC common
stock price increased 13% compared to a 9% average increase for the NASDAQ NM
Banks. The S&P 500 Index (excluding reinvestment of dividends) declined by
approximately 2% during the year. On this basis, the CFC common stock price
increased by more than either of the S&P 500 Index or the NASDAQ NM Banks
during 1994.

Carson Medlin also examined the recent trading volume in CFC common stock,
which trades on the NASDAQ National Market System. Carson Medlin considers the
CFC common stock to be liquid and marketable in comparison with other community
bank holding companies.

Carson Medlin also compared Carolina First Corporation's stock price
performance during the period of January 1, 1991 to September 30, 1994 to those
of the SIBR Banks. The SIBR Banks range in asset size from approximately $70
million to $2.2 billion and in shareholders' equity from approximately $9
million to $217 million. Approximately 72% are listed on NASDAQ or the American
Stock Exchange and 28% are not traded in an established market. Carson Medlin
considers this group of financial institutions more comparable to Carolina First
Corporation and ACNB than larger, more widely-traded regional financial
institutions for the purposes of evaluating financial characteristics, stock
price performance, and trading volume.

For the four quarters ending September 30, 1994, the ratio of stock price
to latest year-to-date earnings (annualized) for SIBR Banks in the seven state
southeastern region was: low 11.1x, high 13.3x, mean 12.2x. For SIBR banks in
South Carolina only, the price to earnings ratio during the four quarters was:
low 10.7x, high 13.9x, mean 12.2x. Over the same period Carolina First
Corporation's price to

<PAGE>

earnings ratio ranged from a low of 12.6x to a high of 15.0x with a mean of
14.3x. Carolina First's common stock has traded on average at a higher price
to earnings ratio than both South Carolina SIBR banks and all SIBR banks.

For the four quarters ending September 30, 1994, the stock price as a
percentage of book value for SIBR Banks in the Southeast was: low 139%, high
155% and mean 146%. For SIBR banks in South Carolina only, the price to book
ratio for the four quarters was: low 126%, high 147% and mean 138%. On the
basis of stockholders' equity as stated, Carolina First Corporation's recent
price to book ratio ranged from a low of 111% to a high of 149% with a mean of
132%. On a tangible stockholders' equity basis, Carolina First Corporation's
price to book ratio for the four quarter ranged from a low of 185% to a high of
223% with a mean of 208%, Carolina First Corporation's common stock has traded
on average at a lower price to stated book value ratio than both South Carolina
SIBR banks and all SIBR banks. This level may have resulted in part from
Carolina First Corporation's material level of intangible assets.

For the four quarters ending September 30, 1994, the stock price as a
percentage of assets for SIBR Banks in the Southeast was: low 13.5%, high 16.9%,
mean 14.6%. For SIBR banks in South Carolina only, the price as a percentage of
assets for the four quarters was: low 8.2%, high 10.3%, mean 9.2%. Carolina
First Corporation's recent price to assets ratio ranged from a low of 6.3% to a
high of 8.0% with a mean of 7.2%. Carolina First Corporation's common stock has
traded on average at a lower price to assets ratio than the SIBR banks in South
Carolina and the Southeast as a whole.

INDUSTRY COMPARATIVE ANALYSIS. In connection with rendering its opinions,
Carson Medlin compared selected operating results of ACNB to the SIBR Banks.
Carson Medlin compared, among other factors, the profitability, capitalization,
deposit growth rate, loan to deposit ratio, and asset quality of ACNB to these
financial institutions. ACNB has a lower level of total assets and
shareholders' equity than the average SIBR Bank. In addition, ACNB has been
less profitable and is less well capitalized than the average SIBR Bank, ACNB's
asset quality ratios are substantially less favorable than the SIBR Banks.

Carson Medlin also compared selected operating results of Carolina First
Corporation to a peer group of three SIBR Banks located in South Carolina.
Carolina First Corporation is the largest of the four institutions in terms of
assets and the second largest in market capitalization among these four SIBR
Banks. Carolina First Corporation's profitability is lower than and its asset
quality and capitalization measures are higher than these South Carolina SIBR
Banks.

COMPARABLE TRANSACTION ANALYSIS. Carson Medlin reviewed all transactions
that were announced publicly between January 1, 1993 and November 30, 1994 which
involved the acquisition of commercial banks in seven southeastern states,
including South Carolina. This search resulted in an analysis of the terms of
129 transactions. Carson Medlin considered, among other factors, the earnings,
capital level, asset size and quality of assets of the acquired financial
institutions. Carson Medlin compared the transaction prices to trailing four
quarter's earnings, stated book value and total assets and deposit premiums (the
ratio of the purchase premiums over stated book value compared to total
deposits). Carson Medlin determined that of the 129 transactions considered, 41
transactions were most comparable to the acquisition of ACNB by Carolina First
Corporation (comparability being based on size, profitability, type of market
and other characteristics of the acquired and acquiring banks).

In comparing the terms of the Merger Agreement to those of comparable
transactions, Carson Medlin assumed a per share market value for the CFC common
stock of $15.00 (the "CAFC Share Value"), which was a value between the market
price of the stock as of the date of the initial public announcement of the
Merger and the date of this Proxy Statement/Prospectus.

<PAGE>

Carson Medlin calculated a range of purchase prices as a percentage of
stated book value for the comparable transactions of from a low of 117.5% to a
high of 248.3%, with a mean of 189.7%. These transactions indicated a range of
aggregate value for ACNB of from $4.5 to $9.5 million, with mean $7.2 million.
The aggregate consideration implied by the terms of the Merger Agreement
assuming the CAFC Share Value is approximately $6.8 million and implies a price
to book value multiple of 178% or slightly below the average for the comparable
transactions.

Carson Medlin calculated a range of purchase prices as a multiple of
earnings for the comparable transactions of from a low of 8.0x to a high of
24.7x, with a mean of 16.9x. These transactions indicated a range of aggregate
value for ACNB of from $1.7 to $5.1 million, with a mean of $3.5 million. The
aggregate consideration implied by the terms of the Merger Agreement at
announcement is approximately $6.8 million and implies a price to earnings
multiple of 32.7x, almost twice the average for the comparable transactions.

Carson Medlin calculated the deposit premiums for the comparable
transactions and found a range of values of from a low of 1.7% to a high of
24.9%, with a mean of 10.9%. These transactions indicated a range of aggregate
value for ACNB of from $4.5 to $13.5 million, with a mean of $8.1 million. The
premium on ACNB's core deposits implied by the terms of the Merger
Agreement is 7.7%, below the average deposit premium for the comparable
transactions.

Finally, Carson Medlin also calculated a range of purchase prices as a
percentage of total assets for the comparable transactions of from a low of
10.0% to a high of 26.7%, with a mean of 17.7%. The indicated range of
aggregate value for ACNB under the price to assets approach is from $4.3 to
$11.5 million, with a mean value of $7.6 million. The percentage of total
assets implied by the terms of the Merger Agreement is approximately 15.8%,
slightly below the average for the comparable transactions.

No company or transaction considered (for comparative purposes) in the
preceding Industry Comparative or Comparable Transaction Analyses sections is
identical to ACNB, Carolina First Corporation or the Merger. Accordingly, an
evaluation of the results of these analyses necessarily involves complex
considerations and judgments concerning differences in financial and operating
characteristics of ACNB and Carolina First Corporation, and other factors that
could affect the value of the companies to which it is being compared.
Mathematical analysis (such as determining the average or median) is not, in
itself, a meaningful method of using comparable industry or transaction data.

REVIEW OF RESEARCH ON CAROLINA FIRST CORPORATION. Carson Medlin reviewed
research information concerning Carolina First Corporation published in 1994 by
certain investment and investment-related firms, including J.C. Bradford & Co.,
Fox-Pitt, Kelton Inc., and S&P. Information considered in these reports by
Carson Medlin included, but was not limited to, the authors' qualitative
assessment of Carolina First Corporation as well as estimates of Carolina First
Corporation's future profitability. Carson Medlin concluded that these research
findings, considered collectively, were favorable regarding Carolina First
Corporation's operations and future prospects.

PRESENT VALUE ANALYSIS. Carson Medlin calculated the present value of ACNB
Common Stock on the basis of ACNB remaining an independent bank for the next
five years, while increasing its assets by from 5% to 7% annually, earning from
.75% to 1.00% annually on average assets, and paying out from 5% to 20% of
earnings as dividends during the period. The analysis used discount rates of
12% to 18% and assumed an exit point of 5 years at 200% of their book value. On
the basis of these various assumptions, Carson Medlin calculated a present value
of ACNB on a stand-alone basis ranging from $5.7 to $7.4 million.

<PAGE>

The aggregate consideration implied by the terms of the Merger Agreement,
assuming the CAFC Share Value is approximately $6.8 million, near the upper
end of this valuation range.

CONTRIBUTION ANALYSIS. According to the terms of the Merger Agreement, the
shareholders of ACNB will receive approximately 452,813 shares of CFC common
stock. At September 30, 1994, there were 4,524,361 shares of CFC common stock
outstanding. For the three months ended September 30, 1994, there were
4,519,486 and 7,464,782 common shares of CFC common stock outstanding on average
on a primary basis and a fully diluted basis, respectively. Accordingly, on a
pro forma basis, for the three months ended September 30, 1994, holders of ACNB
would have held approximately 9.1% and 5.7% of the average outstanding common
shares of Carolina First Corporation subsequent to the Merger on a primary basis
and a fully diluted basis, respectively.

Carson Medlin analyzed the contribution of each of ACNB and Carolina First
Corporation to the assets, liabilities and earnings of the pro forma combined
company as of and for the nine months ended September 30, 1994. During the
first nine months of 1994, ACNB would have contributed 3% of core earnings, 3%
of net income before preferred dividends, and 4% of net income after preferred
dividends. At September 30, 1994, ACNB would have contributed 4% of earning
assets, 4% of total assets, 4% of total deposits, 7% of stated common
shareholders' equity, 14% of tangible common shareholders' equity, 4% of stated
total shareholders' equity, and 6% of tangible total shareholders' equity.

DILUTION ANALYSIS. Carson Medlin evaluated the potential impact of the
Merger on Carolina First Corporation's earnings and common shareholders' equity
per share. Based on certain assumptions as to the future profitability of ACNB
and Carolina First Corporation, Carson Medlin estimated that pro forma common
shareholders' equity per share would be reduced by approximately 2% and that
estimated 1995 earnings per common share would be reduced by approximately 1%.
Carson Medlin considers these levels of pro forma dilution of per share values
to be reasonable and typical for transactions such as the Merger.

SHAREHOLDER CLAIMS ANALYSIS. Carson Medlin compared the ownership of 1.125
shares of CFC common stock to the ownership of one share of ACNB Common Stock
from the perspective of claims on various balance sheet and income statement
variables. This analysis indicated that ACNB shareholders would have a claim to
less in the way of tangible common equity, but more in the way of stated common
equity, earnings, dividends, expected market value of stock, deposits and total
assets. Carson Medlin considers these factors to indicate that 1.125 shares of
CFC common stock is likely to have a higher expected value than one share of
ACNB as the date of consummation of the Merger.

The opinions expressed by Carson Medlin were based upon market, economic
and other relevant considerations as they existed and have been evaluated as of
the date of the opinions. Events occurring after the date of reaching the
opinions, including but not limited to, changes affecting the securities
markets, the results of operations or material changes in the assets or
liabilities of ACNB and Carolina First Corporation, could materially affect the
assumptions used in preparing the opinions and the conclusions reached.

EXCHANGE OF ACNB STOCK CERTIFICATES

As soon as practicable after the Effective Date, ACNB shareholders will be
sent transmittal forms for use in forwarding to Carolina First Corporation stock
certificates previously representing ACNB common stock for surrender and
exchange for certificates representing CFC common stock.

<PAGE>

ACNB SHAREHOLDERS SHOULD NOT SEND IN THEIR CERTIFICATES UNTIL THEY RECEIVE
THE TRANSMITTAL FORMS.

After the surrender of ACNB stock certificates by an ACNB shareholder,
Carolina First Bank, as transfer agent for Carolina First Corporation (the
"Agent"), will deliver certificates to such shareholder representing the
aggregate number of shares of CFC common stock to which such shareholder is
entitled under the Merger Agreement. Certificates for CFC common stock
distributable to the former shareholders of ACNB shall not be delivered to any
shareholder except upon surrender by such shareholder of the certificate or
certificates for shares of ACNB common stock with respect to which the shares of
CFC common stock are deliverable, or upon appropriate arrangements with respect
to missing certificates, which may include the furnishing of a satisfactory
indemnity bond. Any dividends or other distributions with respect to CFC common
stock for which certificates have not been delivered will be remitted by
Carolina First Corporation to the Agent and held by the Agent until the
expiration of one year after the Effective Date. During such one year period,
upon the subsequent delivery by ACNB shareholders of certificates or the making
of appropriate arrangements with respect to missing certificates, such dividends
or other distributions shall be paid by the Agent to the former ACNB
shareholders, without any interest thereon. After the expiration of such one
year period, any remaining funds deposited by Carolina First Corporation with
the Agent shall be returned to Carolina First Corporation and any former ACNB
shareholder entitled thereto shall look only to Carolina First Corporation for
payment.

CONDITIONS TO CONSUMMATION OF THE MERGER

The respective obligations of Carolina First Corporation, Carolina First
Bank and ACNB to consummate the Merger are subject to the satisfaction of
certain conditions, including, without limitation, the taking of all necessary
corporate action with respect to the Merger Agreement, including the approval of
the Merger Agreement by the stockholders of ACNB; the continuing effectiveness
of the registration statement under the Securities Act and applicable state
securities or "Blue Sky" laws or exemptions to those laws; the receipt of all
necessary regulatory approvals for the Merger and expiration of all notice
periods and waiting periods required after the granting of any such approvals;
the receipt of an opinion from Wyche, Burgess, Freeman & Parham, P.A., in form
and substance reasonably satisfactory to ACNB, substantially to the effect that
the Merger will, upon compliance with reasonable conditions, qualify as a tax
free reorganization under Section 368(a) of the Code; the absence of any order,
writ decree or injunction of a judicial authority or agency which enjoins or
prohibits consummation of the transactions contemplated by the Merger Agreement;
the receipt of all permits, consents or other authorizations necessary to the
consummation of the Merger; the accuracy of the representations and warranties
set forth in the Merger Agreement in all material respects as of the Effective
Date as though made on and as of such date; the performance by ACNB and Carolina
First Corporation in all material respects of all material obligations and
compliance with all material covenants required by the Merger Agreement; and the
receipt of certain opinions of counsel and certificates from officers of
Carolina First Corporation and ACNB.

Consummation of the Merger also is subject to the conditions that from the
date of the Merger Agreement through the Effective Date, the business of ACNB
shall have been conducted in the usual and customary manner, and neither
Carolina First Corporation nor ACNB shall have suffered a material casualty or a
material adverse change in their business or financial condition. It is also a
condition that Carolina First Corporation will have determined that the Merger
will qualify for the pooling-of-interests method of accounting and received
written agreements from the affiliates of ACNB that they will not sell any
shares of CFC common stock received upon consummation of the Merger (a) in such
a manner so as to destroy the tax-free status of the Merger or the qualification
by the Merger as a pooling-of-interests transaction, and (b)

<PAGE>

except in compliance with Rule 145 under the Securities Act or otherwise in
compliance with the Securities Act and rules and regulations promulgated
thereunder. A further condition of the Merger is that dissenters' rights
pursuant to 12 U.S.C. B 214a with respect to the Merger will not have been
exercised by the holders of more than 10% of the outstanding shares of ACNB
common stock. See "THE PROPOSED TRANSACTION -- Rights of Dissenting
Shareholders of ACNB."

Carolina First Corporation and ACNB may waive certain of the conditions
imposed with respect to their respective obligations to consummate the Merger.

TERMINATION

The Merger Agreement may be terminated at any time on or prior to the
Effective Date by the mutual consent in writing of the parties. Either party
may elect to terminate the Merger Agreement (i) if a permanent injunction or
other order shall have been issued by any state or federal court, or
governmental or regulatory body preventing consummation of the transactions
contemplated by the Merger Agreement; (ii) if the other party has failed to
comply with the agreements or fulfill the conditions contained in the Merger
Agreement if such failure of compliance or fulfillment is material to the
consolidated businesses of either Carolina First Corporation or ACNB and the
breaching party has been given notice of the failure to comply and a reasonable
time to cure; (iii) if the Closing has not occurred by April 30, 1995; or (iv)
by ACNB if the average of the closing sales price of CFC common stock for any
period of ten consecutive trading days from October 13, 1994 through the day
before the closing date is less than $12.00 per share.

AMENDMENT

The Merger Agreement may be amended or supplemented in writing by mutual
agreement of Carolina First Corporation and ACNB.

CONDUCT OF ACNB'S AND CAROLINA FIRST CORPORATION'S BUSINESS PRIOR TO THE
EFFECTIVE DATE

Under the terms of the Merger Agreement, ACNB may not, without the prior
written consent of Carolina First Corporation, which consent may not be
unreasonably withheld, among other things: (i) carry on its business other than
in the ordinary course in substantially the same manner as theretofore
conducted; (ii) amend its Articles of Association or Bylaws; (iii) except for
existing items or in the ordinary course of business in accordance with past
practice, issue, grant, pledge, sell, or authorize the issuance of, reclassify,
redeem, purchase or otherwise acquire any shares of its capital stock or any
rights, warrants or options to acquire any such shares; (iv) declare, set aside
or pay dividends or change its equity capital structure; (v) take, agree to take
or knowingly permit any action that would be contrary to or breach any of the
terms or provisions of the Merger Agreement, or which would cause ACNB's
representations in the Merger Agreement to be or become untrue in any material
respect; (vi) incur any indebtedness for borrowed money other than in the
ordinary course of business; (vii) except for expenses attendant to the Merger
and current contractual obligations, incur any expense in excess of $25,000;
(viii) grant any executive officers any increase in compensation, except in the
ordinary course in accordance with past practice and only upon prior notice to
Carolina First Corporation, or enter into any employment agreement with any
executive officer; or (ix) acquire or agree to acquire any business. The Merger
Agreement also requires ACNB to promptly advise Carolina First Corporation of
any change in its business which is or may be reasonably expected to be
materially adverse to ACNB's business.

<PAGE>

Under the terms of the Merger Agreement, Carolina First Corporation may not,
without the prior written consent of ACNB, which consent may not be unreasonably
withheld, among other things: (i) carry on its business other than in the
ordinary course in substantially the same manner as theretofore conducted; (ii)
amend its Articles of Incorporation or Bylaws in any manner that will adversely
affect the ACNB stockholders in any material respect; (iii) create or issue any
shares of capital stock except (A) shares it is already obligated to issue
(including shares in connection with prior offerings of convertible preferred
stock), or (B) shares in connection with pending acquisitions, or in the
ordinary course in accordance with past practice (such as employee stock grants
or options); or (iii) take, agree to take or knowingly permit any action that
would be contrary to or breach any of the terms or provisions of the Merger
Agreement, or which would cause Carolina First Corporation's representations in
the Merger Agreement to become untrue in any material respect. The Merger
Agreement also requires Carolina First Corporation to promptly advise ACNB of
any change in its business which is or may reasonably be expected to be
materially adverse to Carolina First Corporation.

REQUIRED REGULATORY APPROVALS

The Merger is subject to certain regulatory approvals as set forth below.
To the extent that the following information describes statutes and regulations,
it is qualified in its entirety by reference to the particular statutes and
regulations promulgated under such statutes.

The Merger of ACNB with Carolina First Bank is subject to approval of the
FDIC pursuant to the Bank Merger Act (12 U.S.C. 1828 ET SEQ.). The Bank Merger
Act requires that the FDIC take into consideration the financial and managerial
resources and future prospects of the existing and proposed institutions and the
convenience and needs of the communities to be served. Further, the FDIC may
not approve the Merger if it would result in a monopoly or if it would be in
furtherance of any combination or conspiracy to monopolize or attempt to
monopolize the business of banking in any part of the United States, or if the
effect in any section of the country may be substantially to lessen competition
or to tend to create a monopoly, or if the Merger would be in any other manner
in restraint of trade, unless the FDIC finds that the anticompetitive effects of
the Merger are clearly outweighed in the public interest by the probable effect
of the transactions in meeting the convenience and needs of the communities to
be served. In addition, the FDIC must take into account the record of
performance of the existing and proposed institutions under the Community
Reinvestment Act of 1977 ("CRA") in meeting the credit needs of the entire
community, including low- and moderate-income neighborhoods, served by such
institutions. Applicable regulations also require publication of notice of the
application for approval of the Merger and provide an opportunity for the public
to comment on the application in writing and to request a hearing. Subject to
certain exceptions, the Bank Merger Act provides that no bank merger may be
consummated until the 30th day after approval, during which time the United
States Department of Justice (the "DOJ") may challenge the merger on antitrust
grounds. Carolina First Corporation has submitted an application to the FDIC
for approval to consummate the Merger, which application is currently pending.

The Merger also is subject to approval by the State Board under Section 34-
24-30 of the South Carolina Bank Holding Company Act ("SCBHCA"). Under Section
34-24-50 of the SCBHCA, the State Board may approve the Merger only after
determining that the Merger would not create anticompetitive or monopolistic
effects on the South Carolina banking business. The State Board also must take
into consideration the financial and managerial resources and future prospects
of the companies and banks involved as well as the convenience and needs of the
communities to be served. In making this determination, the State Board will
wait until after the FDIC makes its determination and will deny the application
only if the State Board finds that the FDIC's determination is not supported by
evidence that is

<PAGE>

substantial when viewed in light of the whole record considered by the FDIC.
Carolina First Corporation has submitted an application to the State Board for
approval to consummate the Merger, and that application currently is pending.

Carolina First Corporation and ACNB expect that all necessary approvals
will be granted. However, there can be no assurance that such approvals will be
received and, if they are, there can be no assurance as to the date of such
approvals, that such approvals will not be conditioned upon matters that could
cause the Carolina First Corporation Board of Directors to abandon the Merger,
or that an action will not be brought by the DOJ challenging the Merger on
antitrust grounds.

The Merger will not proceed in the absence of all required approvals for
the Merger. Carolina First Corporation and ACNB are not aware of any other
governmental approvals or actions that are required for consummation of the
Merger except as described above. Should any such approval or action be
required, it is presently contemplated that such approval or action would be
sought or taken. There can be no assurance that any such approval or action, if
needed, could be obtained, would not delay consummation of the Merger.

OPERATIONS AFTER THE MERGER

After consummation of the Merger, the former ACNB banking locations will be
operated as branch locations of Carolina First Bank and such locations are
expected to conduct their business in substantially the same manner as prior to
the Merger. The ACNB officers and employees will continue as officers and
employees of Carolina First Bank in an at-will employment capacity, except that
certain ACNB employees will serve under employment contracts. See "THE PROPOSED
TRANSACTION--Interests of Certain Persons in the Merger." The ACNB officers and
employees will continue at approximately their current levels of compensation
and will be eligible for benefits available to other similarly situated officers
and employees of Carolina First Bank. The former ACNB directors will constitute
an Advisory Board for Carolina First Bank for the Aiken market.

After consummation of the Merger, it is anticipated that Carolina First
Bank will continue to conduct its business in substantially the same manner in
which it is now conducted.

ACCOUNTING TREATMENT

Carolina First Corporation expects to account for the acquisition of ACNB
as a pooling-of-interests. For the transaction to qualify for the pooling-of-
interests method, it must satisfy certain conditions, including the condition
that substantially all (90% or more) of the outstanding ACNB common stock must
be exchanged for CFC common stock. Under the pooling-of-interests method, the
assets and liabilities of Carolina First Bank and ACNB will be combined and
carried forward at their previously recorded amounts. The revenues and expenses
of Carolina First Bank and ACNB will be retroactively combined for the entire
fiscal period in which the combination occurs and for all periods prior to the
combination at historically recorded amounts. The consummation of the Merger is
conditioned upon Carolina First Corporation receiving reasonable assurance from
Elliott, Davis & Company, LLP that the Merger will qualify for pooling-of-
interests accounting treatment under generally accepted accounting principles.

<PAGE>

CERTAIN FEDERAL INCOME TAX CONSEQUENCES

The following is a summary of certain material federal income tax
consequences of the Merger, including certain consequences to holders of the
ACNB common stock who are citizens or residents of the United States and who
hold their shares as capital assets. It does not discuss all tax consequences
that may be relevant to ACNB shareholders subject to special federal income tax
treatment (such as insurance companies, dealers in securities, certain
retirement plans, financial institutions, tax exempt organizations or foreign
persons), or to ACNB shareholders who acquired their shares of ACNB's common
stock pursuant to the exercise of employee stock options or rights or otherwise
as compensation. Shareholders are urged to consult their own tax advisors as to
the specific tax consequences to them of the Merger, including the applicability
and effect of state, local and other tax laws. The summary does not address the
state, local or foreign tax consequences of the Merger, if any.

Pursuant to the terms of the Merger Agreement, ACNB will receive the
opinion of Wyche, Burgess, Freeman & Parham, P.A., dated as of the Effective
Date, to the effect that based upon the Code and regulations thereunder and
rulings issued by the IRS in transactions similar to those contemplated by the
Merger Agreement and assuming the Merger occurs in accordance with the Merger
Agreement and conditioned on the accuracy of certain representations made by
ACNB and Carolina First Corporation, for federal income tax purposes:

(1) The Merger will constitute a reorganization within the meaning of
Section 368(a) of the Code;

(2) No gain or loss will be recognized by either Carolina First Corporation
or ACNB as a result of the Merger;

(3) No gain or loss will be recognized by ACNB shareholders on the exchange
of their shares of ACNB common stock for CFC common stock (disregarding for
this purpose any cash received for fractional share interests or in connection
with the exercise of dissenters' rights);

(4) The tax basis of the CFC common stock to be received by ACNB
shareholders in connection with the Merger will be the same as the basis in
ACNB common stock surrendered in exchange therefor; and

(5) The holding period of the CFC common stock to be received by ACNB
shareholders in connection with the Merger will include the holding period of
ACNB common stock surrendered in exchange therefor, provided that ACNB common
stock is held as a capital asset at the date of the exchange.

FRACTIONAL SHARE INTERESTS. An ACNB shareholder who receives cash in lieu
of a fractional share interest in CFC common stock will be treated as having
received the cash in redemption of the fractional share interest. The receipt
of cash in lieu of a fractional share interest should generally result in
capital gain or loss to the holder equal to the difference between the amount of
cash received and the portion of the holder's federal income tax basis in the
ACNB common stock allocable to the fractional share interest. Such capital gain
or loss will be long-term capital gain or loss if the holder's holding period
for the CFC common stock received, determined as set forth above, is longer than
one year.

CASH RECEIVED BY HOLDERS OF ACNB COMMON STOCK WHO DISSENT. A shareholder
of ACNB who perfects his dissenter's rights under federal law and who receives
payment of the value of his shares of ACNB common stock will be treated as
having received such payment in redemption of such stock. Such

<PAGE>

redemption will be subject to the conditions and limitations of Section 302
of the Code, including the attribution rules of Section 318 of the Code. In
general, if the shares of ACNB common stock are held by the holder as a capital
asset at the Effective Date, such holder will recognize capital gain or loss
measured by the difference between the amount of cash received by such holder
and the basis for such shares. Each holder of ACNB common stock who
contemplates exercising his dissenter's rights should consult his own tax
adviser as to the possibility that any payment to him will be treated as
dividend income.

THE INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION ONLY AND IS BASED ON THE CODE (AND AUTHORITIES THEREUNDER) AS IN
EFFECT ON THE DATE OF THIS PROXY STATEMENT/PROSPECTUS, WITHOUT CONSIDERATION OF
THE PARTICULAR FACTS OR CIRCUMSTANCES OF ANY SHAREHOLDER. SHAREHOLDERS ARE
URGEDTOCONSULTWITHTHEIROWNTAXADVISORSWITHRESPECTTOTHEFEDERALINCOME TAX
CONSEQUENCES OF THE MERGER IN THEIR PARTICULAR SITUATIONS, AS WELL AS
CONSEQUENCES UNDER ANY APPLICABLE STATE, LOCAL OR FOREIGN TAX LAWS.

RESTRICTIONS ON RESALES BY AFFILIATES

The issuance of the CFC Shares has been registered under the Securities
Act. Accordingly, resales of the CFC Shares by non-affiliates of ACNB will not
require registration. However, under existing law, any person who is an
affiliate of ACNB at the time the proposed exchange is submitted to a vote of
the ACNB shareholders who wishes to sell CFC Shares will be required to either
(a) register the sale of the CFC Shares under the Securities Act, (b) sell in
compliance with Rule 145 promulgated under the Securities Act (permitting
limited sales under certain circumstances), or (c) utilize an exemption (if any)
from registration. Rule 145(d) requires that persons deemed to be ACNB
affiliates resell their CFC Shares pursuant to certain of the requirements of
Rule 144 under the Securities Act if such CFC Shares are sold within the first
two years after receipt thereof. After two years, if such person is not an
affiliate of Carolina First Corporation and Carolina First Corporation is
current in the filing of its periodic securities law filings, a former ACNB
affiliate may freely sell the CFC Shares without limitation. After three years
from the issuance of the CFC Shares, if such person is not a Carolina First
Corporation affiliate at the time of sale or for at least three months prior to
such sale, such person may freely sell such CFC Shares without limitation,
regardless of the status of Carolina First Corporation's periodic securities law
filings.

It is a condition to the consummation of the Merger, that affiliates of
ACNB agree in writing that they will not sell or reduce their risk with respect
to the CFC common stock to be received by them until Carolina First Corporation
has published financial results covering at least 30 days of post-exchange
combined operations. Stop transfer instructions will be given by Carolina First
Corporation to the Agent with respect to the CFC common stock to be received by
persons subject to the restrictions described above, and the certificates for
such stock may be appropriately legended.

An "affiliate" of ACNB, as defined by the rules promulgated pursuant to the
Securities Act, is a person who directly, or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control with,
ACNB at the time of consummation of the Merger Agreement. In this context, an
"affiliate" will generally include the following persons: directors or executive
officers, and the holders of 10% or more of ACNB common stock (and any relative
or spouse of any such person and any trusts, estates, corporations, or other
entities in which such persons have a 10% or greater beneficial or equity
interest).

<PAGE>

RIGHTS OF DISSENTING SHAREHOLDERS OF ACNB

THE FOLLOWING DISCUSSION IS MERELY A SUMMARY OF RIGHTS OF DISSENTING
SHAREHOLDERS PURSUANT TO FEDERAL LAW AND IS QUALIFIED IN ITS ENTIRETY BY THE
PROVISIONS OF 12 U.S.C. (SECTION MARK) 214A(B), A COPY OF WHICH IS INCLUDED
HEREWITH AS APPENDIX B. DISSENTING SHAREHOLDERS HAVE ONLY THOSE RIGHTS
PROVIDED BY 12 U.S.C.(SECTION MARK) 214A(B). ANY SHAREHOLDER WISHING TO
EXERCISE DISSENTERS' RIGHTS IS STRONGLY ADVISED TO CONSULT WITH AN ATTORNEY.

Any shareholder of ACNB who has voted against the Merger at the Special
Meeting, or has given notice in writing at or prior to such meeting to the
presiding officer that he dissents from the Merger, shall be entitled to receive
the value of the shares so held by him upon written request made to Carolina
First Corporation at any time before thirty days after the date of consummation
of the Merger, accompanied by the surrender of his stock certificates.

The value of such shares shall be ascertained, as of the date of the
Special Meeting, by an appraisal made by a committee of three persons, composed
of (1) one selected by the majority vote of the dissenting shareholders entitled
to payment in cash; (2) one selected by the directors of Carolina First
Corporation; and (3) one selected by the two so selected. The valuation agreed
upon by any two of the three appraisers shall govern. If the value so fixed
shall not be satisfactory to any dissenting shareholder who has requested
payment, that shareholder may, within five days after being notified of the
appraised value of his shares, appeal to the OCC, which shall cause a
reappraisal to be made which shall be final and binding as to the value of the
shares of the appealing shareholder.

If, within 90 days from the date of consummation of the Merger, for any
reason one or more of the appraisers is not selected, or the appraisers fail to
determine the value of such shares, the OCC shall upon written request of any
interested party cause an appraisal to be made which shall be final and binding
on all parties. The expenses of the OCC in making the reappraisal or the
appraisal, as the case may be, shall be paid by Carolina First Corporation.

RECOMMENDATION OF BOARD OF DIRECTORS

THE BOARD OF DIRECTORS OF ACNB HAS CONCLUDED THAT THE MERGER AGREEMENT IS
IN THE BEST INTERESTS OF ACNB AND HAS AUTHORIZED CONSUMMATION THEREOF, SUBJECT
TO APPROVAL OF THE SHAREHOLDERS, RECEIPT OF ALL REQUISITE REGULATORY APPROVALS,
AND SATISFACTION OF CERTAIN OTHER CONDITIONS. THE ACNB BOARD OF DIRECTORS
RECOMMENDS THAT THE ACNB SHAREHOLDERS VOTE TO APPROVE THE MERGER AGREEMENT.

<PAGE>

PRO FORMA COMBINED FINANCIAL INFORMATION

The unaudited Pro Forma Combined Condensed Balance Sheet is based on
combining the historical consolidated balance sheet for Carolina First
Corporation (as used in the financial statements contained in this Section,
"CFC") at September 30, 1994 with the balance sheet of ACNB at the same date,
and adjusting for the issuance of additional shares expected to be issued in the
Merger. It also reflects adjustments anticipated in connection with the
acquisition of Midlands National Bank by Carolina First Corporation. See
"INFORMATION ABOUT CAROLINA FIRST CORPORATION -- Recent Developments."

The unaudited Pro Forma Combined Capitalization is based on combining the
historical consolidated capitalization of Carolina First Corporation at
September 30, 1994 with the capitalization of ACNB at the same date, and
adjusting for the issuance of additional shares expected to be issued in the
Merger. It also reflects adjustments anticipated in connection with the
acquisition by Carolina First Corporation of Midlands National Bank (as used in
the financial statements contained in this Section, "Midlands").

The unaudited Pro Forma Combined Condensed Summary of Earnings (Excluding
Midlands National Bank) combines the consolidated statements of income of
Carolina First Corporation for the years ended December 31, 1991, 1992 and 1993
and the nine months ended September 30, 1994 with the consolidated statements of
income of ACNB for the same periods but does not reflect adjustments anticipated
in connection with the acquisition of Midlands National Bank by Carolina First
Corporation. The unaudited Pro Forma Combined Condensed Summary of Earnings
(Including Midlands National Bank) combines the consolidated statements of
income of Carolina First Corporation for the years ended December 31, 1991, 1992
and 1993 and the nine months ended September 30, 1994 with the consolidated
statements of income of ACNB and Midlands National Bank for the same periods.

The Merger is expected to be accounted for under the pooling of interests
method of accounting and pro forma data is derived in accordance with such
method.

Information set forth below should be read in conjunction with such
historical and pro forma financial statements and the notes thereto. The
unaudited pro forma information is provided for informational purposes only and
is not necessarily indicative of actual results that would have been achieved
had the Merger been consummated at the beginning of the period presented, nor is
it necessarily indicative of future results.

<PAGE>

Pro Forma Combined Condensed Balance Sheet
September 30, 1994

(dollars in thousands)

Pro Forma Pro Forma
CFC ACNB Adjustments Combined Midlands Adjustments Combined

<S> <C> <C> <C> <C> <C> <C> <C>
Assets:
Cash and due from banks . . . . $ 43,444 $ 2,432 $ -- $ 45,876 $ 1,789 $ -- $ 47,665
Federal funds sold . . . . . . 8,904 2,110 -- 11,014 3,060 $ -- 14,074
Investment securities . . . . . 116,538 5,645 -- 122,183 8,500 $ -- 130,683
Loans . . . . . . . . . . . . . 817,404 30,525 -- 847,929 27,885 $ -- 875,814
Less unearned income . . . . (1,063) -- -- (1,063) -- -- (1,063)
Less allowance for loan losses (5,029) (529) (5,558) (418) (5,976)
Net loans . . . . . . . . . 811,312 29,996 0 841,308 27,467 0 868,775
Premises and equipment . . . . 36,389 1,720 -- 38,109 1,317 -- 39,426
Other assets . . . . . . . . . 51,077 1,136 -- 52,213 762 -- 52,975
Total assets . . . . . . $ 1,067,664 $ 43,039 $ 0 $ 1,110,703 $ 42,895 $ 0 $ 1,153,598

Liabilities and stockholders' equity:
Liabilities
Deposits
Noninterest-bearing . . . . $ 108,575 $ 3,932 $ -- $ 112,507 $ 2,722 $ -- $ 115,229
Interest bearing . . . . . 831,700 35,113 -- 866,813 35,829 -- 902,642
Total deposits . . . . . . 940,275 39,045 0 979,320 38,551 0 1,017,871
Borrowed funds . . . . . . . 31,926 -- -- 31,926 42 -- 31,968
Other liabilities . . . . . . 8,439 186 -- 8,625 280 -- 8,905
Total liabilities . . . . . 980,640 39,231 0 1,019,871 38,873 0 94,854

Total stockholders' equity . . . 87,024 3,808 -- 90,832 4,022 -- 1,058,744

Total liabilities and stockholders'
equity . . . . . . . . . . . . $ 1,067,664 $ 43,039 $ 0 $ 1,110,703 $ 42,895 $ 0 $ 1,153,598

</TABLE>

<PAGE>

Pro Forma Combined Capitalization
September 30, 1994

(dollars in thousands)
<TABLE>
<CAPTION>
Pro Forma Pro Forma
CFC ACNB Adjustments Combined Midlands Adjustments Combined

<S> <C> <C> <C> <C> <C> <C> <C>
Long-term debt:
ESOP loan payable in annual installments of
$50,000, plus interest at 90% of prime. . $ 176 $ -- $ -- $ 176 $ -- $ -- $ 176
Mortgage debt . . . . . . . . . . . . . . . 1,089 -- -- 1,089 -- -- 1,089
Total long-term debt . . . . . . . . 1,265 0 0 1,265 0 0 1,265

Stockholders' equity:
Preferred stock-authorized . . 37,063 -- -- 37,063 -- -- 37,063
Common stock . . . . . . . . . 4,524 2,013 (1,560)(A) 4,977 1,772 (1,188)(B) 5,561
Surplus . . . . . . . . . . . . 38,247 1,985 1,560 (A) 41,792 1,773 1,188 (B) 44,753
Retained earnings . . . . . . . 8,591 (174) -- 8,417 551 -- 8,968
Noninvested restricted stock . (547) -- -- (547) -- -- (547)
Guarantee of ESOP debt . . . . (176) -- -- (176) -- -- (176)
Unrealized loss on securities available for sale (678) (16) -- (694) (74) -- (768)
Total stockholders' equity . . 87,024 3,808 0 90,832 4,022 0 94,854
Total capitalization . . $ 88,289 $ 3,808 $ 0 $ 92,097 $ 4,022 $ 0 $ 96,119

(A) Reflects the effects of issuing 453,000 shares of CFC common stock to holders of ACNB common stock.
(B) Reflects the effects of issuing 584,000 shares of CFC common stock to holders of Midlands common stock.

</TABLE>

<PAGE>

PRO FORMA COMBINED CONDENSED SUMMARY OF EARNINGS
(Excluding Midlands)
<TABLE>
<CAPTION>

Nine months ended
Years ended December 31, September 30,
1991 1992 1993 1994

(dollars in thousands, except per share data)

<S> <C> <C> <C> <C>
Interest income . . . . . . . . . . . . . . $ 39,025 $ 41,703 $ 51,760 $ 52,024
Interest expense . . . . . . . . . . . . . . 24,730 22,334 23,187 21,762
Net interest income. . . . . . . . . . . . $ 14,295 19,369 28,573 30,262

Provision for loan losses. . . . . . . . . . 1,687 1,828 961 480

Net interest income after provision
for loan losses. . . . . . . . . . . . . . 12,608 17,541 27,612 29,782

Noninterest income. . . . . . . . . . . . . . 2,473 3,691 6,463 6,416
Noninterest expenses. . . . . . . . . . . . . 12,889 17,689 26,855 28,540

Income before income taxes . . . . . . . . . 2,192 3,543 7,220 7,658

Income taxes . . . . . . . . . . . . . . . . . 454 1,160 2,173 2,255

Net income. . . . . . . . . . . . . . . . . . 1,738 2,383 5,047 5,403

Dividends on preferred stock. . . . . . . . . -- 625 1,930 1,702

Net income applicable to
common shareholders. . . . . . . . . . . . $ 1,738 $ 1,758 $ 3,117 $ 3,701

Net income per common share
Primary . . . . . . . . . . . . . . . . . . . $ 0.47 $ 0.47 $ 0.82 $ 0.74
Fully diluted . . . . . . . . . . . . . . . . n/a n/a n/a 0.72

Average shares outstanding

Primary . . . . . . . . . . . . . . . . . . 3,719,100 3,743,504 3,784,599 4,963,556
Fully diluted . . . . . . . . . . . . . . . 3,719,100 4,495,895 5,930,215 7,273,430
</TABLE>

<PAGE>

PRO FORMA COMBINED CONDENSED SUMMARY OF EARNINGS
(Including Midlands)
<TABLE>
<CAPTION>

Nine months ended
Years ended December 31, September 30
1991 1992 1993 1994

(dollars in thousands, except per share data)

<S> <C> <C> <C>
Interest income . . . . . . . . . . . . . . $ 41,964 $ 44,811 $ 55,016 $ 54,467
Interest expense . . . . . . . . . . . . . 26,613 24,010 24,608 22,754
Net interest income. . . . . . . . . . . . $ 15,351 20,801 30,408 31,713

Provision for loan losses. . . . . . . . . . 1,846 2,238 1,106 517

Net interest income after provision
for loan losses. . . . . . . . . . . . . 13,505 18,563 29,307 31,196

Noninterest income. . . . . . . . . . . . . 2,743 4,116 6,764 6,603
Noninterest expenses. . . . . . . . . . . . 13,875 18,898 28,295 29,615

Income before income taxes . . . . . . . . 2,373 3,781 7,771 8,184

Income taxes . . . . . . . . . . . . . . . . 458 1,184 2,386 2,440

Net income. . . . . . . . . . . . . . . . . 1,915 2,597 5,385 5,744

Dividends on preferred stock. . . . . . . . . 0 625 1,930 1,702

Net income applicable
to common shareholder $ 1,915 $ 1,972 $ 3,455 $ 4,042

Net income per common share
Primary . . . . . . . . . . . . . . . . . $ 0.47 $ 0.48 $ 0.83 $ 0.75
Fully diluted . . . . . . . . . . . . . . n/a n/a n/a 0.72

Average shares outstanding
Primary . . . . . . . . . . . . . . . . . 4,091,295 4,108,262 4,151,552 5,337,645
Fully diluted . . . . . . . . . . . . . . 4,091,295 4,806,653 6,297,168 7,647,519
</TABLE>

<PAGE>

INFORMATION ABOUT CAROLINA FIRST CORPORATION

IN GENERAL

CAROLINA FIRST CORPORATION. Carolina First Corporation is a bank holding
company headquartered in Greenville, South Carolina which engages in a general
banking business through its two subsidiaries: Carolina First Bank and Carolina
First Mortgage Company, which is a mortgage loan origination and servicing
company headquartered in Columbia, South Carolina. Carolina First Corporation,
which commenced operations in December 1986, currently conducts business in 47
locations in South Carolina and is the fifth largest independent South Carolina-
headquartered financial institution holding company. At September 30, 1994, it
had total assets of approximately $1.07 billion, total loans of approximately
$816 million and total deposits of approximately $940 million.

Carolina First Corporation was formed principally in response to
opportunities resulting from the takeovers of several South Carolina-based banks
by large southeastern regional bank holding companies. A significant number of
Carolina First Corporation's executive officers and management personnel were
previously employed by certain of the larger South Carolina-based banks that
were acquired by these southeastern regional institutions. Consequently, these
officers and management personnel have significant customer relationships and
commercial banking experience that have contributed to Carolina First
Corporation's loan and deposit growth. Carolina First Corporation targets
individuals and small to medium-sized businesses in South Carolina that require
a full range of quality banking services typically provided by larger regional
banking concerns, but that prefer the personalized service afforded by a South
Carolina-based institution.

Carolina First Corporation's objective is to become the leading South
Carolina-based banking institution headquartered in the state. It believes that
it can accomplish this goal by being a "super-community" bank which offers both
the personalized service and "relationship" banking typically found in community
banks, as well as the sophisticated banking products offered by the regional and
super-regional institutions. Carolina First Corporation currently serves three
principal market areas: the Greenville metropolitan area and surrounding
counties (located in the "Upstate" region of South Carolina); the Columbia
metropolitan area and surrounding counties (located in the "Midlands" region of
South Carolina); and Georgetown and Horry counties (located in the "Coastal"
region of South Carolina). Carolina First Corporation's principal market areas
are located in three of the four largest Metropolitan Statistical Areas of the
state.

Carolina First Corporation began its operations with the de novo opening of
Carolina First Bank in Greenville and has pursued a strategy of growth through
internal expansion and through the acquisition of branch locations and financial
institutions in selected market areas. Its more significant acquisitions
include the acquisition in August 1990 of First Federal Savings and Loan
Association of Georgetown (subsequently renamed Carolina First Savings Bank,
which was subsequently merged into Carolina First Bank on January 20, 1995) and
the acquisition of 12 branch locations of Republic National Bank in March 1993,
in which deposits of approximately $190 million were assumed. Approximately
half of Carolina First Corporation's total deposits have been generated through
acquisitions. Carolina First Corporation anticipates that it will continue to
expand in the future and is frequently in discussions regarding possible
acquisitions. See "--Recent Developments."

Carolina First Corporation is a legal entity separate and distinct from its
subsidiary bank and non-banking subsidiary. Accordingly, the right of Carolina
First Corporation, and thus the right of Carolina First Corporation's creditors
and shareholders, to participate in any distribution of the assets or earnings
of any subsidiary is necessarily subject to the prior claims of creditors of the
subsidiary, except to the extent that claims of Carolina First Corporation in
its capacity as a creditor may be recognized. The principal source of Carolina
First Corporation's revenues is dividends from its subsidiaries. See "--Certain
Regulatory Matters" for a

<PAGE>

discussion of regulatory restrictions on the ability of certain subsidiaries
to pay dividends to Carolina First Corporation.

CAROLINA FIRST BANK. Carolina First Bank is a South Carolina-chartered, non-
member bank and a wholly-owned subsidiary of Carolina First Corporation. It
engages in a general banking business through 44 locations, which are located
throughout South Carolina. It began its operations in December 1986 and at
September 30, 1994, had total assets of approximately $805 million, total loans
of approximately $609 million and total deposits of approximately $717 million.
Its deposits are insured by the FDIC.

RECENT DEVELOPMENTS

CORPORATE RESTRUCTURING. IN GENERAL. In the fourth quarter of 1994,
Carolina First Corporation initiated a reorganization which was designed to
improve the long-term competitive position of Carolina First Corporation. This
reorganization had several different components, although none of the components
was contingent upon or related to the other components. The reorganization
involved the merger of Carolina First Savings Bank and Carolina First Bank, the
transfer of Carolina First Bank's credit card portfolio off balance sheet to a
master trust, and the write-off of certain intangible assets. In connection
with these transactions, Carolina First Corporation incurred in the fourth
quarter of 1994, an aggregate one-time, after-tax write-down of approximately $6
million and a tax liability of $1 million. Such writedowns offset all earnings
of Carolina First Corporation in 1994. However, Carolina First Corporation
expects that on a going-forward basis, the aggregate effect of the
reorganization will be to increase Carolina First Corporation's pre-tax income
by approximately $2.8 million a year. The reorganization was undertaken by
Carolina First Corporation in an effort to improve its financial performance by
reducing expenses and finding alternative off-balance sheet income sources.
Absent the one-time charge associated with these corporate transactions,
Carolina First Corporation anticipates that it would have had net income of
approximately $7 million during 1994.

MERGER OF CAROLINA FIRST SAVINGS BANK AND CAROLINA FIRST BANK. In 1990,
Carolina First Corporation acquired First Federal Savings and Loan Association
of Georgetown, which was subsequently renamed Carolina First Savings Bank ("CF
Savings Bank"). From 1990 until its merger with Carolina First Bank on January
20, 1995, CF Savings Bank was operated as a separate savings bank subsidiary of
Carolina First Corporation. As part of the reorganization, Carolina First
Corporation determined to merge CF Savings Bank into Carolina First Bank. In
connection with such merger, Carolina First Corporation incurred a one-time tax
liability of approximately $1 million as a result of the different tax treatment
accorded the allowance for loan losses of CF Savings Bank and Carolina First
Bank. This merger is expected to result in significant savings for Carolina
First Corporation on a going-forward basis, primarily as a result of the
elimination of duplicative administration, the reduction of regulatory burdens
and the facilitation of corporate management.

SECURITIZATION OF CREDIT CARD PORTFOLIO. In December 1994, Carolina First
Bank began negotiations with an investment banking firm with a view toward the
securitization of substantially all of its credit card portfolio.
Carolina First Bank consummated such securitization, which is described
below, on January 24, 1995. As a result of the securitization and in
anticipation of its consummation, Carolina First Bank wrote down
approximately $4 million (after-tax) in intangible assets
in the fourth quarter of 1994.

In connection with the securitization, Carolina First Bank
transferred substantially all of its credit card accounts and receivables
(approximately $100 million) to a trust. Carolina First Bank retained an
interest in approximately 30% of the assets of the trust, while certain
interests in approximately 70% of the trust were sold to accredited
institutional investors. In connection with the transfer, Carolina
First Bank received proceeds of approximately $66,000,000. The various
interests in the trust have different rights with respect to the
payments

<PAGE>

received by the trust, and a substantial portion of Carolina First
Bank's interest is subordinated (with respect to losses) to such
institutional investors' interests. One of the principal benefits of
this structure is that Carolina First Bank will receive income from the
trust (assuming its continued viability), while the assets (except for
the 30% interest retained) are not included on Carolina First Bank's
balance sheet. In addition, this transaction is expected to provide
Carolina First Bank with significant liquidity to make loans in its
market areas. The trust documents provide that the trust arrangement may
be terminated in certain events, including in the event that credit card
loan losses exceed a stated percentage or in the event that principal
repayments exceed a stated percentage. In the event that the trust is
terminated, Carolina First Corporation will generally not be required to
repurchase the credit card accounts represented by the 70% interest sold
to accredited institutional investors. Carolina First Corporation
believes that the liability associated with the securitization is not
materially greater than the liability that would exist if Carolina First
Bank retained its credit card portfolio.

WRITEDOWN OF CERTAIN INTANGIBLE ASSETS. In the third quarter of 1994,
Carolina First Corporation retained a consulting firm to determine whether any
of its intangible assets were impaired and should be written off. Such
intangible assets were created principally in connection with acquisitions of
financial institutions and financial assets, and the origination of credit card
accounts. Such study determined that Carolina First Corporation should write
off after-tax approximately $2 million in intangible assets associated with the
origination of credit card accounts. Such writedown occurred in the fourth
quarter of 1994 in connection with the securitization of Carolina First Bank's
credit card portfolio and the merger of CF Savings Bank into Carolina First
Bank.

PROPOSED ACQUISITION OF MIDLANDS NATIONAL BANK. On November 14, 1994, Carolina
First Corporation and Carolina First Bank entered into a reorganization
agreement with Midlands National Bank ("Midlands National"), which provides for
the acquisition of Midlands National by Carolina First Corporation through the
merger of Midlands National with and into Carolina First Bank (the "Midlands
Transaction"). The Midlands Transaction is expected to be accounted for as a
pooling-of-interests and to result in the issuance of up to 584,000 shares of
CFC common stock in exchange for the outstanding shares of Midlands National
common stock. At December 31, 1994, Midlands National operated through three
locations in Prosperity, Newberry and Chapin, South Carolina and had
approximately $43 million in assets. In connection with the Midlands
Transaction, Carolina First Bank is expected to receive approximately $28
million in loans and approximately $38 million in deposits. At September 30,
1994, Midlands National's non-performing assets (which includes loans which are
90 days or more past due and still accruing interest) totalled 2.62% of total
loans and other real estate owned. For the years ended December 31, 1992 and
1993, Midlands National had net income of $214,000 and $338,000, respectively.
For the nine months ended September 30, 1994, Midlands National had net income
of $341,000.

Carolina First Corporation has filed all regulatory applications necessary
to its acquisition of Midlands National. Such regulatory applications are
currently pending. This transaction requires the approval of the Midlands
National Bank shareholders. Although Carolina First Corporation expects that
its acquisition of Midlands National will be consummated in March or April of
1995, no assurance of such fact may be given. For additional information
concerning the Midlands Transaction and its anticipated effect on Carolina First
Corporation, see "PRO FORMA COMBINED FINANCIAL INFORMATION" above.

OTHER ACQUISITIONS. Carolina First Corporation continues to explore
opportunities to acquire banks and other companies engaging in financial
institutions-related activities. It is not presently known whether, or on
what terms, such discussions will result in further acquisitions. Carolina
First Corporation's acquisition strategy is flexible in that it does not
require Carolina First Corporation to effect specific acquisitions so as to
enter certain markets or to attain specified growth levels. Rather than being
market driven or size motivated, Carolina First Corporation's acquisition
strategy reflects its willingness to consider potential acquisitions wherever
and whenever such opportunities arise based on the then-existing market
conditions and other circumstances. Carolina First Corporation's acquisitions
may be made by the exchange of stock, through cash purchases, or with other
consideration. Other than as described above, Carolina First Corporation
does not

<PAGE>

currently have any definitive understandings or agreements for any acquisitions
material to Carolina First Corporation. However, Carolina First Corporation
anticipates that it will continue to expand by acquisition in the future.

MARKET PRICES OF AND DIVIDENDS PAID ON CFC COMMON STOCK

The CFC common stock is, and the CFC Shares offered hereby will be, traded
on the Nasdaq National Market. The following table sets forth, for the periods
indicated, the high and low reported closing sale prices per share of CFC common
stock as reported by the Nasdaq Stock Market and the cash dividends per share of
the CFC common stock. The dividend and stock price information has been
adjusted to reflect stock dividends.

Price Range of CFC
Common Stock
High Low Dividends
1992
First Quarter.... $ 9.50 $ 7.34 $ --
Second Quarter... 9.75 8.16 --
Third Quarter.... 10.66 8.62 --
Fourth Quarter... 12.02 10.20 --

1993
First Quarter.... $ 11.79 $ 10.43 $ --
Second Quarter... 12.38 10.48 --
Third Quarter.... 12.38 11.43 --
Fourth Quarter... 14.05 11.67 --

1994
First Quarter.... $ 12.86 $ 11.43 $ 0.05
Second Quarter... 15.00 12.50 0.05
Third Quarter.... 15.75 14.00 0.05
Fourth Quarter... 14.00 13.25 0.06

Carolina First Corporation intends to continue its present policy of paying
quarterly cash dividends to its shareholders. However, the timing and amount of
future dividends will depend upon earnings, cash requirements, the financial
condition of Carolina First Corporation and its subsidiaries, applicable
government regulations and other factors deemed relevant by Carolina First
Corporation management. As described under "--Certain Regulatory Matters,"
various state and federal laws limit the ability of Carolina First Bank to pay
dividends to Carolina First Corporation.

SPECIAL CONSIDERATIONS

In addition to the other information contained in this Proxy
Statement/Prospectus, the following factors should be considered carefully when
evaluating Carolina First Corporation and the CFC common stock.

DEPENDENCE ON SENIOR MANAGEMENT. Carolina First Corporation is dependent
upon the services of certain of the senior executive officers of Carolina First
Corporation and its subsidiaries. The loss of the services of one or more of
such individuals could have an adverse effect on Carolina First Corporation. No
assurance can be given that replacements for any of these officers could be
employed if their services were no longer available. Carolina First Corporation
maintains key employee insurance on Mack I. Whittle, Jr., Carolina First
Corporation's Chief Executive Officer.

41
<PAGE>

GROWTH THROUGH ACQUISITIONS. Carolina First Corporation has experienced
significant growth in assets as a result of acquisitions. Moreover, Carolina
First Corporation anticipates engaging in selected acquisitions of financial
institutions and branch locations in the future. There are certain risks
associated with Carolina First Corporation's acquisition strategy that could
adversely impact net income. Such risks include, among others, incorrectly
assessing the asset quality of a particular institution being acquired,
encountering greater than anticipated costs of incorporating acquired businesses
into Carolina First Corporation and being unable to profitably deploy funds
acquired in an acquisition. Furthermore, there can be no assurance as to the
extent that Carolina First Corporation can continue to grow through
acquisitions. In the past, Carolina First Corporation has engaged in
acquisitions accounted for by the purchase method of accounting. Acquisitions
accounted for by the purchase method of accounting may lower the capital ratios
of the entities involved. Consequently, in the event that Carolina First
Corporation engages in significant acquisitions accounted for by the purchase
method of accounting in the future, Carolina First Corporation may be required
to raise additional capital in order to maintain capital levels required by the
Board of Governors of the Federal Reserve System (the "Federal Reserve"). In
the future, Carolina First Corporation may issue capital stock in connection
with additional acquisitions accounted for as a pooling of interests. Such
acquisitions and related issuances of stock may have a dilutive effect on
earnings per share and ownership.

ANTI-TAKEOVER MEASURES. Carolina First Corporation has certain anti-
takeover measures in place. These include (i) a Shareholders' Rights Plan
which, among other things, provides for the dilution of the CFC common stock
holdings of certain shareholders who acquire 20% or more of the CFC common stock
and attempt to acquire Carolina First Corporation without the consent of
management, (ii) certain management contracts which provide for additional
management compensation in the event that executive officers who are a party
thereto are terminated after a change in control of Carolina First Corporation,
and (iii) various charter provisions providing for, among other things, a
"staggered" board of directors and supermajority voting requirements in
connection with the removal of directors without cause and certain business
combinations involving Carolina First Corporation. Any one or more of these
measures may impede the takeover of Carolina First Corporation without the
approval of Carolina First Corporation's Board of Directors. See "CAROLINA
FIRST CORPORATION CAPITAL STOCK."

INCORPORATION OF CERTAIN INFORMATION BY REFERENCE

The following documents are hereby incorporated by reference:

Carolina First Corporation's Annual Report on Form 10-K for the fiscal year
ended December 31, 1993;

Carolina First Corporation's Quarterly Reports on Form 10-Q for the fiscal
quarters ended March 31, 1994, June 30, 1994 and September 30, 1994;

Carolina First Corporation's Current Reports on Form 8-K dated May 2, 1994,
November 22, 1994 and January 24, 1995; and

The description of the CFC common stock which is contained in its
registration statements filed under Section 12 of the Exchange Act, including
any amendment or report filed for the purpose of updating such description.

<PAGE>

reference in this Proxy Statement/Prospectus and to be a part hereof from
the respective dates of filing of such documents.

Any statement contained herein or in a document incorporated herein shall
be deemed to be modified or superseded for purposes of this Proxy
Statement/Prospectus to the extent that a statement contained herein or in any
other subsequently-filed document which also is incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Proxy Statement/Prospectus.

CERTAIN REGULATORY MATTERS

GENERAL

Carolina First Corporation and its subsidiaries are extensively regulated
under federal and state law. To the extent that the following information
describes statutory or regulatory provisions, it is qualified in its entirety by
reference to the particular statutory and regulatory provisions. Any change in
applicable laws may have a material effect on the business and prospects of
Carolina First Corporation. The operations of Carolina First Corporation may be
affected by possible legislative and regulatory changes and by the monetary
policies of the United States.

Carolina First Corporation. As a bank holding company registered under the
Bank Holding Company Act of 1956, as amended (the "BHCA"), Carolina First
Corporation is subject to regulation and supervision by the Federal Reserve.
Under the BHCA, Carolina First Corporation's activities and those of its
subsidiaries are limited to banking, managing or controlling banks, furnishing
services to or performing services for its subsidiaries or engaging in any other
activity that the Federal Reserve determines to be so closely related to banking
or managing or controlling banks as to be a proper incident thereto. The BHCA
prohibits Carolina First Corporation from acquiring direct or indirect control
of more than 5% of any class of outstanding voting stock, or substantially all
of the assets of any bank, or merging or consolidating with another bank holding
company without prior approval of the Federal Reserve. The BHCA also prohibits
Carolina First Corporation from acquiring control of any bank operating outside
the State of South Carolina (until September 29, 1995) unless such action is
specifically authorized by the statutes of the state where the bank to be
acquired is located. See " --Certain Regulatory Matters--Interstate Banking."

Additionally, the BHCA prohibits Carolina First Corporation from engaging
in or from acquiring ownership or control of more than 5% of the outstanding
voting stock of any company engaged in a nonbanking business unless such
business is determined by the Federal Reserve to be so closely related to
banking or managing or controlling banks as to be properly incident thereto.
The BHCA generally does not place territorial restrictions on the activities of
such nonbanking-related entities.

Further, the Federal Deposit Insurance Act, as amended ("FDIA"), authorizes
the merger or consolidation of any Bank Insurance Fund ("BIF") member with any
Savings Association Insurance Fund ("SAIF") member, the assumption of any
liability by any BIF member to pay any deposits of any SAIF member or vice
versa, or the transfer of any assets of any BIF member to any SAIF member in
consideration for the assumption of liabilities of such BIF member or vice
versa, provided that certain conditions are met and, in the case of any
acquiring, assuming or resulting depository institution which is a BIF member,
that such institution continues to make payment of SAIF assessments on the
portion of liabilities attributable to any acquired, assumed or merged SAIF-
insured institution (or, in the case of any acquiring, assuming or resulting
depository institution

<PAGE>

which is a SAIF member, that such institution continues to make payment of
BIF assessments on the portion of liabilities attributable to any acquired,
assumed or merged BIF-insured institution).

There are a number of obligations and restrictions imposed on bank holding
companies and their depository institution subsidiaries by law and regulatory
policy that are designed to minimize potential loss exposure to the depositors
of such depository institutions and to the FDIC insurance funds in the event the
depository institution becomes in danger of defaulting or in default under its
obligations to repay deposits. For example, under current federal law, to
reduce the likelihood of receivership of an insured depository institution
subsidiary, a bank holding company is required to guarantee the compliance of
any insured depository institution subsidiary that may become "undercapitalized"
with the terms of any capital restoration plan filed by such subsidiary with its
appropriate federal banking agency up to the lesser of (i) an amount equal to 5%
of the institution's total assets at the time the institution became
undercapitalized, or (ii) the amount that is necessary (or would have been
necessary) to bring the institution into compliance with all applicable capital
standards as of the time the institution fails to comply with such capital
restoration plan. Under a policy of the Federal Reserve with respect to bank
holding company operations, a bank holding company is required to serve as a
source of financial strength to its subsidiary depository institutions and to
commit resources to support such institutions in circumstances where it might
not do so absent such policy. The Federal Reserve also has the authority under
the BHCA to require a bank holding company to terminate any activity or
relinquish control of a nonbank subsidiary (other than a nonbank subsidiary of a
bank) upon the Federal Reserve's determination that such activity or control
constitutes a serious risk to the financial soundness or stability of any
subsidiary depository institution of the bank holding company. Further, federal
law grants federal bank regulatory authorities additional discretion to require
a bank holding company to divest itself of any bank or nonbank subsidiary if the
agency determines that divestiture may aid the depository institution's
financial condition.

In addition, the "cross-guarantee" provisions of the FDIA require insured
depository institutions under common control to reimburse the FDIC for any loss
suffered by either the SAIF or the BIF as a result of the default of a commonly
controlled insured depository institution or for any assistance provided by the
FDIC to a commonly controlled insured depository institution in danger of
default. The FDIC may decline to enforce the cross-guarantee provisions if it
determines that a waiver is in the best interest of the SAIF or the BIF, or
both. The FDIC's claim for damages is superior to claims of stockholders of the
insured depository institution or its holding company but is subordinate to
claims of depositors, secured creditors and holders of subordinated debt (other
than affiliates) of the commonly controlled insured depository institutions.

Carolina First Corporation is subject to the obligations and restrictions
described above. However, management currently does not expect that any of
these provisions will have any material impact on its operations.

As a bank holding company registered under the South Carolina Bank Holding
Company Act, Carolina First Corporation also is subject to regulation by the
State Board. Consequently, Carolina First Corporation must receive the approval
of the State Board prior to engaging in the acquisitions of banking institutions
or assets. Carolina First Corporation must also file with the State Board
periodic reports with respect to its financial condition and operations,
management, and intercompany relationships between Carolina First Corporation
and its subsidiaries.

Carolina First Bank. Carolina First Bank is an FDIC-insured, South
Carolina-chartered banking corporation and is subject to various statutory
requirements and rules and regulations promulgated and enforced primarily by the
State Board and the FDIC. These statutes, rules and regulations relate to
insurance of deposits, required reserves, allowable investments, loans, mergers,
consolidations, issuance of securities, payment of dividends, establishment of
branches and other aspects of the business of Carolina First Bank. The FDIC has
broad

<PAGE>

authority to prohibit Carolina First Bank from engaging in what it
determines to be unsafe or unsound banking practices. In addition, federal law
imposes a number of restrictions on state-chartered, FDIC-insured banks and
their subsidiaries. These restrictions range from prohibitions against engaging
as a principal in certain activities to the requirement of prior notification of
branch closings. Carolina First Bank also is subject to various other state and
federal laws and regulations, including state usury laws, laws relating to
fiduciaries, consumer credit and equal credit and fair credit reporting laws.
Carolina First Bank is not a member of the Federal Reserve System.

Dividends. The holders of CFC common stock are entitled to receive
dividends when and if declared by the Board of Directors out of funds legally
available therefor. The holders of Carolina First Corporation's outstanding
series of preferred stock are also entitled to receive dividends when, as and if
declared by the Board of Directors in their discretion out of funds legally
available therefor and as set forth in Carolina First Corporation's Articles of
Incorporation. For a description of the dividends to which holders of such
preferred stock are entitled, see "CAROLINA FIRST CORPORATION CAPITAL STOCK."
Carolina First Corporation is a legal entity separate and distinct from its
subsidiaries and depends for its revenues on the payment of dividends from its
subsidiaries. Current federal law would prohibit, except under certain
circumstances and with prior regulatory approval, an insured depository
institution, such as Carolina First Bank, from paying dividends or making any
other capital distribution if, after making the payment or distribution, the
institution would be considered "undercapitalized," as that term is defined in
applicable regulations. In addition, as a South Carolina-chartered bank,
Carolina First Bank is subject to legal limitations on the amount of dividends
it is permitted to pay. In particular, Carolina First Bank must receive the
approval of the South Carolina Commissioner of Banking prior to paying dividends
to Carolina First Corporation.

CAPITAL ADEQUACY

Carolina First Corporation. The Federal Reserve has adopted risk-based
capital guidelines for bank holding companies. Under these guidelines, the
minimum ratio of total capital to risk-weighted assets (including certain off-
balance sheet activities, such as standby letters of credit) is 8%. At least
half of the total capital is required to be "Tier 1 capital," principally
consisting of common stockholders' equity, noncumulative preferred stock, a
limited amount of cumulative perpetual preferred stock, and minority interests
in the equity accounts of consolidated subsidiaries, less certain goodwill
items. The remainder (Tier 2 capital) may consist of a limited amount of
subordinated debt and intermediate-term preferred stock, certain hybrid capital
instruments and other debt securities, perpetual preferred stock, and a limited
amount of the general loan loss allowance. In addition to the risk-based
capital guidelines, the Federal Reserve has adopted a minimum Tier 1 (leverage)
capital ratio under which a bank holding company must maintain a minimum level
of Tier 1 capital (as determined under applicable rules) to average total
consolidated assets of at least 3% in the case of bank holding companies which
have the highest regulatory examination ratios and are not contemplating
significant growth or expansion. All other bank holding companies are required
to maintain a ratio of at least 100 to 200 basis points above the stated
minimum. At September 30, 1994, Carolina First Corporation was in compliance
with both the risk-based capital guidelines and the minimum leverage capital
ratio, with consolidated Tier 1 capital of 8.84% of risk-weighted assets, total
capital of 9.47% of risk-weighted assets and a leverage capital ratio of 6.73%.

Carolina First Bank. As a state-chartered, FDIC-insured institution which
is not a member of the Federal Reserve System, Carolina First Bank is subject to
capital requirements imposed by the FDIC. The FDIC requires state-chartered
nonmember banks to comply with risk-based capital standards substantially
similar to those required by the Federal Reserve, as described above. The FDIC
also requires state-chartered nonmember banks to maintain a minimum leverage
ratio similar to that adopted by the Federal Reserve. Under the FDIC's leverage
capital requirement, state nonmember banks that (a) receive the highest rating
during the examination

<PAGE>

process and (b) are not anticipating or experiencing any significant growth are
required to maintain a minimum leverage ratio of 3% of Tier 1 capital to total
assets; all other banks are required to maintain a minimum ratio of 100 to 200
basis points above the stated minimum, with an absolute minimum leverage ratio
of not less than 4%. At September 30, 1994, Carolina First Bank had Tier 1
capital of 7.91% of risk-weighted assets, total capital of 8.48% of risk-
weighted assets, and a leverage capital ratio of 6.36%.

FEDERAL DEPOSIT INSURANCE CORPORATION IMPROVEMENT ACT OF 1991

The Federal Deposit Insurance Corporation Improvement Act of 1991
("FDICIA") required each federal banking agency to revise its risk-based capital
standards to ensure that those standards take adequate account of interest rate
risk, concentration of credit risk and the risk of nontraditional activities, as
well as reflect the actual performance and expected risk of loss on multifamily
mortgages. The Federal Reserve, the FDIC and the OCC have issued a joint
advance notice of proposed rulemaking, and have issued a revised proposal,
soliciting comments on a proposed framework for implementing these revisions.
Under the proposal, an institution's assets, liabilities, and off-balance sheet
positions would be weighted by risk factors that approximate the instruments'
price sensitivity to a 100 basis point change in interest rates. Institutions
with interest rate risk exposure in excess of a threshold level would be
required to hold additional capital proportional to that risk. The notice also
asked for comments on how the risk-based capital guidelines of each agency may
be revised to take account of concentration and credit risk and the risk of
nontraditional activities. Carolina First Corporation cannot assess at this
point the impact the proposal would have on the capital requirements of Carolina
First Corporation or its subsidiary depository institutions.

INSURANCE

As an FDIC-insured institution, Carolina First Bank is subject to insurance
assessments imposed by the FDIC. Under current law, the insurance assessment to
be paid by FDIC-insured institutions shall be as specified in a schedule
required to be issued by the FDIC that specifies, at semiannual intervals,
target reserve ratios designed to increase the FDIC insurance fund's reserve
ratio to 1.25% of estimated insured deposits (or such higher ratio as the FDIC
may determine in accordance with the statute) in 15 years. Further, the FDIC is
authorized to impose one or more special assessments in any amount deemed
necessary to enable repayment of amounts borrowed by the FDIC from the United
States Department of the Treasury (the "Treasury Department").

Effective January 1, 1993, the FDIC implemented a risk-based assessment
schedule, having assessments ranging from 0.23% to 0.31% of an institution's
average assessment base. The actual assessment to be paid by each FDIC-insured
institution is based on the institution's assessment risk classification, which
is determined based on whether the institution is considered "well capitalized,"
"adequately capitalized" or "undercapitalized," as such terms have been defined
in applicable federal regulations adopted to implement the prompt corrective
action provisions of FDICIA (see "--Certain Regulatory Matters--Other Safety and
Soundness Regulations"), and whether such institution is considered by its
supervisory agency to be financially sound or to have supervisory concerns. As
a result of the current provisions of federal law, the assessment rates on
deposits could increase over the next 15 years over present levels. Based on
the current financial condition and capital levels of Carolina First Bank,
Carolina First Corporation does not expect that the current FDIC risk-based
assessment schedule will have a material adverse effect on Carolina First Bank's
earnings. Carolina First Bank's risk-based insurance assessment currently is set
at 0.26% of its average assessment base.

In connection with the merger of CF Savings Bank into Carolina First Bank
and Carolina First Bank's assumption of other SAIF-insured deposits in
connection with various acquisitions, approximately 28% of

<PAGE>

Carolina First Bank's total deposits are subject to SAIF insurance
assessments imposed by the FDIC. Under current law, the insurance assessment to
be paid by SAIF-insured institutions must be the greater of 0.15% of the
institution's average assessment base (as defined) or such rate as the FDIC, in
its sole discretion, determines to be appropriate to be able to increase (or
maintain) the SAIF reserve ratio to 1.25% of estimated insured deposits (or
such higher ratio as the FDIC may determine in accordance with the statute)
within a reasonable period of time. From January 1, 1994 through December 31,
1997, the assessment rate must not be less than 0.18% of the institution's
average base assessment. In each case, the assessment rate may be higher if the
FDIC, in its sole discretion, determines a higher rate to be appropriate. In
addition, the FDIC has adopted for SAIF assessments the risked based assessment
schedule described above. Carolina First Bank's risk-based insurance
assessment on its SAIF-insured deposits has been set at 0.23% of its average
assessment base.

OTHER SAFETY AND SOUNDNESS REGULATIONS

Prompt Corrective Action. Current law provides the federal banking
agencies with broad powers to take prompt corrective action to resolve problems
of insured depository institutions. The extent of these powers depends upon
whether the institutions in question are "well capitalized, "adequately
capitalized," "undercapitalized," "significantly undercapitalized" or
"critically undercapitalized." Under uniform regulations defining such capital
levels issued by each of the federal banking agencies, a bank is considered
"well capitalized" if it has (i) a total risk-based capital ratio of 10% or
greater, (ii) a Tier 1 risk-based capital ratio of 6% or greater, (iii) a
leverage ratio of 5% or greater, and (iv) is not subject to any order or written
directive to meet and maintain a specific capital level for any capital measure.
An "adequately capitalized" bank is defined as one that has (i) a total risk-
based capital ratio of 8% or greater, (ii) a Tier 1 risk-based capital ratio of
4% or greater, and (iii) a leverage ratio of 4% or greater (or 3% or greater in
the case of a bank with a composite CAMEL rating of 1). A bank is considered
(A) "undercapitalized" if it has (i) a total risk-based capital ratio of less
than 8%, (ii) a Tier 1 risk-based capital ratio of less than 4%, or (iii) a
leverage ratio of less than 4% (or 3% in the case of a bank with a composite
CAMEL rating of 1); (B) "significantly undercapitalized" if the bank has (i) a
total risk-based capital ratio of less than 6%, or (ii) a Tier 1 risk-based
capital ratio of less than 3%, or (iii) a leverage ratio of less than 3%; and
(C) "critically undercapitalized" if the bank has a ratio of tangible equity to
total assets equal to or less than 2%. Carolina First Corporation and Carolina
First Bank each currently meet the definition of adequately capitalized.

Brokered Deposits. Current federal law also regulates the acceptance of
brokered deposits by insured depository institutions to permit only a "well
capitalized" depository institution to accept brokered deposits without
prior regulatory approval. Under FDI Cregulations,"well capitalized"
insured depository institutions may accept brokered deposits without
restriction, "adequately capitalized" insured depository institutions may
accept brokered deposits with a waiver from the FDIC (subject to certain
restrictions on payments of interest rates) while "undercapitalized" insured
depository institutions may not accept brokered deposits. The regulations
provide that the definitions of "well capitalized," "adequately capitalized"
and "undercapitalized" are the same as the definitions adopted by the agencies
to implement the prompt corrective action provisions of FDICIA (as described
in the previous paragraph). Carolina First Corporation does not believe that
these regulations will have a material adverse effect on its current operations.

Other FDICIA Regulations. To facilitate the early identification of
problems, FDICIA required the federal banking agencies to review and, under
certain circumstances, prescribe more stringent accounting and reporting
requirements than those required by generally accepted accounting principles.
The FDIC has issued final regulations implementing those provisions. The rule,
among other things, requires that management report on the institution's
responsibility for preparing financial statements and establishing and
maintaining an internal control structure and procedures for financial reporting
and compliance with designated laws and regulations

<PAGE>

concerning safety and soundness, and that independent auditors attest to and
report separately on assertions in management's reports concerning compliance
with such laws and regulations, using FDIC approved audit procedures.

FDICIA required each of the federal banking agencies to develop regulations
addressing certain safety and soundness standards for insured depository
institutions (such as Carolina First Bank) and depository institution holding
companies (such as Carolina First Corporation), including operational and
managerial standards, asset quality, earnings and stock valuation standards, as
well as compensation standards (but not dollar levels of compensation). Each of
the federal banking agencies has issued a joint notice of proposed rulemaking,
which requested comment on the implementation of these standards. The proposed
rule sets forth general operational and managerial standards in the areas of
internal controls, information systems and internal audit systems, loan
documentation, credit underwriting, interest rate exposure, asset growth and
compensation fees and benefits. The proposed rule also establishes a maximum
ratio of classified assets to capital, and requires institutions to meet minimum
capital standards as a measure of whether such institutions have minimum
earnings sufficient to absorb losses without impairing capital. Finally, the
proposed rule would define compensation as excessive if it is unreasonable or
disproportionate to the services actually performed. Bank holding companies
would not be subject to the standards on compensation. The proposal
contemplates that each federal agency would determine compliance with these
standards through the examination process, and if necessary to correct
weaknesses, require an institution to file a written safety and soundness
compliance plan. Carolina First Corporation has not yet determined the effect
the proposed rule would have on its operations and the operations of its
depository institution subsidiary if it is adopted substantially as proposed.

COMMUNITY REINVESTMENT ACT

Carolina First Bank is subject to the requirements of the CRA. The CRA
requires that financial institutions have an affirmative and ongoing obligation
to meet the credit needs of their local communities, including low-and moderate-
income neighborhoods, consistent with the safe and sound operation of those
institutions. Each financial institution's efforts in meeting community credit
needs are evaluated as part of the examination process pursuant to twelve
assessment factors. These factors also are considered in evaluating mergers,
acquisitions and applications to open a branch or facility. Carolina First Bank
received an outstanding rating in its most recent evaluation.

As a result of a Presidential initiative, each of the federal banking
agencies has issued a notice of proposed rulemaking that would replace the
current CRA assessment system with a new evaluation system that would rate
institutions based on their actual performance (rather than efforts) in meeting
community credit needs. Under the proposal, each institution would be evaluated
based on the degree to which it is providing loans (the lending test), branches
and other services (the service test) and investments to low- and moderate-
income areas (the investment test). Under the lending test, as proposed, an
institution would be evaluated on the basis of its market share of reportable
loans in low- and moderate-income areas in comparison to other lenders subject
to CRA in its service area, and in comparison with the institution's market
share of reportable loans in other service areas. An institution would be
evaluated under the investment test based on the amount of investments made that
have had a demonstrable impact on low- and moderate-income areas or persons as
compared to its risk-based capital. The service test would evaluate a retail
institution primarily based on the percentage of its branches located in, or
that are readily accessible to, low- and moderate-income areas. Each depository
institution would have to report to its federal supervisory agency and make
available to the public data on the geographic distribution of its loan
applications, denials, originations and purchases. Small institutions could
elect to be evaluated under a streamlined method that would not require them to
report this data. All institutions, however, would receive one of five ratings
based on their performance: Outstanding, High

<PAGE>

Satisfactory, Low Satisfactory, Needs to Improve or Substantial Noncompliance.
An institution that received a rating of Substantial Noncompliance would be
subject to enforcement action. Carolina First Corporation currently is
studying the proposal and determining whether the regulation, if adopted, would
require changes to Carolina First Bank's CRA action plans.

TRANSACTIONS BETWEEN CAROLINA FIRST CORPORATION, ITS SUBSIDIARIES AND
AFFILIATES

Carolina First Corporation's subsidiaries are subject to certain
restrictions on extensions of credit to executive officers, directors, principal
stockholders or any related interest of such persons. Extensions of credit (i)
must be made on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable transactions with
unaffiliated persons; and (ii) must not involve more than the normal risk of
repayment or present other unfavorable features. Aggregate limitations on
extensions of credit also may apply. Carolina First Corporation's subsidiaries
also are subject to certain lending limits and restrictions on overdrafts to
such persons.

Subsidiary banks of a bank holding company are subject to certain
restrictions imposed by the Federal Reserve Act on extensions of credit to the
bank holding company or its nonbank subsidiary, on investments in their
securities and on the use of their securities as collateral for loans to any
borrower. Such restrictions may limit Carolina First Corporation's ability to
obtain funds from its bank subsidiary for its cash needs, including funds for
acquisitions, interest and operating expenses.

In addition, under the BHCA and certain regulations of the Federal Reserve,
a bank holding company and its subsidiaries are prohibited from engaging in
certain tie-in arrangements in connection with any extension of credit, lease or
sale of property or furnishing of services. For example, a subsidiary may not
generally require a customer to obtain other services from any other subsidiary
or Carolina First Corporation, and may not require the customer to promise not
to obtain other services from a competitor, as a condition to an extension of
credit to the customer.

INTERSTATE BANKING

In 1986, South Carolina adopted legislation which permitted banks and bank
holding companies in certain southern states to acquire banks in South Carolina
to the extent that such other states had reciprocal legislation which was
applicable to South Carolina banks and bank holding companies. The legislation
resulted in a number of South Carolina banks being acquired by large out-of-
state bank holding companies. Size gives the larger banks certain advantages in
competing for business from large corporations. These advantages include higher
lending limits and the ability to offer services in other areas of South
Carolina and the region. As a result, Carolina First Corporation does not
generally attempt to compete for the banking relationships of large
corporations, but concentrates its efforts on small to medium-sized businesses
and on individuals. Carolina First Corporation believes it has competed
effectively in this market segment by offering quality, personal service.

In July 1994, South Carolina enacted legislation which effectively provides
that, after June 30, 1996, out-of-state bank holding companies (including bank
holding companies in the Southern Region, as defined under the statute) may
acquire other banks or bank holding companies having offices in South Carolina
upon the approval of the South Carolina State Board of Financial Institutions
and assuming compliance with certain other conditions, including that the effect
of the transaction not lessen competition and that the laws of the state in
which the out-of-state bank holding company filing the applications has its
principal place of business permit South Carolina bank holding companies to
acquire banks and bank holding companies in that state. Although

<PAGE>

such legislation may increase takeover activity in South Carolina, Carolina
First Corporation does not believe that such legislation will have a material
impact on its competitive position. However, no assurance of such fact may be
given.

Congress recently enacted the Riegle-Neal Interstate Banking and Branching
Efficiency Act of 1994, which will increase the ability of bank holding
companies and banks to operate across state lines. Under the Riegle-Neal
Interstate Banking and Branching Efficiency Act of 1994, the existing
restrictions on interstate acquisitions of banks by bank holding companies will
be repealed one year following enactment, such that Carolina First Corporation
and any other bank holding company located in South Carolina would be able to
acquire a bank located in any other state, and a bank holding company located
outside South Carolina could acquire any South Carolina-based bank, in either
case subject to certain deposit percentage and other restrictions. The
legislation also provides that, unless an individual state elects beforehand
either (i) to accelerate the effective date or (ii) to prohibit out-of-state
banks from operating interstate branches within its territory, on or after June
1, 1997, adequately capitalized and managed bank holding companies will be able
to consolidate their multistate bank operations into a single bank subsidiary
and to branch interstate through acquisitions. De novo branching by an out-of-
state bank would be permitted only if it is expressly permitted by the laws of
the host state. The authority of a bank to establish and operate branches
within a state will continue to be subject to applicable state branching laws.
Carolina First Corporation believes that this legislation may result in
increased takeover activity of South Carolina financial institutions by out-of-
state financial institutions. However, Carolina First Corporation does not
presently anticipate that such legislation will have a material impact on its
operations or future plans.

CHANGE IN BANK CONTROL

The BHCA and the Change in Bank Control Act, together with regulations
promulgated by the Federal Reserve, require that, depending on the particular
circumstances, either Federal Reserve approval must be obtained or notice must
be furnished to the Federal Reserve and not disapproved prior to any person or
company acquiring control of a bank holding company, such as Carolina First
Corporation, subject to certain exemptions for certain transactions. Control is
conclusively presumed to exist if an individual or company acquires 25% or more
of any class of voting securities of the bank holding company. Control is
rebuttably presumed to exist if a person acquires 10% or more but less than 25%
of any class of voting securities and either the company has registered
securities under Section 12 of the Exchange Act (which Carolina First
Corporation has done with respect to the Common Stock) or no other person will
own a greater percentage of that class of voting securities immediately after
the transaction. The regulations provide a procedure for challenge of the
rebuttable control presumption.

Approval of Senior Officers. Banks and their holding companies which have
undergone a change in control within the past two years or which have been
deemed by their primary federal bank regulator to be troubled institutions must
give their primary federal bank regulator or the Federal Reserve, respectively,
30 days prior notice of the appointment of any senior executive officer or
director. Within the 30 day period, their primary federal bank regulator or the
Federal Reserve, as the case may be, may approve or disapprove any such
appointment. Neither Carolina First Corporation nor Carolina First Bank
currently meet the criteria which trigger this additional approval.

<PAGE>

OTHER REGULATIONS

Interest and certain other charges collected or contracted for by Carolina
First Bank and Carolina First Mortgage Company are subject to state usury laws
and certain federal laws concerning interest rates. Carolina First Bank's and
Carolina First Mortgage Company's loan operations are also subject to certain
federal laws applicable to credit transactions, such as the federal Truth-In-
Lending Act governing disclosures of credit terms to consumer borrowers, CRA
requiring financial institutions to meet their obligations to provide for the
total credit needs of the communities they serve, including investing their
assets in loans to low- and moderate-income borrowers, the Home Mortgage
Disclosure Act of 1975 requiring financial institutions to provide information
to enable the public and public officials to determine whether a financial
institution is fulfilling its obligation to help meet the housing needs of the
community it serves, the Equal Credit Opportunity Act prohibiting discrimination
on the basis of race, creed or other prohibited factors in extending credit, the
Fair Credit Reporting Act of 1978 governing the use and provision of information
to credit reporting agencies, the Fair Debt Collection Act governing the manner
in which consumer debts may be collected by collection agencies, and the rules
and regulations of the various federal agencies charged with the responsibility
of implementing such federal laws. The deposit operations of Carolina First Bank
also are subject to the Right to Financial Privacy Act, which imposes a duty to
maintain confidentiality of consumer financial records and prescribes procedures
for complying with administrative subpoenas of financial records, and the
Electronic Funds Transfer Act and Regulation E issued by the Federal Reserve to
implement that act, which govern automatic deposits to and withdrawals from
deposit accounts and customers' rights and liabilities arising from the use of
automated teller machines and other electronic banking services.

<PAGE>

INFORMATION ABOUT ACNB
GENERAL

ACNB is a national bank which was chartered in 1987. ACNB operates from
its main office at 142 Chesterfield Street, S.E., and a branch office at 2040
Whiskey Road in Aiken, South Carolina. ACNB's primary market area is comprised
of the City of Aiken and the immediately surrounding area. Its broader market
includes all of Aiken County and, to a limited extent, the surrounding counties.

ACNB offers a full range of commercial banking services. Deposit services
include business and personal checking accounts, NOW accounts, savings accounts,
money market accounts, various term certificates of deposit, IRA accounts,
Christmas Club accounts and other deposit services. All deposits are insured up
to applicable limits by the FDIC. Most of ACNB's deposit customers are
individuals and small businesses.

ACNB offers secured and unsecured, short- to intermediate-term loans, with
floating and fixed interest rates for commercial and consumer purposes.
Consumer loans include car loans, boat loans, mobile home loans, home equity
improvement loans (secured by first and second mortgages), personal expenditure
loans, and education loans. Commercial loans include short term unsecured
loans, short and intermediate term real estate mortgage loans, loans secured by
listed stocks, and loans secured by equipment, inventory and accounts
receivable. ACNB's loans are not concentrated within a single industry or group
of related industries.

Other services offered by ACNB include safe deposit boxes, night depository
service, VISA and Master Card credit cards (through a correspondent bank),
discount brokerage services, and twenty-four hour automated teller service.

ACNB began its operations in 1987 and, accordingly, has a limited history.
Based on its experience to date, management has had no indication that a
significant portion of ACNB's business is seasonal.

At September 30, 1994, ACNB employed 30 persons full-time, including 2
principal officers, and 3 part-time employees. Management of ACNB believes that
its employee relations are good.

COMPETITION

The market for financial institutions in the Aiken area is highly
competitive, both with respect to generating deposits and with respect to making
commercial, mortgage and consumer loans. Banks generally compete with other
financial institutions through the banking products and services offered, the
pricing of services, the level of service provided, the convenience and
availability of services, and the degree of expertise and personal concern with
which services are offered. ACNB encounters strong competition from most of the
financial institutions in ACNB's market area. In the conduct of certain aspects
of its banking business, ACNB also competes with credit unions, consumer finance
companies, insurance companies, money market mutual funds and other financial
institutions, some of which are not subject to the same degree of regulation and
restriction imposed upon ACNB. Many of ACNB's competitors have substantially
greater resources and lending limits than ACNB and offer certain services, such
as international banking services and trust services, that ACNB does not
provide. Moreover, most of these competitors have numerous branch offices
located throughout the market area, a competitive advantage that ACNB does not
have. ACNB has attempted to compensate for its smaller size by offering more
personalized service than many of its competitors.

<PAGE>

At December 31, 1994, there were a total of six FDIC-insured banking
institutions in the City of Aiken and the immediately surrounding area
(including ACNB). At such date, these institutions operated through an
aggregate of 16 banking locations.

CONSENT AGREEMENT WITH THE OCC

As a result of deficiencies found by the OCC in its March 10, 1992 Report
of Examination of ACNB, in April, 1992, ACNB entered into a written consent
agreement with the OCC within the meaning of 12 U.S.C. (Section Mark)
1818(e)(1) and (i)(2) (the "OCC Consent Agreement"). These deficiencies
principally related to problems with credit quality and loan documentation, the
absence of credit procedures, the need for capable lending personnel and other
problems related to management.

Pursuant to the OCC Consent Agreement, ACNB was required to make certain
changes in management, obtain a management study, improve its loan
administration and review policies and procedures, provide for ongoing review
and elimination of problem assets, provide for ongoing review and maintenance of
adequate loan loss allowances, increase its regulatory capital levels, develop a
three-year capital program, amend and refile certain reports of condition with
the FDIC, and correct certain violations of law cited in OCC examination
reports. ACNB's Board of Directors was also required to establish a compliance
committee comprised of at least five directors who were not officers of ACNB to
monitor ACNB's compliance with the OCC Consent Agreement and to submit periodic
reports thereon to the Board of Directors to be forwarded to the OCC.

Efforts to comply with the requirements of the OCC Consent Agreement are
ongoing. Such efforts are not only expensive to ACNB, but also require the
expenditure of significant amounts of time by ACNB's senior management and Board
of Directors. To date, the Board of Directors has taken the following actions,
among others, to comply with the requirements of the OCC Consent Agreement:

1. The Board has appointed a compliance committee comprised of five
directors who are not officers of ACNB. The compliance committee monitors
ACNB's efforts pursuant to the OCC Consent Agreement and provides monthly
written progress reports to the Board of Directors, which the Board then
submits with its comments to the OCC.

2. The Board has obtained a written report from an independent outside
management consultant relating to the adequacy of staffing for current levels
of operations and qualifications of such staff to perform assigned duties.
After receiving the report, the compliance committee prepared and submitted to
the OCC a plan of implementation. Efforts to comply with such plan are
ongoing.

3. The Board has developed a written program to improve ACNB's loan
administration in the areas of (a) procedures to ensure satisfactory and
perfected collateral documentation; (b) procedures to ensure renewals or
extensions of credit are subject to analysis of current, satisfactory credit
information; (c) procedures to ensure accuracy of internal management
information systems; and (d) procedures to ensure reasonable repayment terms
that relate directly to the source of repayment. Efforts to implement this
program are ongoing.

4. The Board has established an independent loan review system to
periodically review ACNB's loan portfolio to assure timely identification and
categorization of problem credits. The review must be conducted at least
semiannually and a report must be filed with the Board after each review. The
OCC has been critical of the system established by the Board and the Board's
efforts to satisfy the OCC are continuing.

<PAGE>

5. The Board has revised ACNB's written policy setting forth criteria under
which renewals of extensions of credit may be approved.

6. The Board has adopted a written program designed to eliminate the basis
of criticism of assets criticized in the OCC's Report of Examination as
"doubtful," "substandard," or "other assets especially mentioned." Although the
program is structured according to the requirements of the OCC Consent
Agreement, implementation has been problematic because of the unavailability of,
or the difficulty in obtaining from borrowers, the required information. The
Board of Directors is required to review certain aspects of this program on a
monthly basis. A copy of each review must be forwarded to the OCC. Compliance
with this program has been a continuing source of criticism by the OCC.

7. The Board has adopted written policies and procedures governing the
supervision and control of nonaccrual loans and for auditing accrued interest on
loans.

8. The Board has reviewed the adequacy of ACNB's Allowance for Loan and
Lease Losses and has established a program for the maintenance of an adequate
Allowance. The program requires quarterly review of the Allowance by the Board
and maintenance of written documentation indicating the factors considered and
conclusions reached by the Board in determining the adequacy of the Allowance.

9. ACNB maintains capital levels not less than the minimums required by
the OCC Consent Agreement.

10. The Board has developed a three year capital program which includes
(a) specific plans for maintenance of adequate capital; (b) projections for
growth and capital requirements based on a detailed analysis of ACNB's assets,
liabilities, earnings, fixed assets, and off-balance sheet activities; (c)
projections of the sources and timing of additional capital to meet current and
future needs; and (d) a dividend policy that permits declaration of a dividend
only when ACNB is in compliance with the capital program, and with the written
approval of the OCC. The capital program required approval of the OCC and such
approval has been granted. The Board is required to review and update the
program at least annually, or more frequently if necessary, and to submit copies
of its reviews to the OCC.

11. The Board has caused ACNB to file amended Reports of Condition and
Income for the periods ended June 30, 1991 and September 30, 1991 and has
adopted policies and procedures to cause such reports to comply with OCC
guidelines.

The OCC Consent Agreement also required the Board to employ a senior loan
administrator with skills and experience necessary to ensure effective
supervision and administration of ACNB's lending activities. The Board has not
employed such a senior loan administrator, and if the Merger is consummated, it
will not be necessary for ACNB to employ such a person. If, however, the
Merger is not consummated, ACNB will be required to employ a senior loan
administrator, and the cost to ACNB of employing such a person would be
expected to be significant.

The OCC Consent Agreement also requires ACNB to take all steps necessary to
correct each violation of law, rule or regulation cited in any Report of
Examination and to notify the OCC of the steps taken in this regard. The Board
is also required to adopt and implement specific procedures to prevent future
violations of law and to implement procedures relating to compliance and
internal control systems. Although such procedures have been adopted and
efforts at compliance are ongoing, because of the complexity and volume of
applicable laws and regulations, ACNB has had difficulty implementing the
procedures. Furthermore, in some instances, correction of past violations of
law may be extremely difficult, if not impossible. Accordingly, ACNB's
compliance with the requirements of this portion of the OCC Consent Agreement
has been a source of continuing criticism by the OCC.

<PAGE>

Although the Board has worked, and continues to work, diligently and in good
faith to comply with the requirements of the OCC Consent Agreement, and has made
substantial progress toward compliance, the OCC may continue to criticize
certain aspects of the compliance effort. If the Board is unable to satisfy the
OCC with its compliance efforts, the OCC may decide to take further enforcement
action against ACNB. The Board believes that, with continued diligence, it
should be able to satisfy the OCC that it has substantially complied with the
requirements of the OCC Consent Agreement, but there can be no assurance to that
effect, and there can be no assurance as to how long it would take to achieve
such result. While ACNB remains subject to the OCC Consent Agreement, it
continues to incur substantial expenses for compliance, which necessarily have
an adverse impact on net income. Furthermore, compliance efforts, particularly
the review and reporting requirements, consume a significant amount of the
Board's and management's time and tend to distract them from everyday efforts to
operate ACNB and increase earnings.

DIVIDENDS

As a national bank, ACNB's ability to pay dividends is restricted by
federal banking law and the regulations of the OCC. See "-- Supervision and
Regulation of ACNB -- Payment of Dividends." ACNB has never paid dividends.
Furthermore, ACNB is presently a party to the OCC Consent Agreement, which
permits ACNB to pay dividends only if it is in compliance with its approved
capital program under such agreement and has obtained the prior written approval
of the OCC. See " --Consent Agreement with the OCC."

MARKET PRICE OF ACNB COMMON STOCK AND RELATED ACNB STOCKHOLDER MATTERS

For information regarding the stock ownership of certain persons, including
directors and executive officers of ACNB (both before and after the Merger), see
"MANAGEMENT INFORMATION -- Management and Principal Shareholders of ACNB."

RECENT DEVELOPMENTS

ACNB took the following actions in the fourth quarter of 1994:

INVESTMENT SECURITIES PORTFOLIO. In December 1994, the ACNB Board of
Directors approved the sale of three U.S. Government Agency securities at a
loss of approximately $159,000. Proceeds from these sales will be reinvested in
loans or investment securities with yields at higher current market rates.

NONPERFORMING LOANS; OTHER PROBLEM ASSETS. In the fourth quarter of 1994,
the reserve for other real estate was increased $221,000 to a balance at
December 31, 1994 of $236,000, or 20% of the carrying value of other real
estate. This adjusted reserve balance more fully covers potential losses which
may occur upon the liquidation of other real estate based upon ongoing efforts
to sell such properties.

<PAGE>

ALLOWANCE FOR LOAN LOSSES. Based upon its assessment of total nonperforming
loans, ACNB charged-off approximately $240,000 of such loans in December 1994.
These charge-offs, combined with the additional provision for loan losses in
the fourth quarter of 1994, will provide an allowance for loan losses to gross
loans of approximately 1.35% at December 31, 1994, compared to 1.98% at
December 31, 1993.

MISCELLANEOUS RESERVES. In anticipation of the Merger, ACNB charged
approximately $50,000 to earnings related to post-employment benefits to a
former senior officer of ACNB. ACNB also charged approximately $25,000 to
earnings related to the estimated residual value of certain computer hardware
and software.

The combined effect of the above charges to earnings in the fourth quarter
will create a loss for the year ended December 31, 1994 of $306,000.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

The following information should be read in conjunction with the financial
statements of ACNB, the accompanying footnotes and supplemental financial data
contained herein.

Total assets decreased $1,335,000, or 3%, from December 31, 1992 to
December 31, 1993. From December 31, 1993 to September 30, 1994, total assets
decreased $913,000, or 2%, to $43,039,000 at September 30, 1994. The decrease
resulted generally from the continuation of the strategy to reduce the level of
higher-cost funds (particularly CD's) and thereby increase the net interest
margin.

Loans, net of unearned discounts, are ACNB's largest single category of
assets. From December 31, 1992 to December 31, 1993, total loans, net of
unearned discounts, decreased $1,215,000, or 4.1%. This decrease resulted
primarily from the more stringent lending standards implemented pursuant to the
OCC Consent Agreement. See " -- Consent Agreement with the OCC." From December,
31, 1993 to September 30, 1994, ACNB's total loans increased $1,217,000, or
4.23% to $29,996,000 at September 30, 1994. The increase in loans was
attributable to the addition of two new loan officers with experience in ACNB's
market.

Total investment securities increased $1,656,000, or 31%, from December 31,
1992 to December 31, 1993. The increase in the investment portfolio was funded
largely through the investment of excess cash, as cash and due from banks and
federal funds sold decreased by $1,693,000, or 26.7%, from December 31, 1992 to
December 31, 1993. Total investment securities decreased $1,356,000, or 19.37%,
from December 31, 1993 to September 30, 1994. As investment securities matured
or were sold, the proceeds were reinvested in loans.

Total liabilities decreased $1,448,000, or 3.5%, from December 31, 1992 to
December 31, 1993, largely as a result of a $1,339,000 decrease in total
deposits. Time deposits of $100,000 or more, comprised primarily of
certificates of deposits and which represented 6.9% of total deposits at
December 31, 1993, increased $102,000, or 3.84%, from December 31, 1992 to
$2,762,000 at December 31, 1993. The decrease in total deposits was
attributable primarily to ACNB's determination to lower deposit rates, in
relation to its competition, in order to lower its cost of funds and increase
its net interest margin. Total liabilities decreased $1,019,000 or 2.53%, from
December 31, 1993 to September 30, 1994, largely as a result of a $1,046,000
decrease in deposits. This decrease in deposits was attributable primarily to
the continuation of relatively lower deposit rates, which were designed to
increase ACNB's net interest margin.

Shareholders' equity increased $112,000, or 3.1%, from December 31, 1992 to
$3,701,000 at December 31, 1993. Shareholders' equity increased $107,000, or
2.89%, from December 31, 1993 to $3,808,000 at September 30, 1994. These
increases resulted from positive earnings for the periods.

<PAGE>

RESULTS OF OPERATIONS

RESULTS OF OPERATIONS SEPTEMBER 30, 1993 COMPARED WITH SEPTEMBER 30, 1994
AND CHANGES IN FINANCIAL POSITION FROM DECEMBER 31, 1993 TO SEPTEMBER 30, 1994

ACNB's net income increased $66,000 to $156,000, or $.38 per share, for the
nine months ended September 30, 1994, compared with $90,000, or $.22 per share,
for the nine months ended September 30, 1993. The primary reason for this
increase was a continuing increase in net interest income brought about by a
reduction in ACNB's cost of funds.

Net interest income for the nine months ended September 30, 1994 increased
$167,000, or 13.6%, to $1,398,000 compared to the same nine month period in
1993. The increase in net interest income was attributable primarily to the
continued decline in rates paid on interest bearing liabilities and changes in
the volume of interest earning assets and interest bearing liabilities.

Average earning assets for the nine month period ending September 30, 1994
decreased $1,046,000, or 2.56% to $39,759,000 when compared to the averages for
the period ending December 31, 1993. Average loans remained relatively
unchanged while average investment securities decreased $160,000, or 2.55% to
$6,107,000 and average federal funds sold decreased $1,049,000 or 22.29% from
the year-ended 1993 to $3,670,000. The yield on average earning assets and on
average loan balances increased over 1993 approximately 0.17% to 7.73% and 0.14%
to 8.67%, respectively.

Total interest bearing deposits decreased $1,661,000, or 4.52% from
December 31, 1993 to $35,113,000 at September 30, 1994. Interest bearing
transaction accounts for the same period increased $454,000, or 6.29%, to
$7,673,000, while money market accounts decreased $1,410,000, or 19.2%, to
$5,942,000, and other time deposits decreased $1,646,000, or 10.2%, to
$14,478,000. The net decrease in interest bearing deposits coupled with the
continued increasing rate environment resulted in a 0.51% decrease in the cost
of interest bearing deposits to 3.33%.

Interest income for the nine month period ending September 30, 1994
decreased $58,000 to $2,296,000 when compared to the nine month period ending
September 30, 1993. Total interest expense, for the same period, decreased
$225,000, or 20%, to $898,000. This resulted in a $167,000 increase in net
interest income.

Other income increased $63,000, or 42%, to $213,000 for the nine months
ended September 30, 1994, while non-interest expense increased $116,000, or
9.4%, to $1,354,000 for the 1994 period. The increase in non-interest income
was attributable primarily to increases in fees associated with deposit
accounts. The increase in non-interest expense was attributable primarily to
increases in attorney and professional fees associated with problem loans.

1993 COMPARED WITH 1992

ACNB's net income for the year ended December 31, 1993 increased $246,000
to $112,000, or $.28 per share, compared with a loss of $134,000 in 1992, or
($.33) per share. The increase in 1993 net income was attributable primarily to
a $323,000 decrease in the provision for loan losses. As a result of improving
loan quality and reduced levels of expected loss, management decreased the
provision for loan losses from $375,000 in 1992 to $52,000 in 1993. This
resulted in a slight reduction in the allowance for loan losses at December 31,
1993.

Net interest income, the major component of ACNB's income, increased
$80,000, or 5.16%, from $1,550,000 in 1992 to $1,630,000 in 1993. The
increase in net interest income resulted primarily from a continued
decline in market interest rates and changes in the volume of interest
earning assets and interest bearing liabilities, which resulted in an
improved net interest margin.

<PAGE>

Average earning assets decreased $212,000, or 0.52%, from $41,017,000 in
1992 to $40,805,000 in 1993. Although average balances on investment securities
increased $1,229,000, or 24.39%, to $6,267,000, and average federal funds sold
increased $2,381,000, or 100.2%, to $4,719,000, over the 1992 amounts, interest
income on these categories of earning assets decreased as a result of a
reduction in the yield on such investments precipitated by the declining market
interest rate environment. In addition, average loans decreased $3,732,000, or
11.1%, from $33,551,000 in 1992 to $29,819,000 in 1993. The reduction in loans
was primarily the result of more stringent lending standards instituted to
improve the credit quality of the loan portfolio. As a result of the changes in
earning assets and the declining rate environment, the yield on earning assets
decreased from 8.60% in 1992 to 7.56% in 1993.

Total interest bearing deposits decreased $1,151,000, or 3.03%, from
$37,925,000 in 1992 to $36,774,000 in 1993. Interest bearing transaction
accounts increased $1,213,000, or 18.38%, to $7,813,000 and money market
accounts increased $267,000, or 4.3%, to $6,472,000, while other time deposits
decreased $3,535,000, or 19.88%, to $14,246,000. The net decrease in interest
bearing deposits, coupled with the declining rate environment, resulted in a
25.4% decrease in the cost of interest bearing deposits. Total interest paid on
interest bearing deposits decreased $542,000, or 27.39%, from $1,979,000 in 1992
to $1,437,000 in 1993.

Other income, comprised primarily of fees and service charges, decreased
$24,000 from $235,000 in 1992 to $211,000 in 1993. Other expense increased
$133,000 from $1,543,000 to $1,677,000 in 1993. Of this amount, approximately
$60,000 was due to increases in salaries and employee benefits caused by changes
in ACNB's senior management dictated by the OCC. The remaining increase in non-
interest expense resulted primarily from payment of $45,000 in consulting fees
incurred in connection with the OCC-mandated review of ACNB's operations,
increased charges related to other real estate owned, and increases in general
expenses.

As a result of net operating loss carryforwards, ACNB was not required to
pay income taxes in 1993.

1992 COMPARED WITH 1991

ACNB's net income for the year ended December 31, 1992 decreased $192,000,
to a loss of $134,000, or ($.33) per share, compared with a profit of $59,000,
or $.15 per share, for 1991. The decrease in 1992 net income was attributable
primarily to decreases in income on earning assets resulting from declining
market interest rates and increases to the provision for loan losses.

Although average earning assets increased $2,443,000, or 6.33%, to
$41,017,000 during 1992, declining market interest rates during 1992 caused the
yield on average total earning assets to decrease to 8.60% from the 9.64% for
1991. As a result, income on average earning assets decreased $191,000 from the
1991 level to $3,528,000 during 1992.

Total interest bearing deposits decreased from $39,197,000 in 1991 to
$37,925,000 during 1992. Interest expense decreased $312,000 from $2,291,000 in
1991 to $1,979,000 in 1992. The decrease in interest expense was attributable
to the repricing of liabilities, which caused the rate paid on interest bearing
liabilities to decline from 6.84% in 1991 to 5.17% for 1992. As a result of
these decreases in the rates paid by ACNB in 1992, net interest income increased
$121,000 from $1,429,000 in 1992 to $1,550,000 in 1992.

Continuing loan problems during 1992 caused ACNB to increase the provision
for loan losses by $110,000 from $264,000 in 1991 to $374,000 in 1992. See " --
Loan Portfolio".

Other income, comprised primarily of fees and service charges, increased
$48,000 from $187,000 in 1991 to $235,000. Other expenses increased $262,000,
or 20.4%, from $1,282,000 in 1991 to $1,544,000 in 1992. This increase in other
expenses was attributable primarily to an increase of $82,000, or 13.9%, in

<PAGE>

salaries and employee benefits, and a significant increase of $90,000 in legal
and professional fees. These increases were associated with efforts to resolve
problem loans during 1992.

NET INTEREST INCOME

Net interest income is the amount of interest earned on interest earning
assets (loans, investment securities, time deposits in other banks and federal
funds sold), less the interest expense incurred on interest bearing liabilities
(interest bearing deposits and short-term borrowings), and is the principal
source of ACNB's earnings. Net interest income is affected by the level of
interest rates, volume and mix of interest earning assets and interest bearing
liabilities and the relative funding of these assets.

The "Comparative Average Balances, Yields and Rates" table below provides a
detailed analysis of the effective yields and rates on the various categories of
interest earning assets and interest bearing liabilities for the years ended
December 31, 1991, 1992 and 1993.

COMPARATIVE AVERAGE BALANCES - YIELDS AND COSTS
(dollars in thousands)

Years ended December 31,
1991 1992 1993
Average Income/ Yield/ Average Income/ Yield/ Average Income/ Yield/
Balance Expense Rate Balance Expense Rate Balance Expense Rate
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Earning assets
Loans (net of unearned income)(1) $31,852 $3,200 10.05% $33,551 $3,023 9.01% $29,819 $2,526 8.47%
Investment securities (taxable)(2) 4,548 393 8.64 5,038 366 7.26 6,267 399 6.37
Investment securities (nontaxable)
Federal funds sold 1,994 111 5.57 2,338 83 3.55 4,719 143 3.03
Interest bearing deposits with other banks 180 15 8.83 90 5 5.56
Total earning assets 38,574 3,719 9.64% 41,017 3,477 8.48% 40,805 3,068 7.52%
Non-earning assets 1,612 3,936 3,664
Total assets $40,186 $44,953 $44,469

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Interest-bearing liabilities
Interest-bearing deposits
Interest checking $ 4,398 $ 230 5.23% $ 6,126 $ 236 3.85% $ 7,219 193 2.67%
Savings 1,652 90 5.45 2,964 122 4.12 3,499 114 3.26
Money market 3,388 204 6.02 4,773 202 4.23 7,352 233 3.17
Certificates of deposit>$100,000 2,914 170 5.83 3,805 183 4.81 3,204 110 3.43

59
<PAGE>
Other 21,122 1,596 7.56 20,194 1,236 6.12 16,124 787 4.88
Total interest-bearing deposits 33,474 2,290 6.84 37,862 1,979 5.23 37,398 1,437 3.84

Total interest-bearing liabilities 33,474 2,290 6.84 37,862 1,979 5.23 37,398 1,437 3.84
Non-interest bearing liabilities
Non-interest bearing deposits 2,418 2,950 3,186
Other non-interest bearing liabilities 505 366 265
Total liabilities 36,397 41,178 40,849
Stockholders' equity 3,789 3,775 3,620
Total liabilities and stock-
holders' equity $40,186 $44,953 $44,469

Net interest income and net yield
on earning assets (3) $1,429 3.70% $1,498 3.65% $1,631 4.00%
Interest rate spread(4) 2.80% 3.25% 3.72%

</TABLE>

(1) Includes non-accrual loans.
(2) Fully tax-equivalent basis at 34% tax rate.
(3) Net interest income divided by total average interest earning assets.
(4) Total interest earning assets yield minus total interest bearing
liabilities rate.

<PAGE>

The "Analysis of Changes in Net Interest Income" table below provides a
summary of changes in net interest income resulting from changes in volumes of
interest earning assets and interest bearing liabilities, and the rates earned
and paid on such assets and liabilities for the years ended December 31, 1993,
1992 and 1991.

ANALYSIS OF CHANGES IN NET INTEREST INCOME
(dollars in thousands)

1991 compared to 1992 1992 compared to 1993
Amount Amount Amount Amount
Caused Caused Caused Caused
By By By By
Total Change in Change in Total Change in Change in
Change Volume(1) Rate(1) Change Volume(1) Rate(1)

<S> <C> <C> <C> <C> <C> <C>
EARNINGS ASSETS
Loans (net of unearned income)(2) $ (177) $ 172 $ (349) $ (496) $ (336) $ (143)
Investment securities (taxable) 24 42 (18) 33 102 (120)
Investment securities (nontaxable)(3) -- -- -- -- -- --
Federal funds sold and interest-bearing
deposits with other banks (13) (11) (45) (3) (81) (26)
Total interest income (191) 225 (416) (460) (153) (289)

INTEREST-BEARING LIABILITIES
Interest-bearing deposits
Interest-bearing checking 6 90 (84) (43) 42 (85)
Savings 32 71 (39) (8) 22 (30)
Money market (2) 83 (85) 31 109 (78)
Certificates of deposit 13 52 (39) (73) (29) (44)
Other (383) (70) (313) (426) (245) (181)
Total interest-bearing deposits (334) 226 (560) (541) (101) (418)
Total interest expense 143 (1) 144 81 (52) 129
</TABLE>

(1) The rate/volume variance for each category has been allocated on a
consistent basis between rate and volume variances based on the
percentage of rate or volume variance to the sum of the two absolute
variances.
(2) Non-accruing loans have been included.
(3) Investment Securities (nontaxable) are included in taxable
figures for September 1993 and September 1994 for comparative
purposes.Income is included on a fully tax-equivalent basis at 34%.

LIQUIDITY AND INTEREST RATE SENSITIVITY

Interest rate sensitivity management is concerned with the timing and
magnitude of repricing assets compared to liabilities and is an important part
of asset/liability management. It is the objective of interest rate sensitivity
management to generate stable growth in net interest income, and to control the
risks associated with interest rate movement. Management constantly reviews
interest rate risk exposure and the expected interest rate environment so that
adjustments in interest rate sensitivity can be timely made. When interest
sensitive assets exceed interest sensitive liabilities for a specific repricing
"horizon", a positive interest sensitivity gap results. The gap is negative when
interest sensitive liabilities exceed interest sensitive assets. For a bank
with a negative gap, falling interest rates would be expected to have a positive
effect on net interest income and rising

<PAGE>

rates would be expected to have the opposite effect. At December 31, 1993,
approximately 51.75% of ACNB's interest earning assets repriced within one
year compared to approximately 91.45% of interest bearing liabilities,
resulting in a negative gap position.

The table below reflects the balances, at December 31, 1993, of interest
earning assets and interest bearing liabilities at the earlier of their
repricing or maturity dates. Scheduled payment amounts of amortizing fixed rate
loans are reflected at each scheduled payment date. Variable rate amortizing
loans reflect scheduled payments at each scheduled payment date until the loan
may be repriced contractually; the unamortized balance is reflected at that
point. Deposits in other banks and debt securities are reflected in each
instrument's ultimate maturity date. Overnight federal funds sold are reflected
in the earliest repricing interval due to the immediately available nature of
these funds. Interest bearing liabilities with no contractual maturity, such as
interest bearing transaction accounts and savings deposits are reflected in the
earliest repricing interval due to contractual arrangements which give
management the opportunity to vary the rates paid on these deposits within a
thirty-day or shorter period. However, ACNB is under no obligation to vary the
rates paid on those deposits within any given period. Fixed rate time deposits,
principally certificates of deposit, are reflected at their contractual maturity
dates.

INTEREST RATE SENSITIVITY
Over One
Total Year or
0-3 4-6 7-12 Within Non-
Months Months Months One Year sensitive Total
Assets (dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>

Earning assets
Loans, net of unearned income............ $ 14,191 $ 1,710 $ 2,708 $ 18,609 $14,428 $33,037
Investment securities, taxable........... 751 100 - 851 4,050 4,901
Investment securities, nontaxable - - - - 600 600
Federal funds sold....................... 2,110 - - 2,110 - 2,110
Total earning assets................... 17,052 1,810 2,708 21,570 19,078 40,648
Non-earning assets - net.................. - - - - 3,304 3,304
Total assets...................... 17,052 1,810 2,708 21,570 22,382 43,952

Liabilities and Stockholders' Equity
Liabilities
Interest-bearing liabilities
Interest-bearing deposits
Savings................................ $ 4,168 $ - $ - $ 4,168 $ - $ 4,168
Money market/Super NOW................. 13,369 - - 13,369 - 13,369
Certificates of deposit
over $100,000........................ 2,054 400 826 3,280 1,083 4,363
Other certificates of deposit.......... 3,634 3,024 3,365 10,023 3,180 13,203
Total interest-bearing deposits..... 23,225 3,424 4,191 30,840 4,263 35,103
Short-term Borrowings.................... - - 24 24 - 24
Total interest-bearing liabilities 23,224 3,424 4,215 30,864 4,263 35,127

Non-interest-bearing liabilities
Non-interest-bearing deposits.......... - - - - 3,318 $ 3,318
Other non-interest bearing
liabilities - net.................... - - - - 1,806 1,806
Total liabilities................. 23,224 3,424 4,215 30,864 9,387 40,251
Stockholders' equity.............. - - - - 3,701 3,701

Total liabilities and stockholders equity.... $ 23,224 $ 3,424 $ 4,215 $ 30,864 $13,088 $43,952

Interest sensitive gap....................... $ (6,173) $ (1,614) $ (1,507) $ ( 9,294) $ 9,294 -
Cumulative interest sensitive gap............ $ (6,173) $ (7,787) $ (9,294) $ ( 9,294)

</TABLE>

<PAGE>

PROVISION FOR LOAN LOSSES

The provision for loan losses is charged to earnings based on management's
continuing review and evaluation of the loan portfolio and general economic
conditions. Provisions for loan losses were $52,000 and $375,000 for the years
ended December 31, 1993 and 1992, respectively. The lower provision in 1993 is
due to the identification of specific potential problems during 1992 and
allocations therefor.

At December 31, 1993, the allowance for loan losses as a percentage of
outstanding loans was 2.02% compared to 2.07% at December 31, 1992. Management
determines the adequacy of ACNB's loan loss allowance on a quarterly basis.
Factors considered in determining the adequacy of the allowance for loan losses
include: (1) previously classified loans deemed less than 100% collectible, (2)
loans reflecting a recurring delinquent status, (3) past-due loans on which
interest is not being collected in accordance with the terms of the loan, and
loans whose terms have been modified by reducing the interest rates or deferring
interest, (4) excessive loan renewals or payment extensions, (5) general and
local economic conditions, (6) risk in consumer credit products, (7) subjective
considerations as a result of internal discussions with ACNB's loan officers,
(8) known loan deteriorations and/or concentrations of credit, (9) historical
loss experience based on volume and types of loans, (10) trends in portfolio
volume, maturity and composition, (11) projected collateral values, (12) off
balance sheet risk, and (13) depth and experience of ACNB's existing lending
staff. By considering the above factors, management attempts to determine the
amount of allowances necessary to provide for potential losses in the loan
portfolio.

INVESTMENT SECURITIES PORTFOLIO

The following tables summarize the book value and approximate market value
amounts of investment securities held by ACNB at December 31, 1991, 1992 and
1993 and at September 30, 1994, and the maturities and weighted average yields
of those securities at September 30, 1994:

INVESTMENT PORTFOLIO COMPOSITION, MATURITIES AND YIELDS

(dollars in thousands)

1991 1992 1993
Book Gain/Loss Fair Value Book Gain/Loss Fair Value Book Gain/Loss Fair Value
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Treasury & Government Agencies $ 4,542 $ 201 $ 4,743 $ 5,345 $ 159 $ 5,504 $ 7,002 $ 113 $ 7,115
State and Municipals -- -- -- -- -- -- -- -- --
Equity 113 -- 113 116 -- 116 157 -- 157
Total $ 4,655 $ 201 $ 4,856 $ 5,461 $ 159 $ 5,620 $ 7,159 $ 113 $ 7,272
</TABLE>

September 30, 1994
Book Value Gain/Loss Fair Value

Available For Sale
Treasury & government agencies $ 1,449 $ (16) $ 1,433

Hold To Maturity
Treasury & government agencies $ 3,450 $ (183) $ 3,267
State and Municipals 599 (34) 565
Equity 163 --- 163
Total $ 4,212 $ (217) $ 3,995
Total $ 5,661 $ (233) $ 5,428

<PAGE>

<TABLE>
<CAPTION>
MATURITIES & YIELDS

Available for Sale
1 Yr Yield 1-5 Yrs Yield 5-10 Yrs Yield >10 Yrs Yield Total Yield
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Treasuries & Government
Agencies $100 7.87% $ 598 7.06% $ -- 0.00% $ 751 4.36% $ 1,449 5.72%

Held to Maturity
1 Yr Yield 1-5 Yrs Yield 5-10 Yrs Yield >10 Yrs Yield Total Yield
Treasuries & Government
Agencies -- 0.00% $ 2,952 5.41% $ 498 4.74% $ -- 0.00% $ 3,450 5.31%
State and Municipals (1) -- 0.00% 399 5.75% 200 6.21% -- 0.00% 599 5.87%
Equity -- 0.00% -- 0.00% -- 0.00% 163 6.00% 163 6.00%

Total -- 3,351 5.45% 698 5.16% 163 6.00% 4,212 5.39%
Total $100 $ 3,949 $ 698 $ 914 $ 5,661
Yield 7.87% 5.70% 5.16% 4.65% 5.50%
</TABLE>

The weighted average yields set forth in the foregoing table are calculated
on the basis of cost and effective yields for the scheduled maturity of each
security. At December 31, 1993, the market value of the securities portfolio
was $113,000 more than its book value, the average maturity of the securities
portfolio was 41 months, and the average adjusted tax equivalent yield on the
portfolio was 5.50%. As of December 31, 1993, gross unrealized securities gains
totaled $115,000, and gross unrealized losses totaled $2,000.

Decisions involving investment securities are based upon management's
expectations for interest rate movements, overall market conditions, pledging
requirements, and the composition and structure of the balance sheet in
conjunction with asset/liability management.

SFAS No. 115, "Accounting for Certain Investments in Debt and Equity
Securities," was issued by the Financial Accounting Standards Board in May,
1993. The provisions of this Statement are required to be adopted for fiscal
years beginning after December 15, 1993. As required, ACNB implemented SFAS No.
115 effective January 1, 1994. SFAS No. 115 addresses the accounting and
reporting for investments in equity securities that have readily determinable
fair values, and for all investments in debt securities. According to the
Statement, equity and debt securities are to be classified in three categories:
held-to-maturity, trading and available-for-sale. Securities classified as
held-to-maturity are those for which the positive intent and ability to hold
such securities to ultimate maturity is present. These securities will continue
to be accounted for at amortized cost. Securities classified as trading are
those which are purchased primarily for sale in the near term, and will be
accounted for on a fair value basis with unrealized gains and losses included in
earnings. Available-for-sale securities are those which do not fall in the
held-to-maturity or trading categories, and are to be accounted for at fair
value, with unrealized holding gains and losses excluded from the income
statement and recorded directly in a separate shareholders' equity account, net
of applicable income tax effects.

As of January 1, 1994, and September 30, 1994, management assessed the
categorization of investment securities using the criteria set forth by SFAS No.
115. At such dates, investment securities with an amortized cost of $1,928,998
and $1,612,000, respectively, and market values of $1,974,799 and $1,596,000,
respectively, were classified as available-for-sale. All other investment
securities were classified as held-to-maturity for which no change in the method
of accounting is required. The effect of this change in accounting principle on
January 1, 1994, was to increase the book value of investment securities
$45,801, and directly increase shareholders' equity $31,145, net of income tax
effects of $14,656.

<PAGE>

LOAN PORTFOLIO

Management of ACNB believes the loan portfolio is adequately diversified.
There are no significant concentrations of loans with any particular individuals
or industry or group of related individuals or industries, and there are no
foreign loans.

The amount of loans outstanding at December 31, 1989, 1990, 1991, 1992 and
1993 and at September 30, 1994 are shown in the following table according to
type of loan:

LOAN PORTFOLIO COMPOSITION

Years ended December 31, September 30,
1989 1990 1991 1992 1993 1994
(dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Commercial, financial, and agricultural $ 4,533 $ 6,247 $ 9,515 $ 9,110 $ 9,777 $10,643
Real estate - construction 1,397 3,152 4,037 2,078 1,569 1,259
Real estate - mortgage 1,826 2,552 3,041 3,206 3,133 8,914
Installment loans to individuals 6,573 10,011 12,204 11,313 10,057 5,911
Other 2,670 3,654 4,732 4,908 4,825 3,798
TOTAL $16,999 $25,616 $33,529 $30,615 $29,361 $30,525
</TABLE>

A certain degree of risk taking is inherent in the extension of credit.
Management has established loan and credit policies designed to control both the
types and amounts of risks assumed and to ultimately minimize losses. Such
policies include limitations on loan-to-collateral values for various types of
collateral, requirements for appraisals of real estate collateral, problem loan
management practices and collection procedures, and nonaccrual and charge-off
guidelines.

Commercial and industrial loans primarily represent loans made to
businesses, and may be made on either a secured or an unsecured basis. When
taken, collateral consists of liens on receivables, equipment, inventories,
furniture and fixtures. Unsecured business loans are generally short-term with
emphasis on repayment strengths and low debt to worth ratios. During 1993,
total commercial, industrial and business purpose loans secured by real estate
(nonfarm, nonresidential) increased $574,000, or 7.2%. Commercial lending
involves significant risk because repayment usually depends on the cash flows
generated by a borrower's business, and the debt service capacity of a business
can deteriorate because of downturns in national and local economic conditions.
To control risk, initial and continuing financial analysis of a borrower's cash
flows and other financial information is required.

Real estate construction loans generally consist of financing the
construction of 1-4 family dwellings and some nonfarm, nonresidential real
estate. Usually, loan to cost ratios are limited to 75% and permanent financing
commitments are required prior to the advancement of loan proceeds.

Loans secured by real estate mortgages comprised approximately 30.8% and
30.0% of ACNB's loan portfolio at the end of 1993 and 1992, respectively.
Residential real estate loans consist mainly of first and second mortgages on
single family homes, with some multifamily loans. Loan-to-value ratios for
these instruments are generally limited to 80%. Nonfarm, nonresidential loans
are secured by business and
64

<PAGE>

commercial properties with loan-to-value ratios generally limited to 70%. The
repayment of both residential and business real estate loans is dependent
primarily on the income and cash flows of the borrowers, with the real estate
serving as a secondary or liquidation source of repayment.

NONPERFORMING LOANS; OTHER PROBLEM ASSETS

NONACCRUAL AND PAST DUE LOANS

Years ended December 31, September, 30
1989 1990 1991 1992 1993 1994
(dollars in thousands)

<S> <C> <C> <C> <C> <C> <C>
Non-accrual Loans $ 28 $ 282 $ 936 $ 1,628 $ 1,539 $ 1,404
Loans contractually past due 90 days
or more on which interest
is still being accrued 51 181 295 6 -- --
Other real estate -- -- 751 1,445 1,413 776
Total nonperforming assets $ 79 $ 463 $ 1,982 $ 3,079 $ 2,952 $ 2,180
</TABLE>

When a loan is 90 days past due as to interest or principal or there is
serious doubt as to collectibility, the accrual of interest income is generally
discontinued unless the estimated net realizable value of collateral is
sufficient to assure collection of the principal balance and accrued interest.
Previously accrued interest on loans placed in a nonaccrual status is reversed
against current income, and subsequent interest income is recognized when
received. At December 31, 1993, ACNB had $1,539,110 in non-accrual loans, no
loans past due 90 days and still accruing interest, and $1,413,300 in other real
estate owned, compared to $1,628,565, $6,000 and $1,444,719, respectively, at
December 31, 1992. Non-accrual loans amounted to 5.1% of total loans at
December 31, 1993, compared to 5.3% of total loans at December 31, 1992.

When the collectibility of a significant amount of principal is in serious
doubt, the principal balance is reduced to the estimated net realizable value of
collateral by charge-off to the allowance for loan losses and any subsequent
collections are credited first to the remaining principal balance and then to
the allowance for loan losses as a recovery of the amount charged off. A
nonaccrual loan is not returned to accrual status unless principal and interest
are current and the borrower has demonstrated the ability to continue making
payments as agreed.

Net loan charge-offs for 1993 were $92,000 or .39% of average loans
compared to $262,000 or .78% of average loans for 1992.

Interest income that would have been recorded if nonaccrual loans had been
current in accordance with their original terms amounted to $289,190 and
$173,313 for 1993 and 1992, respectively. No interest income was recognized on
these loans during 1992 and 1993. As of December 31, 1993, there were no
commitments to lend additional funds to debtors owing amounts on nonaccrual
loans.

The Financial Accounting Standards Board adopted Statement 114, "ACCOUNTING
BY CREDITORS FOR IMPAIRMENT OF A LOAN", in May, 1993. This statement requires a
lender to consider a loan to be impaired if the lender believes it is probable
that it will be unable to collect all principal and interest due according to
the original contractual terms of the loan. If a loan is impaired, the lender
will be required to record a loan valuation

<PAGE>

allowance equal to the present value of the estimated future cash flows
discounted at the loan's effective rate. This accounting change, effective for
years beginning after December 15, 1994, will significantly change the
accounting by lenders presently allowed under Statement 15. The statement does
not require restatement for previously restructured loans which are performing
in accordance with their restructured terms. Based upon the present status of
the loan portfolio, management does not believe this statement will have a
material adverse effect on ACNB.

POTENTIAL PROBLEM LOANS

Management has identified and maintains a list of potential problem loans.
These are loans that are not included in nonaccrual status or past due 90 days
or more and still accruing. A loan is added to the potential problem list when
management becomes aware of information about possible credit problems of
borrowers that causes serious doubts as to the ability of such borrowers to
comply with the current loan repayment terms.

The total amount of loans outstanding at December 31, 1993 and September
30, 1994 determined by management to be potential problem loans was $1,185,000
and $1,975,000, respectively. This amount does not represent management's
estimate of potential losses since a large proportion of such loans are secured
by various types of collateral. The following table presents information about
the categories and types of collateral with respect to potential problem loans
at December 31, 1993 and September 30, 1994.

POTENTIAL PROBLEM LOANS
(dollars in thousands)

December 31, 1993 September 30, 1994
Percent of Percent of
Amount Category Amount Category
<S> <C> <C> <C> <C>
Commercial and industrial:
Equipment and inventory $ 289 3.36% $ 18 0.21%
Unsecured -- -- -- --
Real estate - mortgage:
Commercial 178 5.42% 982 16.92%
1-4 family residential 718 24.00% 965 22.36%
Consumer installment:
Vehicles, mobile homes and equipment -- -- 10 0.23%
Unsecured -- -- -- --
Total $ 1,185 4.04% $ 1,975 6.47%
</TABLE>

OTHER REAL ESTATE

Other real estate totaled $1,413,300 at December 31, 1993, and consisted of
foreclosed properties. Other real estate held is located in and around the city
of Aiken. Other real estate is initially recorded at the lower of net loan
principal balance or its estimated fair market value less estimated selling
costs. The estimated fair value is determined by appraisal at the time of
acquisition. The market for real estate in Aiken has been impacted by the
uncertainty of the future of Westinghouse's Savannah River Site, the area's
largest employer.

<PAGE>

ALLOWANCE FOR LOAN LOSSES

The purpose of the allowance for loan losses is to absorb loan losses that
occur in the loan portfolio. Management considers a variety of factors in
establishing a level of allowance for losses and the related provision, which is
charged to expense. The factors used in this determination are historical net
charge-off experience, growth in the loan portfolio, present and forecasted
economic environment, management's evaluation of specifically identified loans,
internal classification of the loan portfolio and consultation with regulatory
authorities.

The allowance for loan losses represents management's estimate of an amount
adequate in relation to the risk of future losses inherent in the loan
portfolio. In its continuing evaluation of the allowance and its adequacy
management considers, among other factors, ACNB's loan loss experience, the
amount of past due and nonperforming loans, current and anticipated economic
conditions and the values of collateral securing loans.

While it is ACNB's policy to charge off in the current period loans in
which a loss is considered probable, there are additional risks of future losses
which cannot be quantified precisely or attributed to particular loans or
classes of loans. Because these risks include the state of the economy as well
as conditions affecting individual borrowers, management's judgment of the
allowance is necessarily imprecise. ACNB is also subject to regulatory
examinations and determinations as to adequacy, which may take into account such
factors as the methodology used to calculate the allowance for loan losses and
the size of the allowance for loan losses in comparison to a group of peer
companies, identified by the regulatory agencies.

In assessing the adequacy of the allowance, management relies predominantly
on its ongoing review of the loan portfolio, which is undertaken both to
ascertain whether there are probable losses which much be charged off and to
assess the risk characteristics of the portfolio in the aggregate. The review
considers the judgments of management and also those of bank regulatory agencies
that review the loan portfolio as part of their regular examination process.
The OCC, as part of its routine examination process of various national banks,
may require additions to the allowance for loan losses based upon the
regulators' credit evaluations differing from those of management.

On December 31, 1993, the allowance for loan losses was $582,000 compared
with $621,000 for the prior year. The ratio of the allowance for loan losses to
net loans outstanding was 2.02% at December 31, 1993 compared to 2.07% at
December 31, 1992.

During 1993, ACNB experienced net charge-offs of $91,000 compared to net
charge-offs of $262,000 one year earlier. Installment loan net charge-offs were
$24,000 in 1993 versus $56,000 in 1992. Commercial loan net charge-offs were
$106,000 in 1992 compared to net recoveries of $1,000 in 1993. Real estate loan
net charge-offs were $115,000 in 1993 compared to $30,000 in 1992.

Management will continue to closely monitor the levels of nonperforming and
potential problem loans and will address the weaknesses in these credits to
enhance the amount of ultimate collection on recovery of these assets. Should
increases in the overall level of nonperforming and potential problem loans
accelerate from the current trend, management will adjust the methodology for
determining the allowance for loan losses to increase the provision and
allowance for loan losses. This would likely decrease net income.

The following table summarizes loan balances of ACNB at the end of each
period and averages for each period, changes in the allowance arising from
charge-offs and recoveries by category, and additions to the allowance which
have been charged to expense.

<PAGE>

SUMMARY OF LOAN LOSS EXPERIENCE
Nine Months ended
Years ended December 31, September 30,
1989 1990 1991 1992 1993 1994
(dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Balance at beginning of period $ 57 $ 249 $ 328 $ 508 $ 621 $ 582
Charge-offs:
Commercial, financial and agricultural (139) (26) (9) (192) (34) (31)
Real estate - mortgage -- -- (31) (30) (55) (37)
Consumer -- -- (31) (56) (24) (13)
Other -- -- (13) (12) (1) (15)
Total loans charged-off $ (139) $ (26) $ (84) $ (290) $ (114) $ (96)

Recoveries:
Commercial, financial and agricultural -- 101 -- 28 -- --
Real estate mortgage -- -- -- -- 23 --
Consumer -- -- -- -- -- --
Other -- -- -- -- -- 13
Net charge-offs (139) 75 (84) (262) (91) (83)
Provision charged to expense 331 4 264 375 52 30
Balance at end of period $ 249 $ 328 $ 508 $ 621 $ 582 $ 529

Ratio of net charge-offs to average loans .83% .36% .26% .78% .31% .28%
</TABLE>

Management considers the allowance for loan losses adequate to cover
possible losses on the loans outstanding at December 31, 1993. In the opinion
of management, there are no material risks or significant loan concentrations,
and the allowance for loan losses is adequate to absorb anticipated loan losses
in the present loan portfolio. It must be emphasized, however, that the
determination of the allowance for loan losses using ACNB's procedures and
methods rests upon various judgments and assumptions about future economic
conditions and other factors affecting loans. No assurance can be given that
ACNB will not in any particular period sustain loan losses which are sizable in
relationship to the amount reserved or that subsequent evaluation of the loan
portfolio, in light of conditions and factors then prevailing, will not require
significant changes in the allowance for loan losses or future charges to
earnings. The allowance for loan losses is also subject to review and approval
by various regulatory examinations. Such examinations could result in required
changes to the allowances for loan losses.

DEPOSITS

The average amounts and percentage composition of deposits held by ACNB for
the years ended December 31, 1991, 1992, 1993, are summarized below:

<TABLE>
<CAPTION>
AVERAGE DEPOSITS

Years Ended December 31,
1991 1992 1993
Amount % Amount % Amount %
(dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Noninterest bearing demand $ 3,186 7.85% $ 2,950 7.23% $ 2,418 6.73%
Interest bearing transaction accounts 7,219 17.79 6,126 15.01 4,398 12.25
Savings 10,851 36.74 7,737 18.95 5,040 14.04
Time deposits $100,000 and greater 3,204 7.89 3,805 9.32 2,914 8.12
Other time deposits 16,124 39.73 20,194 49.48 21,122 58.84
Total deposits $ 40,584 100.00% $ 40,812 100.00% $ 35,892 100.00%
</TABLE>

<PAGE>

The vast majority of time deposits $100,000 and over are acquired from
customers within ACNB's service area in the ordinary course of business. ACNB
does not purchase brokered deposits. While most of the large time deposits are
acquired from customers with standing relationships with ACNB, it is a common
industry practice not to consider these types of deposits as core deposits
because their retention can be expected to be heavily influenced by rates
offered, and therefore such deposits have the characteristics of shorter-term
purchased funds. Certificates of deposit $100,000 and over involve the
maintenance of an appropriate matching of maturity distribution and a
diversification of sources to achieve an appropriate level of liquidity.

RETURN ON EQUITY AND ASSETS

The following table shows the return on assets (net income divided by
average total assets), return on equity, (net income divided by average equity),
and equity to assets ratio (average equity divided by average total assets) for
each period indicated.

Years ended December 31,
1991 1992 1993

(dollars in thousands)

Return on assets 0.15% (.30)% 0.25%
Return on equity 1.54 (3.55) 3.10
Equity to assets 9.43 8.40 8.14

LIQUIDITY

Liquidity is the ability to meet current and future obligations through
liquidation or maturity of existing assets or the acquisition of additional
liabilities. Adequate liquidity is necessary to meet the requirements of
customers for loans and deposit withdrawals in the most timely and economical
manner. Some liquidity is ensured by maintaining assets which may be
immediately converted into cash at minimal cost (amounts due from banks and
federal funds sold). However, the most manageable sources of liquidity are
composed of liabilities, with the primary focus on liquidity management being on
the ability to obtain deposits within ACNB's service area. Core deposits (total
deposits less time deposits of $100,000 and over) provide a relatively stable
funding base, and the average of these deposits represented 76.89% of average
total assets during 1993 compared with 75.76% during 1992. Local governmental
deposits comprised approximately 1.1% and 1.0% of total deposits at the end of
1993 and 1992, respectively. ACNB has available an unused short-term line of
credit to purchase up to $1,000,000 of federal funds from an unrelated
correspondent institution. The line is available on a one to seven day basis.
Asset liquidity is provided from several sources, including amounts due from
banks and federal funds sold. Investment securities, particularly those
maturing within one year, also provide a secondary source of liquidity. While
most investment securities are generally purchased with the intent of being held
to maturity, such securities are marketable and occasional sales may occur prior
to maturity as a part of the process of liquidity management. In addition,
funds from maturing loans are a source of liquidity. Management believes that
ACNB's overall liquidity sources are adequate to meet its operating needs.

CAPITAL ADEQUACY AND RESOURCES

ACNB is subject to regulatory risk-based capital adequacy standards. Under
these standards, banks are required to maintain certain minimum ratios of
capital to risk-weighted assets and average total assets. Under the provisions
of FDICIA, federal bank regulatory authorities are required to implement
prescribed "prompt corrective actions" upon the deterioration of the capital
position of a bank. If the capital position of an affected

<PAGE>

institution were to fall below certain levels, increasingly stringent
regulatory corrective actions are mandated. See - "--Supervision and Regulation
of ACNB."

INFLATION

Since the assets and liabilities of a bank are primarily monetary in nature
(payable in fixed, determinable amounts), the performance of a bank is affected
more by changes in interest rates than by inflation. Interest rates generally
increase as the rate of inflation increases, but the magnitude of the change in
rates may not be the same.

While the effect of inflation on banks is normally not as significant as is
its influence on those businesses which have large investments in plant and
inventories, it does have an effect. During periods of high inflation, there
are normally corresponding increases in the money supply, and banks will
normally experience above-average growth in assets, loans and deposits. Also
general increases in the prices of goods and services will result in increased
operating expenses.

PROPERTIES

ACNB operates through its main office, located at 142 Chesterfield Street,
S.E., and one branch office, located at 2040 Whiskey Road, in Aiken, South
Carolina. Both facilities are owned by ACNB and were built specifically for
ACNB. The main office contains approximately 6,688 square feet and the branch
office contains approximately 2,900 square feet. ACNB believes that these
facilities are adequate for its current operations.

SUPERVISION AND REGULATION OF ACNB

As a national bank with deposit accounts insured by the FDIC, ACNB is
subject to extensive federal regulation. The following discussion is a summary
of certain provisions of law and regulation that apply to ACNB and is qualified
in its entirety by reference to the applicable laws or regulations.

CAPITAL ADEQUACY REQUIREMENTS FOR NATIONAL BANKS

The OCC has adopted capital adequacy regulations for national banks. Under
the regulations, the minimum ratio of total capital to risk-weighted assets
(including certain off-balance sheet activities, such as standby letters of
credit) is 8%. At least half of the total capital is required to be "Tier 1
capital," principally consisting of common shareholders' equity, noncumulative
perpetual preferred stock, and minority interests in the equity accounts of
consolidated subsidiaries, less certain goodwill items. The remainder ("Tier 2
capital") may consist of a limited amount of subordinated debt, certain hybrid
capital instruments and other debt securities, cumulative perpetual preferred
stock, long term preferred stock, convertible preferred stock, and a limited
amount of the general loan loss allowance. In addition to the risk-based
capital ratio, the OCC has adopted a minimum level of Tier 1 (leverage) capital
ratio, under which a national bank must maintain a minimum level of Tier 1
capital to average total consolidated assets of at least 3% in the case of a
national bank which has the highest regulatory examination rating and is not
contemplating significant growth or expansion. All other national banks are
expected to maintain a ratio of at least 1% to 2% above the stated minimum.
Pursuant to the OCC Consent Agreement, ACNB is required to maintain ratios of at
least 9.5% of Tier 1 capital to risk-weighted assets and 6.5% of Tier 1 capital
to adjusted total assets.

<PAGE>

The table below summarizes ACNB's capital position at December 31, 1994.

December 31, 1994
Primary capital to total assets 8.31%
Total capital to total assets 9.29%
Tier 1 capital to risk weighted assets 10.19%
Total capital to risk weighted assets 11.37%

See "INFORMATION ABOUT CAROLINA FIRST CORPORATION -- Certain Regulatory
Matters --Federal Deposit Insurance Corporation Improvement Act of 1991," for a
discussion of certain proposed rules relating to risk-based capital standards
that also relate to ACNB. The management of ACNB is unable to predict whether
and when higher capital requirements would be imposed and, if so, at what levels
and on what schedule.

PAYMENT OF DIVIDENDS

If a national bank's surplus fund equals the amount of its capital stock,
the directors may declare quarterly, semiannual or annual dividends out of the
bank's net profits, after deduction of losses and bad debts. If the surplus
fund does not equal the amount of capital stock, a dividend may not be paid
until one-tenth of the bank's net profits of the preceding half year, in the
case of quarterly or semi-annual dividends, or the preceding two years, in the
case of an annual dividend, are transferred to the surplus fund.

The approval of the OCC is required if the total of all dividends declared
by a national bank in any calendar year will exceed the total of its retained
net profits of that year combined with its retained net profits of the two
preceding years, less any required transfers to surplus or a fund for the
retirement of any preferred stock. OCC regulations provide that provisions for
possible credit losses cannot be added back to net income and charge-offs cannot
be deducted from net income in calculating the level of net profits available
for the payment of dividends.

The payment of dividends by ACNB may also be affected or limited by other
factors, such as the requirements to maintain adequate capital above regulatory
guidelines. In addition, if, in the opinion of the OCC, a bank under its
jurisdiction is engaged in or is about to engage in an unsafe or unsound
practice (which, depending on the financial condition of the bank, could include
the payment of dividends), the OCC may require, after notice and hearing, that
such bank cease and desist from such practice. The OCC has indicated that
paying dividends that deplete a national bank's capital base to an inadequate
level would be an unsafe and unsound banking practice. The Federal Reserve, the
OCC and the FDIC have issued policy statements which provide that bank holding
companies and insured banks should generally only pay dividends out of current
operating earnings.

ACNB does not currently qualify to pay dividends under the National Bank
Act. Furthermore, ACNB's ability to pay dividends is currently limited by the
OCC Consent Agreement. See " --Consent Agreement with the OCC."

FDIC INSURANCE ASSESSMENTS

Because ACNB's deposits are insured by the BIF, ACNB is subject to
insurance assessments imposed by the FDIC. Under current law, the insurance
assessment to be paid by BIF-insured institutions is as specified in a schedule
issued by the FDIC that specifies, at semiannual intervals, target reserve
ratios designated to increase the FDIC insurance funds' reserve ratios to 1.25%
of estimated insured deposits (or such higher ratio
71

<PAGE>

as the FDIC may determine in accordance with the statute) in 15 years.
Further, the FDIC is authorized to impose one or more special assessments in
any amount deemed necessary to enable repayment of amounts borrowed by the FDIC
from the Treasury Department. The FDIC has implemented a risk-based assessment
schedule, imposing assessments ranging from 0.23% to 0.31% of an institution's
average assessment base. The actual assessment to be paid by each BIF member
is based on the institution's assessment risk classification, which is
determined based on whether the institution is considered "well capitalized,"
"adequately capitalized" or "undercapitalized," as such terms have been defined
in applicable federal regulations adopted to implement the prompt corrective
action provisions of FDICIA (see "---Other Safety and Soundness Regulations"),
and whether such institution is considered by its supervisory agency to be
financially sound or to have supervisory concerns. Based on its current
financial condition and capital levels, ACNB does not expect that the current
BIF risk-based assessment schedule will have a material adverse effect on its
earnings.

OTHER REGULATORY MATTERS

ACNB is also subject to examination by the OCC bank examiners. In
addition, ACNB is subject to various other state and federal laws and
regulations. See "INFORMATION ABOUT CAROLINA FIRST CORPORATION -- Certain
Regulatory Matters -- Other Regulations" for a discussion of these other state
and federal laws and regulations.

ACNB is also subject to the requirements of the CRA. See "INFORMATION
ABOUT CAROLINA FIRST CORPORATION -- Certain Regulatory Matters -- Community
Reinvestment Act" for a discussion of the CRA and the proposed rule issued by
each of the federal banking agencies, including the OCC.

OTHER SAFETY AND SOUNDNESS REGULATIONS

See "INFORMATION ABOUT CAROLINA FIRST CORPORATION--Certain Regulatory
Matters--Other Safety and Soundness Regulations" for a discussion of other
laws and regulations that are also applicable to ACNB.

INTERSTATE BANKING

Congress recently enacted legislation which will increase the ability of
bank holding companies and banks to operate across state lines. For further
discussion of such legislation, see "INFORMATION ABOUT CAROLINA FIRST
CORPORATION -- Certain Regulatory Matters -- Interstate Banking." ACNB is unable
to determine at this time what effect such legislation is likely to have on it
and its operations.

<PAGE>

MANAGEMENT INFORMATION

MANAGEMENT AND PRINCIPAL SHAREHOLDERS OF CAROLINA FIRST CORPORATION

The following table sets forth the persons serving as the Carolina First
Corporation's directors and executive officers, their respective ages,
positions, and the dates of service, as well as the number of shares of CFC
common stock owned beneficially or of record by the directors, the named
executive officers and by all directors and executive officers of Carolina First
Corporation as a group. Unless otherwise noted, each person has sole voting
power and sole investment power with respect to shares listed. Ownership by the
named individuals of Carolina First Corporation preferred stock is set forth in
the footnotes.

Officer/ Amount and Percent Percent
Position or Office with Director Nature of Bene- of of
Name Age Carolina First Corporation Since ficial Ownership Class(1) Class(2)
<S> <C> <C> <C> <C> <C> <C>
DIRECTORS
Judd B. Farr 68 Director 1994 49,410 1.08% *
C. Claymon Grimes, Jr. 72 Director 1990 41,637 * *
M. Dexter Hagy 50 Director 1993 5,476 (3) * *
Robert E. Hamby, Jr. 48 Director 1993 8,763 (4) * *
William S. Hummers III 49 Director 1990 36,836 (5) * *
R. Glenn Hilliard 52 Director 1986 21,049 * *
Richard E. Ingram 53 Director 1986 52,668 1.15% 1.05%
Charles B. Schooler 66 Director 1990 24,868 * *
Elizabeth P. Stall 63 Director 1986 35,880 (6) * *
William R. Timmons, Jr. 70 Chairman 1986 225,888 (7) 4.87% 4.44%
William M. Webster III 61 Director 1986 70,387 (8) 1.53% 1.40%
Mack I. Whittle, Jr. 46 Director 1986 110,888 (9) 2.42% 2.20%
EXECUTIVE OFFICERS
Mack I. Whittle, Jr. 46 President and CEO 1986 110,888 (9) 2.13% 1.65%
William S. Hummers III 49 Executive Vice President 1988 28,023 (5) * *
James W. Terry, Jr. 47 President and Director of 1991 18,416 (10) * *
Carolina First Bank
David L. Morrow 44 Executive Vice President of 1992 7,803(11)
Carolina First Bank
Joseph C. Reynolds 49 President and Director of 1993 11,210(12) * *
Carolina First Mortgage Company
ALL DIRECTORS AND EXECUTIVE OFFICERS AS A GROUP (15 PERSONS) 721,181 15.47% 14.10%

</TABLE>

* Less than 1%.

(1) The calculation is based on a total of 4,581,247 shares of CFC common stock
outstanding as of January 16, 1995 and assumes no issuance of CFC common
stock in connection with the Merger, no issuance of CFC common stock in
connection with Carolina First Corporation's acquisition of Midlands
National Bank, and no conversion of any shares of any series of Carolina
First Corporation preferred stock (except for shares of preferred stock
owned by the named individual).

(2) The calculation is based on a total of 5,034,060 shares of Common Stock
outstanding as of January 16, 1995 and assumes the issuance of 452,813
shares of CFC common stock in connection with the Merger, no issuance of
CFC common stock in connection with Carolina First Corporation's
acquisition of Midlands National Bank, and no conversion of any shares of
any series of Carolina First Corporation preferred stock (except for
shares of preferred stock owned by the named individual).

(3) Assumes conversion of 400 shares of Series 1994 Preferred Stock owned by
Mr. Hagy.

(4) Assumes conversion of 2,000 shares of Series 1993 Preferred Stock and 2,000
shares of Series 1994 Preferred Stock.

(5) Includes 17,427 shares of Common Stock owned by Mr. Hummers through the
Restricted Stock Plan.

(6) Includes 1,575 shares of Common Stock owned by the estate of Ms. Stall's
spouse and assumes conversion of 1,950 shares of Series 1994 Preferred
Stock owned by the estate of Ms. Stall's spouse and 1,000 shares of Series
1994 Preferred Stock owned by Ms. Stall.

(7) Includes 88,023 shares of Common Stock owned by Canal Insurance Company
("Canal"), of which Mr. Timmons is an officer and assumes conversion of
3,000 shares of Series 1994 Preferred Stock owned by Mr. Timmons and
30,000 shares of Series 1994 Preferred Stock owned by Canal.

(8) Assumes conversion of 4,000 shares of Series 1994 Preferred Stock owned
by Mr. Webster and includes 5,197 shares of Common Stock owned by Mr.
Webster's spouse.

(9) Includes 29,646 shares of Common Stock owned by Mr. Whittle through the
Restricted Stock Plan and assumes conversion of 492 shares of Series 1993B
Preferred Stock and 300 shares of Series 1994 Preferred Stock owned by Mr.
Whittle.

(10)Includes 10,780 shares of Common Stock owned by Mr. Terry through the
Restricted Stock Plan.

(11)Includes 7,183 shares of Common Stock owned by Mr. Morrow through the
Restricted Stock Plan.

(12) Includes 8,200 shares of Common Stock owned by Mr. Reynolds through the
Restricted Stock Plan and assumes conversion of 700 shares of Series 1993
Preferred Stock owned by Mr. Reynolds.

<PAGE>

BUSINESS EXPERIENCE OF CAROLINA FIRST CORPORATION DIRECTORS

Mr. Farr is the owner and President of Greenco Beverage, Inc., a
distributorship headquartered in Greenville, South Carolina. Mr. Farr has
served as President since the opening of Greenco Beverage, Inc. in 1965.

Mr. Grimes is an attorney in private practice in Georgetown, South
Carolina. From 1987 until 1992 Mr. Grimes was of counsel with The McNair Law
Firm in its Georgetown, South Carolina office.

Mr. Hamby is Senior Vice President-Finance and Administration and Chief
Financial Officer of Multimedia, Inc.,a diversifiedmediacompany
headquarteredinGreenville, SouthCarolina whichownsand operatesnewspapers,
television and radio stations, cable television systems and media productions.
Mr. Hamby became Multimedia, Inc.'s Chief Financial Officer in 1987 and Senior
Vice President in 1993. Prior to 1985, when Mr. Hamby first became affiliated
with Multimedia, Inc., Mr. Hamby was a partner in the accounting firm of KPMG
Peat Marwick. Mr. Hamby is a director of Multimedia, Inc.

Mr. Hagy is President of Vaxa Corporation, an investment holding company
located in Greenville, South Carolina which was formed in 1987. From 1991
through 1993, Mr. Hagy (through Vaxa Corporation) owned Siteguard Security
Holding Company, a security alarm business headquartered in Greenville, South
Carolina. Mr. Hagy is a director of Multimedia, Inc.

Mr. Hilliard is President and Chief Executive Officer of ING Life
Companies, a company which is engaged in insurance related operations. From
1989 until 1992, Mr. Hilliard served as President and Chief Executive Officer of
Security Life of Denver. Prior to 1989, he was Chairman and Chief Executive
Officer of Liberty Life Insurance Company, Greenville, South Carolina.

Mr. Hummers joined the Company in June 1988 in his present capacity. From
1986 to 1988, he was Vice President - Management Reporting with First Union
Corporation, Charlotte, North Carolina. From 1982 to 1986, he was Senior Vice
President and Controller with Southern Bank and Trust which was acquired by
First Union National Bank of South Carolina in 1986. He is also a director of
World Acceptance Corporation.

Mr. Ingram is currently Chairman of Builder Marts of America, Inc., a
company engaged in the wholesale distribution of building materials ("Builder
Marts"). From 1988 until 1993, Mr. Ingram served as Chief Executive Officer of
Builder Marts. Since 1993, Mr. Ingram has also served as Chief Executive
Officer of Snyder's Auto Sales, Inc., a company which operates a car dealership
in Greenville, South Carolina. Mr. Ingram is also a director of Synalloy
Corporation.

Mr. Schooler is a Doctor of Optometry in Georgetown, South Carolina.

Ms. Stall is a private investor in Greenville, South Carolina. Ms. Stall
is a director of Multimedia, Inc.

Mr. Timmons is currently Chairman of Canal Insurance Company, an insurer of
commercial motor vehicles ("Canal"). From 1947 until 1993, Mr. Timmons served
as First Vice President and Secretary of Canal.

Mr. Webster is, and has been since 1978, a partner in Carabo Capital, a
company which owns real property. During the past five years until 1992, he has
also served as an executive officer of Litchfield Enterprises, Inc., a resort
development company.

Mr. Whittle has been President and Chief Executive Officer of the Company
since its organization in 1986. From 1986 until 1991, Mr. Whittle also served as
President of Carolina First Bank. Mr. Whittle previously served as Senior Vice
President and Regional Officer for Bankers Trust of South Carolina (currently
NationsBank of South Carolina) from 1982 until May 1986, when he resigned his
position in order to organize the Company.

BUSINESS EXPERIENCE OF CAROLINA FIRST CORPORATION EXECUTIVE OFFICERS

Mr. Whittle's business experience is set forth above under "Business
Experience of Directors."

Mr. Hummers' business experience is set forth above under "Business
Experience of Directors."

<PAGE>

Mr. Terry has served as the President and a Director of Carolina First Bank
since 1991. From 1986 to 1991, Mr. Terry was Senior Vice President and Regional
Executive for First Union National Bank of South Carolina in Greenville, South
Carolina.

Mr. Morrow has served as the President and a Director of Carolina First
Savings Bank since 1992. From 1988 to 1992, Mr. Morrow was Vice President/City
Executive for First Union National Bank of South Carolina in Hilton Head, South
Carolina.

Mr. Reynolds has served as President of Carolina First Mortgage Company
since 1993. From 1984 until 1993, Mr. Reynolds was Senior Vice President and
Chief Mortgage Banking Officer at South Carolina Federal Savings Bank, F.S.B. in
Columbia, South Carolina.

OTHER INFORMATION REGARDING CAROLINA FIRST CORPORATION

Other information concerning the directors and executive officers of
Carolina First Corporation, compensation of directors and executive officers of
Carolina First Corporation and any related transactions in which they have an
interest, together with information related to principal shareholders of
Carolina First Corporation, is set forth in Carolina First Corporation Proxy
Statement, dated February 28, 1994, incorporated herein by reference to Carolina
First Corporation's Annual Report on Form 10-K for the year ended December 31,
1993. See "INFORMATION ABOUT CAROLINA FIRST CORPORATION -- Incorporation of
Certain Information By Reference."

<PAGE>

MANAGEMENT AND PRINCIPAL SHAREHOLDERS OF ACNB

As of January 16, 1995, there were no persons or groups known to ACNB which
owned five percent or more of its total outstanding common stock.

The following table sets forth (i) as of January 16, 1995, the
number and percent of total outstanding shares of ACNB common stock
beneficially owned by all directors and executive officers of ACNB
individually and by all directors and executive officers of ACNB as a
group; and (ii) pro forma upon consummation of the Merger, the number
and percent of total outstanding shares of CFC common stock benefically
owned by such persons individually and as a group.

Pro Forma
Amount and Percent Amount and Percent
Title Nature of Bene- of Nature of Bene- of
of Class Name of Beneficial Owner ficial Ownership Class ficial Ownership Class(1)
<C> <S> <C> <C> <C> <C> <C>
DIRECTORS
Common Stock L. O. Benton, III 15,000 3.7% 16,875 *
Common Stock Wade M. Brodie 10,000 2.5% 11,250 *
Common Stock Harold D. Enloe 15,000 3.7% 16,875 *
Common Stock Michael L. Laughlin 15,900 3.9% 17,887 *
Common Stock David M. Lock 14,500 3.6% 16,312 *
Common Stock A. G. Milner, III 200 * 225 *
Common Stock Ted W. Morton 12,500 3.1% 14,062 *
Common Stock William H. Nock 2,588(2) * 19,786(3) *

EXECUTIVE OFFICERS
Common Stock William H. Nock 2,588(2) * 19,786(3) *
Common Stock Harriet R. Murray 1,000 * 1,125 *

DIRECTORS AND EXECUTIVE OFFICERS AS A GROUP
Common Stock All directors and officers
as a group (9 persons) 86,688(2) 21.5% 97,524 2.0%
* Less than 1%.
</TABLE>

(1) This calculation is based on an aggregate of 4,581,247 shares of Common
Stock, which is deemed to be outstanding under Rule 13d-3 of the Exchange Act.

(2) Does not include an outstanding option to purchase 15,000 shares of
ACNB common stock held by Mr. Nock, which option will be cancelled at the
Effective Date and replaced with an option to purchase 16,875 shares of CFC
common stock.

(3) Assumes the grant of an option to purchase 16,875 shares of CFC common
stock, which option will be granted at the Effective Date of the Merger in
exchange for the cancellation of an existing option to purchase 15,000 shares of
ACNB common stock.

INTERESTS OF CERTAIN PERSONS IN THE MERGER

As of the Effective Date of the Merger, Carolina First Corporation will
enter into an employment agreement with William H. Nock, who is currently the
President and a director of ACNB. The agreement will provide for continued
payment of salary in the event of certain types of termination, an employment
term of three years, that may be extended by Carolina First Corporation, and for
certain other benefits. In connection with the Merger, Carolina First
Corporation has also agreed to issue to Mr. Nock, at the Effective Date, an
option to purchase 16,875 shares of CFC common stock, which option will be
granted at the Effective Date of the Merger in exchange for the cancellation of
an existing option to purchase 15,000 shares of ACNB common stock. Mr. Nock
will not be considered an executive officer of Carolina First Bank after the
Merger.

In connection with the Merger, Carolina First Corporation also expects to
enter into employment contracts with three other ACNB employees. These
contracts generally provide for continued payment of salary in the event of
certain types of termination, an employment term of two years, and for certain
other benefits. None of these three persons will be considered executive
officers of Carolina First Bank after the Merger.

<PAGE>

COMPARATIVE RIGHTS OF SHAREHOLDERS

On the Effective Date, all of the outstanding shares of ACNB common stock
will be converted into CFC common stock. Accordingly, shareholders of ACNB will
become shareholders of Carolina First Corporation, and their rights as Carolina
First Corporation shareholders will be determined by South Carolina law and
Carolina First Corporation's Articles of Incorporation and Bylaws. The rights
of Carolina First Corporation shareholders differ from the rights of ACNB's
shareholders with respect to certain important matters, including the required
shareholder votes as to mergers, consolidations, exchanges, sales of assets or
dissolution, removal of directors and amendments to the articles of
incorporation, classification of the board of directors, preemptive rights,
cumulative voting rights, nomination of directors, and statutory and other
restrictions on certain business combinations and control share acquisitions.

A comparison of the respective rights of ACNB's shareholders and Carolina
First Corporation's shareholders with respect to these matters is set forth
immediately below. A description of the CFC common stock is set forth below
under "CAROLINA FIRST CORPORATION CAPITAL STOCK."

COMPARISON OF CFC COMMON STOCK AND ACNB COMMON STOCK

The rights of Carolina First Corporation shareholders are governed by
Carolina First Corporation's Articles of Incorporation and Bylaws and the
applicable provisions of the South Carolina Business Corporation Act of 1988, as
amended (the "South Carolina Corporations Law"). By contrast, the rights of
ACNB shareholders are governed by ACNB's Articles of Association and Bylaws and
by federal law. If the holders of ACNB common stock approve the Merger
Agreement and the Merger is subsequently consummated, holders of ACNB common
stock will become holders of CFC common stock. Although it is impracticable to
note all the differences between the South Carolina Corporations Law and federal
law generally, and all of the differences between the applicable governing
documents of Carolina First Corporation and ACNB, the following is intended to
be a summary of certain significant differences between the rights of holders of
CFC common stock and ACNB common stock. This comparison of the rights of
holders of ACNB common stock and CFC common stock is based on the current terms
of the governing documents of the respective companies and on the current
provisions of state and federal law and is qualified in its entirety thereby.

CAPITALIZATION. ACNB is authorized to issue 500,000 shares of common
stock, $5.00 par value, of which 402,500 shares were issued and outstanding as
of January 16, 1995. Carolina First Corporation has (i) 20,000,000 shares of $1
par value common stock authorized, of which 4,581,247 shares of Common Stock
were outstanding as of January 16, 1995, and (ii) 10,000,000 shares of "blank
check" preferred stock authorized, of which 621,000 shares of Noncumulative
Convertible Preferred Stock Series 1993 (the "Series 1993 Preferred Stock"),
60,000 shares of Noncumulative Convertible Preferred Stock Series 1993B (the
"Series 1993B Preferred Stock") and 920,000 shares of Noncumulative Convertible
Preferred Stock Series 1994 (the "Series 1994 Preferred Stock") were authorized
and outstanding at January 16, 1995.

VOTING IN GENERAL. In general, holders of both ACNB common stock and CFC
common stock are entitled to one vote per share and to the same and identical
voting rights as other holders of such common stock. However, in the election
of directors, ACNB shareholders have the right to cumulate votes, i.e. the right
to give one candidate as many votes as shall equal the number of directors
multiplied by the number of his shares, or to distribute them on the same
principle among as many candidates as he shall think fit. Holders of CFC common
stock are not entitled to cumulate votes under any circumstances.

MERGERS, CONSOLIDATIONS, EXCHANGES, SALES OF ASSETS OR DISSOLUTION. A vote
of two-thirds of the outstanding shares of ACNB is required to approve any
merger, consolidation, exchange, sale of substantially all of the assets of, or
dissolution of ACNB. Carolina First Corporation's Articles of Incorporation
require the affirmative vote

<PAGE>

of holders of at least 80% of the outstanding stock of Carolina First
Corporation entitled to vote for approval before Carolina First Corporation
may (a) merge or consolidate with any other corporation, (b) sell or exchange
all or a substantial part of its assets to or with any other corporation, or
(c) issue or deliver any stock or other securities in exchange or payment for
any properties or assets of any other corporation, or securities issued by any
other corporation, or in a merger of any subsidiary of Carolina First
Corporation with or into any other corporation (the foregoing being hereinafter
referred to as a "business combination"). This 80% supermajority is reduced to
the percentage required by applicable law if such business combination was
approved and recommended without condition by the affirmative vote of at least
80% of the directors.

DIRECTORS. The Articles of Association of ACNB provide for a Board of
Directors having not less than five or more than fifteen members as determined
from time to time by vote of a majority of the members of the Board of Directors
or by resolution of the shareholders of ACNB. Vacancies may be filled by the
other or remaining directors, provided, however, that the directors may not
increase the number of directors to a number that exceeds by more than two the
number of directors last elected by the shareholders where the number was
fifteen or less. Carolina First Corporation's Articles of Incorporation provide
that the number of directors shall be set by the Board of Directors or the
shareholders. However, the Board of Directors cannot change the size of the
Board by more than 30% without shareholder approval. Vacancies may be filled by
existing directors. The Carolina First Corporation Board of Directors currently
has twelve members. In accordance with Carolina First Corporation's Articles of
Incorporation, whenever the Board consists of nine or more persons, the Board
shall be divided into three classes of directors (with each class having as
close to an equal number as possible). The members of each class are elected
for staggered three-year terms.

NOMINATION OF DIRECTORS. The Articles of Association of ACNB provide that
nominations for election to the board of directors may be made by the board of
directors or by any shareholder of ACNB entitled to vote for election of
directors. Nominations other than those made by or on behalf of the existing
ACNB management must be made in writing and be delivered or mailed to the
president of ACNB and to the OCC not less than 14 days nor more than 50 days
prior to any meeting of shareholders called for the election of directors;
provided, however, that if less than 21 days notice of the meeting is given to
shareholders, such nominations must be mailed or delivered to the president of
ACNB and to the OCC not later than the close of business on the seventh day
following the day on which the notice of meeting was mailed. Such notification
must contain certain specified information to the extent known to the notifying
shareholder. Carolina First Corporation's Articles of Incorporation provide
that, in addition to the Board of Directors, any stockholder entitled to vote
for the election of directors may make nominations for the election of directors
only by giving written notice to the Secretary of Carolina First Corporation at
least 30 days but not more than 60 days prior to the annual meeting of
stockholders at which directors are to be elected, unless such requirement is
waived in advance of the meeting by the Board of Directors.

INDEMNIFICATION OF OFFICERS AND DIRECTORS. The governing documents of both
Carolina First Corporation and ACNB generally provide that the parties have the
power to indemnify any director, officer or employee, his or her heirs,
executors or administrators, and agents for expenses, judgments, decrees and any
liability incurred in actions to which the director, officer or employee is a
party, or potential party, by reason of the performance of his official duties,
assuming he conducted himself in good faith and reasonably believed his conduct
in his official capacity to be in the parties' best interest. Such
indemnification provisions do not apply in instances where such person acted in
bad faith or engaged in conduct against the interest of ACNB or Carolina First
Corporation. The governing documents of both Carolina First Corporation and
ACNB also provide that the respective companies have the power to pay premiums
for insurance covering certain liabilities of directors, officers and employees
to the extent such insurance is permitted under South Carolina corporations
laws.

PREEMPTIVE RIGHTS. The Articles of Association of ACNB provide that
shareholders have preemptive rights to purchase additional shares of ACNB's
stock upon any issuance by ACNB of additional shares thereof. Holders of CFC
common stock have no preemptive rights.

<PAGE>

ASSESSMENT. Under the National Bank Act, if the capital stock of a national
bank (such as ACNB) is impaired, by losses or otherwise, the OCC is authorized
to seek payment of the deficiency by assessment upon its shareholders, pro rata,
but the assessment is only enforceable by selling the stock of any shareholder
who does not pay the assessment. There are no assessment provisions applicable
to CFC common stock.

CONVERSION; REDEMPTION; SINKING FUND. Neither CFC common stock nor ACNB
common stock is convertible, redeemable nor entitled to any sinking fund.

LIQUIDATION RIGHTS. In the event of the liquidation, dissolution or
winding-up of the affairs of ACNB, holders of outstanding shares of ACNB common
stock are entitled to share, in proportion to their respective interests, in
ACNB's assets and funds remaining after payment, or provision for payment, of
all debts and other liabilities of ACNB. In the event of the liquidation,
dissolution or winding-up of the affairs of Carolina First Corporation, holders
of CFC common stock are entitled to share, pro rata, in Carolina First
Corporation's assets and funds remaining after payment, or provision for
payment, of all debts and other liabilities of Carolina First Corporation, and
after payment of all amounts due to holders of Preferred Stock upon liquidation.

DIVIDENDS. Holders of ACNB common stock and CFC common stock are entitled
to receive such dividends as the respective Board of Directors may declare out
of funds legally available therefor. However, the payment of dividends by ACNB
is currently subject to the restrictions of the OCC Consent Agreement. These
restrictions are described under "INFORMATION ABOUT ACNB - Supervision and
Regulation of ACNB - Payment of Dividends."

AMENDMENT. ACNB's Articles of Association provide that they may be amended
by the affirmative vote of a majority of ACNB's shareholders, unless a greater
vote is required by law. Carolina First Corporation's Articles of Incorporation
generally may be amended only upon the approval of holders of two-thirds of the
votes outstanding, and in certain circumstances, such two-thirds requirement is
increased to 80%.

ANTI-TAKEOVER MEASURES. ACNB has not implemented any material anti-
takeover measures. By contrast, Carolina First Corporation has implemented a
number of provisions which have the effect of impeding a takeover of Carolina
First Corporation that is not favored by Carolina First Corporation management.
See "CAROLINA FIRST CORPORATION CAPITAL STOCK." Furthermore, South Carolina law
has business combination and control share acquisition statutes which may serve
to impede takeovers not favored by management.

The South Carolina control share statute provides that upon the acquisition
by a person of certain threshold percentages of stock (20%, 33% and 50%), a
shareholders' meeting must be held in order to determine whether or not to
confer voting rights upon such acquiring person's shares. An affirmative vote
of holders of a majority of all outstanding company stock (excluding shares held
by the acquiring person, company officers and company employees who are also
directors of the company) is required to confer voting rights upon such
acquiring person's shares.

The South Carolina business combinations statute provides that a 10% or
greater shareholder of a resident domestic corporation cannot engage in a
"business combination" (as defined in the statute) with such corporation for a
period of two years following the date on which the 10% shareholder became such,
unless the business combination or the acquisition of shares is approved by a
majority of the disinterested members of such corporation's board of directors
before the 10% shareholder's share acquisition date. This statute further
provides that at no time (even after the two-year period subsequent to such
share acquisition date) may the 10% shareholder engage in a business combination
with the relevant corporation unless certain approvals of the board of directors
or disinterested shareholders are obtained or unless the consideration given in
the combination meets certain minimum standards set forth in the statute.

There are no comparable federal statutes which are applicable to ACNB.

79
<PAGE>

CAROLINA FIRST CORPORATION CAPITAL STOCK

COMMON STOCK

Carolina First Corporation has 20,000,000 shares of common stock
authorized, of which 4,581,247 shares of common stock were outstanding as of
January 16, 1995. The holders of the CFC common stock are entitled to dividends
when, as and if declared by the Board of Directors in their discretion out of
funds legally available therefor. The principal source of funds for Carolina
First Corporation is dividends from its subsidiaries. Carolina First
Corporation's subsidiaries are subject to certain legal restrictions on the
amount of dividends they are permitted to pay. See "INFORMATION ABOUT CAROLINA
FIRST CORPORATION - Certain Regulatory Matters." All outstanding shares of CFC
common stock are fully paid and nonassessable. No holder of CFC common stock
has any redemption or sinking fund privileges, any preemptive or other rights to
subscribe for any other shares or securities, or any conversion rights. In the
event of liquidation, the holders of CFC common stock are entitled to receive
pro rata any assets distributable to stockholders in respect of shares held by
them, subject to the rights of any holders of the Series 1993 Preferred Stock,
the Series 1993B Preferred Stock, Series 1994 Preferred Stock, and any other
senior stock which may be issued in the future (although no such issuance is
currently contemplated). Holders of the CFC common stock are entitled to one
vote per share.

PREFERRED STOCK

Carolina First Corporation has 10,000,000 shares of "blank check" preferred
stock authorized (the "Preferred Stock"), of which 621,000 shares of Series 1993
Preferred Stock, 60,000 shares of Series 1993B Preferred Stock and 920,000
shares of Series 1994 Preferred Stock were authorized and outstanding at January
16, 1995. Carolina First Corporation's Board of Directors has the sole
authority, without stockholder vote, to issue shares of authorized but unissued
Preferred Stock to whomever and for whatever purposes it, in its sole
discretion, deems appropriate. The relative rights, preferences and limitations
of the Preferred Stock are determined by Carolina First Corporation's Board of
Directors in its sole discretion. Among other things, the Board may designate
with respect to the Preferred Stock, without further action of the stockholders
of Carolina First Corporation, the dividend rate and whether dividends shall be
cumulative or participating or possess other special rights, the voting rights,
Carolina First Corporation's rights and terms of redemption, the liquidation
preferences, any rights of conversion and any terms related thereto, and the
price or other consideration for which the Preferred Stock shall be issued. The
Preferred Stock could be utilized by Carolina First Corporation to impede the
ability of third parties who attempt to acquire control of Carolina First
Corporation without the cooperation of Carolina First Corporation's Board of
Directors.

A summary of the provisions of the outstanding series of Preferred Stock is
set forth below under "--Terms of the Preferred Stock."

STOCKHOLDERS' RIGHTS AGREEMENT

On November 9, 1993, the Board of Directors adopted a Shareholders' Rights
Agreement (the "Rights Agreement"). Pursuant to the Rights Agreement, on
November 9, 1993, the Board of Directors declared a dividend distribution to
stockholders of record at the close of business on November 24, 1993 of one
common stock purchase right (a "Right") for each outstanding share of CFC common
stock. Each Right entitles the registered holder to purchase from Carolina
First Corporation one-half share of CFC common stock at a cash exercise price of
$18.00, subject to adjustment.

Initially, the Rights are not exercisable and are attached to all
outstanding shares of CFC common stock (including to all shares of common stock
issued after November 24, 1993). No separate Right Certificates have been or
will be distributed. The Rights will separate from the CFC common stock and a
"Distribution Date" will

<PAGE>

occur upon the earliest of (i) 10 days following a public announcement that a
person or group of affiliated or associated persons (an "Acquiring Person") has
acquired beneficial ownership of 20% or more of the outstanding shares of CFC
common stock (the date of said announcement being referred to as the "Share
Acquisition Date") and (ii) 10 business days following the commencement of a
tender offer or exchange offer that would result in a person or group owning
20% or more of the outstanding shares of CFC common stock. Until the
Distribution Date, (i) the Rights will be evidenced by the CFC common stock
certificates and will be transferred with and only with such certificates, (ii)
new CFC common stock certificates issued after November 24, 1993 will contain a
notation incorporating the Rights Agreement by reference, and (iii) the
surrender for transfer of any certificates for CFC common stock will also
constitute the transfer of the Rights associated with the CFC common stock
represented by such certificate. The Rights are not exercisable until the
Distribution Date and will expire at the close of business on November 24,
2003, unless previously redeemed by Carolina First Corporation as described
below. As soon as practicable after the Distribution Date, Right Certificates
will be mailed to holders of record of CFC common stock as of the close of
business on the Distribution Date and, thereafter, the separate Right
Certificates alone will represent the Rights. Except as otherwise determined
by the Board of Directors, only shares of CFC common stock issued prior to the
Distribution Date will be issued with Rights.

ln the event that (i) a Person acquires beneficial ownership of 20% or more
of the CFC common stock, (ii) Carolina First Corporation is the surviving
corporation in a merger with an Acquiring Person or any Affiliate or Associate
(as defined in the Rights Agreement) and the CFC common stock is not changed or
exchanged, (iii) an Acquiring Person engages in one of a number of self-dealing
transactions specified in the Rights Agreement, or (iv) an event occurs which
results in an Acquiring Person's ownership interest being increased by more than
1% (e.g., a reverse stock split), proper provision will be made so that each
holder of a Right will thereafter have the right to receive upon exercise
thereof at the then current exercise price, that number of shares of CFC common
stock (or in certain circumstances, cash, property, or other securities of
Carolina First Corporation) having a market value of two times such exercise
price. However, the Rights are not exercisable following the occurrence of any
of the events set forth above until such time as the Rights are no longer
redeemable as set forth below. Notwithstanding any of the foregoing, Rights
that are or were beneficially owned by an Acquiring Person shall become null and
void. In the event that following the Share Acquisition Date, (i) Carolina First
Corporation is acquired in a merger or other business combination transaction,
or (ii) 50% or more of Carolina First Corporation's assets or earning power is
sold, each holder of a Right shall thereafter have the right to receive, upon
exercise, common stock of the acquiring company having a market value equal to
two times the exercise price of the Right. At any time after any person becomes
an Acquiring Person and prior to such time such Person, together with its
Affiliates and Associates, becomes the Beneficial Owner of 50% or more of the
outstanding CFC common stock, the Board of Directors may exchange the Rights
(other than Rights which have become void), in whole or in part, at the exchange
rate of one share of CFC common stock per Right, subject to adjustment as
provided in the Rights Agreement.

The exercise price payable, and the number of shares of CFC common stock or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the CFC
common stock, (ii) if holders of the CFC common stock are granted certain rights
or warrants to subscribe for CFC common stock or securities convertible into CFC
common stock at less than the current market price of the CFC common stock, or
(iii) upon the distribution to holders of the CFC common stock of evidence of
indebtedness or assets (excluding regular quarterly cash dividends) or of
subscription rights or warrants (other than those referred to above).

The Rights may be redeemed in whole, but not in part, at a price of $.001
per Right (payable in cash, CFC common stock or other consideration deemed
appropriate by the Board of Directors) by the Board of Directors at any time
prior to the close of business on the tenth day after the Share Acquisition Date
or the final expiration Date of the Rights (whichever is earlier); provided that
under certain circumstances, the Rights may not be redeemed unless there are
Disinterested Directors (as defined in the Rights Agreement) in office and such
redemption is approved by a majority of such Disinterested Directors. After the
redemption period has expired, Carolina First Corporation's right of redemption
may be reinstated upon the approval of the Board of Directors if an Acquiring

<PAGE>
Person reduces his beneficial ownership to 15% or less of the outstanding shares
of CFC common stock in transaction or series of transactions not involving
Carolina First Corporation and there are no other Acquiring
Persons. Immediately upon the action of the Board of Directors ordering
redemption of the Rights, the Rights will terminate and thereafter the only
right of the holders of Rights will be to receive the redemption price.

Any of the provisions of the Rights Agreement may be amended by the Board
of Directors of Carolina First Corporation prior to the Distribution Date.
After the Distribution Date, the provisions of the Rights Agreement, other than
those relating to the principal economic terms of the Rights, may be amended by
the Board to cure any ambiguity, defect or inconsistency, to make changes which
do not adversely affect the interests of holders of Rights (excluding the
interests of any Acquiring Person), or to shorten or lengthen any time period
under the Rights Agreement. Amendments adjusting time periods may, under
certain circumstances, require the approval of a majority of Disinterested
Directors, or otherwise be limited. This summary description of the Rights does
not purport to be complete and is qualified in its entirety by reference to the
Shareholder Rights Agreement.

MANAGEMENT CONTRACTS

Carolina First Corporation has entered into Noncompetition, Severance and
Employment Agreements with Mack I. Whittle, Jr., William S. Hummers III and
James W. Terry, Jr. These agreements set forth general provisions regarding
compensation, confidentiality, termination and noncompetition. However, they
also provide that in the event that the named executive's employment with
Carolina First Corporation is voluntarily or involuntarily terminated after a
"change in control" (as defined in such agreement), then, except in very limited
instances, the named executive becomes entitled to receive immediately amounts
substantially equal to three years' compensation (including bonus compensation).

BOARD OF DIRECTORS

CLASSIFICATION OF BOARD OF DIRECTORS. Carolina First Corporation's Board
of Directors currently consists of twelve persons. In accordance with the
Articles of Incorporation, whenever the Board consists of nine or more persons,
the Board shall be divided into three classes of directors (with each class
having as close to an equal number as possible). The members of each class are
elected for staggered three-year terms. The staggering of Board terms has the
effect of making it more difficult to remove current Directors than would
otherwise be the case. In addition, Carolina First Corporation's Articles of
Incorporation require the affirmative vote of the holders of not less than 80%
of the outstanding voting securities of Carolina First Corporation to remove any
Director without cause. Accordingly, unless holders of 80% of the outstanding
CFC common stock vote to remove one or more Directors, it would take three
annual meetings for shareholders to change the composition of the Board. See "-
- -Removal of Directors".

LIMITATION OF DIRECTOR LIABILITY. The directors of Carolina First
Corporation are exempt under Carolina First Corporation's Articles of
Incorporation from personal monetary liability to the extent permitted by
Section 33-2-102(e) of the South Carolina Business Corporation Act of 1988, as
amended. This statutory provision provides that a director of the corporation
shall not be personally liable to the corporation or any of its shareholders for
monetary damages for breach of fiduciary duty as a director, provided that this
provision shall not be deemed to eliminate or limit the liability of a director
(i) for any breach of the director's duty of loyalty to the corporation or its
stockholders, (ii) for acts or omissions not in good faith or which involved
gross negligence, intentional misconduct, or a knowing violation of law, (iii)
imposed under Section 33-8-330 of the South Carolina Business Corporation Act of
1988 (improper distribution to shareholder), or (iv) for any transaction from
which the director derived an improper personal benefit.

REMOVAL OF DIRECTORS. Carolina First Corporation's Articles of
Incorporation require the affirmative vote of the holders of not less than 80%
of the outstanding voting securities of Carolina First Corporation to remove any

<PAGE>

Director or the entire Board of Directors without cause. Carolina First
Corporation's Articles of Incorporation also provide that any stockholder
entitled to vote for the election of directors may make nominations for the
election of directors only by giving written notice to the Secretary of
Carolina First Corporation at least 30 days but not more than 60 days prior to
the annual meeting of stockholders at which directors are to be elected, unless
such requirement is waived in advance of the meeting by the Board of Directors.

EVALUATION OF PROPOSED BUSINESS COMBINATIONS. Carolina First Corporation's
Articles of Incorporation provide that the Board of Directors, when evaluating
any proposed business combination with Carolina First Corporation, shall give
due consideration to (i) all relevant factors, including without limitation, the
social, legal, environmental and economic effects on the employees, customers,
suppliers and other constituencies of Carolina First Corporation, and on its
subsidiaries, the communities and geographical areas in which Carolina First
Corporation and its subsidiaries operate or are located, and on any of the
businesses and properties of Carolina First Corporation or any of its
subsidiaries, as well as such other factors as the directors deem relevant, and
(ii) not only the consideration being offered in relation to the then current
market price for Carolina First Corporation's outstanding shares, but also in
relation to the then current value of Carolina First Corporation in a freely-
negotiated transaction and in relation to the Board of Directors' estimate of
the future value of Carolina First Corporation (including the unrealized value
of its properties and assets) as an independent going concern.

VOTING

NONCUMULATIVE VOTING. Carolina First Corporation's Articles of
Incorporation provide that stockholders may not cumulate votes for the election
of directors. Accordingly, holders of more than 50% of the shares voting at the
election of directors can elect all of the directors if they choose to do so
and, in such event, the holders of the remaining shares (less than 50%) voting
are not able to elect any board members.

SUPERMAJORITY VOTING REQUIREMENTS. Carolina First Corporation's Articles
of Incorporation require the affirmative vote of holders of at least 80% of the
outstanding stock of Carolina First Corporation entitled to vote for approval
before Carolina First Corporation may (a) merge or consolidate with any other
corporation, (b) sell or exchange all or a substantial part of its assets to or
with any other corporation, or (c) issue or deliver any stock or other
securities of its issue in exchange or payment for any properties or assets of
any other corporation, or securities issued by any other corporation, or in a
merger of any subsidiary of Carolina First Corporation with or into any other
corporation (the foregoing being hereinafter referred to as a "business
combination"). This 80% supermajority is reduced to the percentage required by
applicable law if such business combination was approved (or adopted) and
recommended without condition by the affirmative vote of at least 80% of the
directors. The Articles of Incorporation expressly permit the Board of
Directors to condition its approval (or adoption) of any business combination
upon the approval of holders of 80% of the outstanding stock of Carolina First
Corporation entitled to vote on such business combination. The 80%
supermajority provision is not applicable to any transaction solely between
Carolina First Corporation and another corporation, 50% or more of the voting
stock of which is owned by Carolina First Corporation. Under present South
Carolina law, a merger or the sale of substantially all the assets requires the
affirmative approval of holders of two-thirds of the outstanding shares entitled
to vote. The amendment of the foregoing business combination provisions
requires the approval of holders of 80% of the outstanding stock entitled to
vote. The foregoing supermajority voting provision could impede the ability of
third parties who attempt to acquire control of Carolina First Corporation
without the cooperation of Carolina First Corporation's Board of Directors.

CONTROL SHARE ACQUISITION / BUSINESS COMBINATION STATUTES

South Carolina Corporations Law has business combination and control share
acquisition statutes which may serve to impede takeovers not favored by
management. These statutes are summarized above in "--Comparison of CFC Common
Stock and ACNB Common Stock."

<PAGE>

TRANSFER AGENT

The transfer agent for the CFC common stock is Carolina First Bank.

DIVIDEND REINVESTMENT PLANS

Carolina First Corporation has in place dividend reinvestment plans with
respect to its common stock, its Series 1993 Preferred Stock, and its Series
1994 Preferred Stock. As set forth in the plans, holders of such shares may
elect to receive CFC common stock in lieu of receiving the cash dividends to
which such holder may otherwise be entitled. These plans also provide for
purchases of CFC common stock through optional cash payments.

TERMS OF THE PREFERRED STOCK

SERIES 1994 PREFERRED STOCK. Holders of the Series 1994 Preferred Stock
are entitled to receive when, as and if declared by the Board of Directors in
their discretion, out of funds legally available therefor, quarterly
noncumulative cash dividends of approximately $0.46 per share. To date,
Carolina First Corporation has paid all regular dividends on the Series 1994
Preferred Stock and Carolina First Corporation intends to continue to pay the
regular cash dividends on the Series 1994 Preferred Stock unless prohibited by
Carolina First Corporation's regulatory authorities. Carolina First Corporation
may at any time after July 1, 1994, at the option of the Board of Directors,
redeem all or part of the outstanding shares of the Series 1994 Preferred Stock
upon the specified notice and upon receipt of approval of the Federal Reserve.
However, if Carolina First Corporation elects to redeem the Series 1994
Preferred Stock prior to 2001, Carolina First Corporation must pay a premium as
set forth in its Articles of Amendment establishing the Series 1994 Preferred
Stock. However, the Series 1994 Preferred Stock may not be redeemed prior to
July 1, 1997, unless, certain market price standards for the CFC common stock
are met, all as set forth in the Articles of Amendment establishing the Series
1994 Preferred Stock. The Series 1994 Preferred Stock is convertible at any
time at the option of the holder into fully-paid and nonassessable shares of CFC
common stock at a conversion price of $13.95 per share of CFC common stock
(equivalent to a conversion ratio of approximately 1.7931 shares of CFC common
stock for each share of Series 1994 Preferred Stock), subject to adjustment in
certain circumstances for equitable purposes. Holders of the Series 1994
Preferred Stock are entitled to vote on each matter on which holders of CFC
common stock are entitled to vote and are otherwise accorded all voting powers
and rights of CFC common stock. Each share of Series 1994 Preferred Stock has
the number of votes equal to the number of shares of CFC common stock into which
it is convertible. In the event of any liquidation, dissolution, or winding up
of Carolina First Corporation, the holders of shares of the Series 1994
Preferred Stock shall be entitled to be paid, out of the assets of Carolina
First Corporation available for distribution to its stockholders whether from
capital, surplus or earnings and before any payment shall be made in respect of
CFC common stock or on any other class of stock ranking junior to the Series
1994 Preferred Stock (but only after all amounts payable upon liquidation with
respect to the Series 1993 Preferred Stock and Series 1993B Preferred Stock have
been paid), an amount equal to $25.00 per share.

SERIES 1993 PREFERRED STOCK. Holders of the Series 1993 Preferred Stock
are entitled to receive when, as and if declared by the Board of Directors in
their discretion, out of funds legally available therefor, quarterly
noncumulative cash dividends of approximately $0.47 per share. To date,
Carolina First Corporation has paid all regular dividends on the Series 1993
Preferred Stock and Carolina First Corporation intends to continue to pay the
regular cash dividends on the Series 1993 Preferred Stock unless prohibited by
Carolina First Corporation's regulatory authorities. Carolina First Corporation
may at any time after July 1, 1993, at the option of the Board of Directors,
redeem all or part of the outstanding shares of the Series 1993 Preferred Stock
upon the specified notice and upon receipt of approval of the Federal Reserve.
However, if Carolina First Corporation elects to redeem the Series 1993
Preferred Stock prior to July 1, 2000, Carolina First Corporation must pay a
premium as set forth in its Articles of Amendment establishing the Series 1993
Preferred Stock. However, the Series 1993

<PAGE>

Preferred Stock may not be redeemed prior to July 1, 1996, unless, certain
market price standards for the CFC common stock are met, all as set forth in
the Articles of Amendment establishing the Series 1993 Preferred Stock. The
Series 1993 Preferred Stock is convertible at any time at the option of the
holder into fully-paid and nonassessable shares of CFC common stock at a
conversion price of $13.04 per share of CFC common stock (equivalent to a
conversion ratio of approximately 1.9173 shares of CFC common stock for each
share of Series 1993 Preferred Stock), subject to adjustment in certain
circumstances for equitable purposes. Holders of the Series 1993 Preferred
Stock are entitled to vote on each matter on which holders of CFC common stock
are entitled to vote and are otherwise accorded all voting powers and rights of
CFC common stock. Each share of Series 1993 Preferred Stock has the number of
votes equal to the number of shares of CFC common stock into which it is
convertible. In the event of any liquidation, dissolution, or winding up of
Carolina First Corporation, the holders of shares of the Series 1993 Preferred
Stock shall be entitled to be paid, out of the assets of Carolina First
Corporation available for distribution to its stockholders whether from
capital, surplus or earnings and before any payment shall be made in respect
of CFC common stock or on any other class of stock ranking junior to the Series
1993 Preferred Stock, an amount equal to $25.00 per share.

SERIES 1993B PREFERRED STOCK. Holders of the Series 1993B Preferred Stock
are entitled to receive when, as and if declared by the Board of Directors, in
their discretion, out of funds legally available therefor, quarterly cumulative
cash dividends of approximately $0.31 per share. The Series 1993B Preferred
Stock is subordinate to the Series 1993 Preferred Stock with respect to
dividends. The regular cash dividends on the Series 1993B Preferred Stock
cumulate, provided that current quarterly earnings are available for payment of
such regular cash dividends and assuming that all regular dividends on the
Series 1993 Preferred Stock for the current and all past quarters have been paid
in cash. The Series 1993B Preferred Stock is not subject to any prescribed
redemption provisions, but redemption may be otherwise effected as permitted by
applicable law. Each share of Series 1993B Preferred Stock may be converted at
any time after issuance, at the option of the holder, until January 31, 1997,
into 1.75 fully-paid and non-assessable shares of CFC common stock, subject to
equitable adjustment in certain circumstances and to adjustment based on certain
earnings goals, all as more particularly set forth in the Articles of Amendment
establishing the Series 1993B Preferred Stock. In the event that all
outstanding shares of Series 1993B Preferred Stock have not been converted by
February 1, 1997, on such date all remaining outstanding shares of the Series
1993B Preferred Stock shall be converted into CFC common stock in accordance
with the above-stated conversion ratio. Holders of the Series 1993B Preferred
Stock are entitled to vote on each matter on which holders of CFC common stock
are entitled to vote and are otherwise accorded all voting powers and rights of
CFC common stock. Each share of Series 1993B Preferred Stock has the number of
votes equal to the number of shares of CFC common stock into which it is
convertible. In the event of any liquidation, dissolution, or winding up of
Carolina First Corporation, the holders of shares of the Series 1993B Preferred
Stock shall be entitled to be paid, out of the assets of Carolina First
Corporation available for distribution to its stockholders whether from capital,
surplus or earnings and before any payment shall be made in respect of CFC
common stock or on any other class of stock ranking junior to the Series 1993B
Preferred Stock (but only after all amounts payable upon liquidation with
respect to the Series 1993 Preferred Stock have been paid), an amount equal to
$20.00 per share.

LEGAL MATTERS

Certain legal matters in connection with the Merger Agreement, including
the validity of the CFC Shares offered hereby, will be passed upon for Carolina
First Corporation by Wyche, Burgess, Freeman & Parham, P.A., Greenville, South
Carolina. Wyche, Burgess, Freeman & Parham, P.A. is also rendering a tax
opinion to ACNB regarding the Merger. As of January 16, 1995, members and
attorneys of Wyche, Burgess Freeman & Parham, P.A. beneficially owned a total of
38,300 shares of CFC common stock, 2,000 shares of Series 1993 Preferred Stock,
and 1,200 shares of Series 1994 Preferred Stock.

Certain legal matters in connection with the Merger Agreement will be
passed upon for ACNB by Sinkler & Boyd, P.A., Columbia, South Carolina.

<PAGE>

EXPERTS

The financial statements of ACNB as of and for each of the years in the
three-year period ended December 31, 1993, included in this Proxy
Statement/Prospectus have been so included in reliance on the reports of
Elliott, Davis & Company, LLP, independent certified public accountants,
appearing elsewhere herein, and upon the authority of said firm as experts in
auditing and accounting. Representatives of Elliott, Davis & Company are
expected to be present at the Special Meeting and will have the opportunity to
make a statement if they desire to do so and will be available to respond to
appropriate questions.

The consolidated financial statements of Carolina First Corporation as of
and for each of the years in the three-year period ended December 31, 1993,
incorporated by reference herein have been audited by Elliott, Davis & Company,
independent certified public accountants, and have been so incorporated by
reference on the reports of Elliott, Davis & Company appearing elsewhere herein,
and upon the authority of said firm as experts in auditing and accounting.

OTHER MATTERS

The Board of Directors of ACNB is not aware of any other matters which may
be presented for action at the Special Meeting, but if other matters do properly
come before the meeting, it is intended that the shares of ACNB common stock
represented by proxies in the accompanying form will be voted by the persons
named in the proxies in accordance with their best judgment.

<PAGE>

AIKEN COUNTY NATIONAL BANK

AIKEN, SOUTH CAROLINA

REPORT ON FINANCIAL STATEMENTS

For the three years in the period ended December 31, 1993

F-1
<PAGE>

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

The Board of Directors
Aiken County National Bank
Aiken, South Carolina

We have audited the accompanying balance sheets of Aiken County
National Bank as of December 31, 1993 and 1992, and the related
statements of income, shareholders' equity and cash flows for each of
the three years in the period ended December 31, 1993. These financial
statements are the responsibility of the Bank's management. Our
responsibility is to express an opinion on these financial statements
based on our audits.

We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position of
Aiken County National Bank at December 31, 1993 and 1992 and the
results of its operations and its cash flows for each of the three
years in the period ended December 31, 1993, in conformity with
generally accepted accounting principles.

ELLIOTT DAVIS & COMPANY, L.L.P.

January 14, 1994

F-2

<PAGE>

AIKEN COUNTY NATIONAL BANK
BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31,
1993 1992
<S> <C> <C>
ASSETS

CASH AND DUE FROM BANKS $1,385,312 $ 2,316,984
FEDERAL FUNDS SOLD 3,258,000 4,020,000

Total cash and cash equivalents 4,643,312 6,336,984
INVESTMENTS (market value of $7,114,505 and $5,504,224
at December 31, 1993 and 1992, respectively) - Note 2 7,001,584 5,345,459

LOANS (less allowance for loan losses of $582,323
and $621,278 at December 31, 1993 and 1992,
respectively) - Note 3 28,779,022 29,993,799
ACCRUED INTEREST RECEIVABLE 243,146 242,625

PREMISES AND EQUIPMENT - Net - Notes 4 and 6 1,576,189 1,597,979
OTHER REAL ESTATE OWNED 1,413,300 1,444,719

OTHER ASSETS 295,581 325,988
$43,952,134 $45,287,553

LIABILITIES AND SHAREHOLDERS' EQUITY

LIABILITIES
Deposits
Non-interest bearing $ 3,317,771 $ 3,506,267
Interest bearing - Note 5 36,774,173 37,924,673
40,091,944 41,430,940
Accrued interest on deposits 102,538 153,299
Obligations under capital leases - Note 6 24,423 55,054
Other 31,803 59,225

Total liabilities 40,250,708 41,698,518
COMMITMENTS AND CONTINGENCIES - Notes 7 and 12

SHAREHOLDERS' EQUITY - Note 12
Common stock, par value $5 per share, authorized
500,000 shares, issued 402,500 shares 2,012,500 2,012,500
Additional paid-in capital 1,985,117 1,985,117
Retained earnings (deficit) (296,191) (408,582)
Total shareholders' equity 3,701,426 3,589,035

$43,952,134 $45,287,553

</TABLE>

See Notes to Financial Statements which are an integral
part of these statements.

F-3
<PAGE>

AIKEN COUNTY NATIONAL BANK
STATEMENTS OF INCOME

<TABLE>
<CAPTION>
For the years ended December 31,
1993 1992 1991
<S> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans $2,526,344 $ 3,022,301 $3,200,406
Interest on investment securities 398,689 366,323 393,151
Interest on federal funds sold and deposits
in other banks 142,545 139,782 125,895
Total interest income 3,067,578 3,528,406 3,719,452
INTEREST EXPENSE ON DEPOSITS 1,437,329 1,978,826 2,290,741
Net interest income 1,630,249 1,549,580 1,428,711
PROVISION FOR LOAN LOSSES - Note 3 52,170 375,237 264,110

Net interest income after provision for
loan losses 1,578,079 1,174,343 1,164,601

OTHER INCOME
Service charges and fees 181,066 163,594 148,157
Credit life insurance commissions 13,684 16,987 21,561
Gain on sale of securities - 18,731 2,187
Other 16,459 35,993 15,498

211,209 235,305 187,403
OTHER EXPENSES
Salaries and employee benefits 744,080 673,548 592,161
Occupancy - net 86,181 82,045 72,085
Equipment 189,016 193,913 188,421
Other - Note 8 657,620 594,103 429,047

1,676,897 1,543,609 1,281,714

Income (loss) before income taxes 112,391 (133,961) 70,290
PROVISION FOR INCOME TAXES - Note 9 - - 11,789
Net income (loss) $ 112,391 $ (133,961) $ 58,501

NET INCOME (LOSS) PER SHARE $.28 $(.33) $ .15
</TABLE>

See Notes to Financial Statements which are an integral
part of these statements.

F-4
<PAGE>

AIKEN COUNTY NATIONAL BANK
STATEMENTS OF SHAREHOLDERS' EQUITY
For the years ended December 31, 1993, 1992, and 1991

<TABLE>
<CAPTION>
Additional Retained Total
Common paid-in earnings shareholders'
stock capital (deficit) equity

BALANCE, DECEMBER 31, 1990 $2,012,500 $1,985,117 $ (333,122) $3,664,495

Net income - - 58,501 58,501

BALANCE, DECEMBER 31, 1991 2,012,500 1,985,117 (274,621) 3,722,996

Net loss - - (133,961) (133,961)

BALANCE, DECEMBER 31, 1992 2,012,500 1,985,117 (408,582) 3,589,035

Net income - - 112,391 112,391

BALANCE, DECEMBER 31, 1993 $2,012,500 $1,985,117 $ (296,191) $3,701,426

</TABLE>

See Notes to Financial Statements which are an integral
part of these statements.

F-5

<PAGE>

AIKEN COUNTY NATIONAL BANK
STATEMENTS OF CASH FLOWS

For the years ended December 31,
1993 1992 1991
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income (loss) $ 112,391 $ (133,961) $ 58,501
Adjustments to reconcile net income (loss) to
net cash provided by operating activities
Depreciation and amortization 146,197 154,329 148,324
Provision for loan losses 52,170 375,237 264,110
Provision for loss on other real estate owned 15,000 - -
(Gain) loss on other real estate owned transactions 3,897 - 32,500
Amortization of investment security premiums and
accretion of discounts 984 (3,285) (4,253)
Realized investment securities gains - (18,731) (2,187)
(Increase) decrease in other assets and accrued
interest receivable 29,886 24,381 (23,711)
Increase (decrease) in other liabilities and
accrued interest payable (78,183) (170,775) 89,585
Net cash provided by operating activities 282,342 227,195 562,869
INVESTING ACTIVITIES
Net decrease in interest-bearing deposits in
other banks - 95,000 196,000
Proceeds from investments sold, called
or matured 1,692,329 4,718,701 1,104,725
Purchase of investments (3,349,438) (5,502,966) (1,100,000)
Net (increase) decrease in loans 1,080,273 1,959,069 (8,780,744)
Proceeds from sale of foreclosed property 94,856 - -
Purchase of equipment (47,673) (46,564) (14,761)
Net cash provided by (used for)
investing activities (529,653) 1,223,240 (8,594,780)

FINANCING ACTIVITIES
Net increase in deposits 1,610,249 5,369,560 3,296,011
Net increase (decrease) in certificates
of deposit (2,949,245) (5,787,796) 7,017,081
Repayment of obligations under capital leases (107,365) (105,160) (97,629)
Net cash provided by (used for) financing
activities (1,446,461) (523,396) 10,215,463
Net increase in cash and cash equivalents (1,693,672) 927,039 2,183,552

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 6,336,984 5,409,945 3,226,393
CASH AND CASH EQUIVALENTS AT END OF YEAR $4,643,312 $ 6,336,984 $ 5,409,945

CASH PAID (RECEIVED) FOR
Interest $ 1,488,090 $ 2,405,852 $ 2,307,855
Income taxes $ (105,557) $ 140,384 $ 10,893

NONCASH INVESTING ACTIVITY
Additions to other real estate owned $ 89,907 $ 693,762 $ 783,457
Acquisitions of equipment under capital lease 76,734 - -

$ 166,641 $ 693,762 $ 783,457

</TABLE>

See Notes to Financial Statements which are an integral part of
these statements.

F-6

<PAGE>

AIKEN COUNTY NATIONAL BANK
NOTES TO FINANCIAL STATEMENTS

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Concentrations of credit risk

The Bank makes loans to individuals and businesses located
primarily in Aiken County, South Carolina for various personal and
commercial purposes. The Bank has a diversified loan portfolio and the
borrowers' ability to repay their loans is not dependent upon any
specific economic segment.

Investments

The accounting for debt securities held as assets is dependent
upon their classification as investments, trading assets or assets held
for sale. Such assets classified as investments are carried at cost,
adjusted for the amortization of premiums and the accretion of
discounts which are recognized as adjustments to interest income
using the level yield method. Trading assets are carried at current
market values and those debt securities held for sale are carried at
the lower of amortized cost or market value. In order to qualify
as investment assets, the Company must have the ability to hold the
securities to maturity and a positive intention to hold them for
the foreseeable future. Management utilizes these criteria in
determining the accounting treatment accorded such securities. The Bank
considers all debt securities acquired to date to be investment
assets. Gains or losses on dispositions are based on the difference
between the net proceeds and the adjusted carrying amount of the
securities sold, using the specific identification method.

Loans

Loans are placed on a non-accrual basis when they become 90 days
past due as to either principal or interest, or when in the opinion of
management, full collection of principal or interest is unlikely. When
the loan is placed on non-accrual, the accrual of interest is
discontinued and previously recorded but unpaid interest is reversed
and charged against current earnings.

Allowance for loan losses

The allowance for loan losses is based on management's ongoing
evaluation of the loan portfolio and reflects an amount that, in
management's opinion, is adequate to absorb losses in the existing
portfolio. In evaluating the portfolio, management takes into
consideration numerous factors, including current economic
conditions, prior loan loss experience, the composition of the loan
portfolio, and management's estimate of anticipated credit losses.
Loans are charged against the allowance at such time as they are
determined to be losses. Subsequent recoveries are credited to the
allowance. Management considers the year-end allowance appropriate
and adequate to cover possible losses in the loan portfolio;
however, management's judgment is based upon a number of assumptions
about future events, which are believed to be reasonable, but which
may or may not prove valid. Thus, there can be no assurance that
charge-offs in future periods will not exceed the allowance for loan
losses or that additional increases in the allowance for loan losses
will not be required.

Other real estate owned (OREO)

OREO includes properties acquired in satisfaction of debt and loans
considered to be in substance foreclosures. The properties are carried
at the lower of cost or fair market value. Reductions in carrying
value are recognized through charges to other operating expenses. The
costs of maintaining and operating foreclosed properties are expensed
as incurred.

Premises and equipment

Premises and equipment are stated at cost less accumulated
depreciation and amortization. Depreciation and amortization are
computed on a straight-line basis over the estimated useful lives of
the assets and on an accelerated basis for tax purposes. The
estimated useful lives range from five to twelve years for furniture
and equipment and thirty-one years for buildings.

Income taxes

Effective January 1, 1992, the Bank adopted the provisions of Statement
of Financial Accounting Standards ("SFAS") No. 109, "Accounting for
Income Taxes". SFAS 109 replaces SFAS 96 beginning in 1993, with
early implementation permitted. The Bank previously accounted for
income taxes in accordance with Accounting Principles Board Statement
Number 23. The impact of the adoption of SFAS 109 is not considered to
be material and thus is not separately presented as a change in
accounting principle.

(Continued)

F-7

<PAGE>

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued

Net income (loss) per share

Net income (loss) per share is computed on the basis of the weighted
average number of common shares outstanding during the period. The
weighted average number of shares outstanding during the years ended
December 31, 1993, 1992 and 1991 was 402,500.

Cash and cash equivalents

For purposes of the Statements of Cash Flows, cash and cash equivalents
are defined as cash working funds and federal funds sold.

Recently issued accounting standards

The Financial Accounting Standards Board has issued Statements
of Financial Accounting Standards Nos. 106, 107 and 112. SFAS 106,
titled "Employers' Accounting for Postretirement Benefits Other Than
Pensions" is effective for calendar year 1993 and requires the accrual
of postretirement benefits over the expected service terms of
employees. SFAS 107, titled "Disclosures about Fair Value of
Financial Instruments" is effective for calendar year 1992, except for
entities with less than $150 million in total assets. For those
entities, the effective date shall be for financial statements for
calendar year 1995. SFAS 107 requires disclosure of fair value of
financial instruments for which it is practicable to estimate that
value. SFAS 112, titled "Employers' Accounting for Postemployment
Benefits", is effective for calendar year 1994 and requires the accrual
of benefits to be paid to employees after employment but before
retirement. The Bank does not currently pay postretirement or
postemployment benefits and thus SFAS 106 and 112 are not expected to
have a material impact on the Bank's financial statements.

Reclassifications

Certain items in the financial statements for 1992 and 1991 have been
reclassified to conform with the presentation for 1993. Such
reclassifications had no effect on the net results of operations.

NOTE 2 - INVESTMENTS

A comparison of the carrying value and approximate fair value
of the Bank's investments is as follows:

<TABLE>
<CAPTION>
DECEMBER 31, 1993
Carrying Unrealized
value Gains Losses Fair value
<S> <C> <C> <C> <C>
U. S. Treasury Obligations $ 797,085 $ 59,806 $ - $ 856,891
U. S. Government Agency Obligations 6,204,499 55,583 2,468 6,257,614

$7,001,584 $ 115,389 $2,468 $ 7,114,505

DECEMBER 31, 1992
Carrying Unrealized
value Gains Losses Fair value

U. S. Treasury Obligations $1,843,132 $ 92,790 $ - $ 1,935,922
U. S. Government Agency Obligations 3,502,327 65,975 - 3,568,302

$5,345,459 $ 158,765 $ - $ 5,504,2244

</TABLE>

(Continued)

F-8

<PAGE>

NOTE 2 - INVESTMENTS, Continued

The carrying value and fair value of investments at December
31, 1993 by contractual maturity are as follows:

<TABLE>
<CAPTION>
Carrying
value Fair value
<S> <C> <C>

Due in one year or less $ 400,000 $ 408,438
Due in one year through five years 4,147,951 4,234,747
Due from five years to ten years 498,531 507,500
Due after ten years 1,955,102 1,963,820

$7,001,584 $7,114,505
</TABLE>

Proceeds from the sale of investments were $1,692,329, $4,718,701
and $204,725, resulting in realized gains of none, $18,731 and $2,187
for the years ended December 31, 1993, 1992 and 1991, respectively.

U. S. Government and U. S. Government agency obligations of
$300,000 were pledged to secure deposits and public funds at December
31, 1993.

NOTE 3 - LOANS

Loans consisted of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
1993 1992
<S> <C> <C>

Commercial and agricultural $9,777,333 $ 9,109,917
Real estate construction 1,569,111 2,077,734
Real estate mortgage 3,132,993 3,206,443
Installment and consumer 10,056,644 11,313,143
Other 4,825,264 4,907,840

29,361,345 30,615,077
Less allowance for loan losses 582,323 621,278

Net loans $28,779,022 $29,993,799
</TABLE>

Non-accrual loan information is as follows:

DECEMBER 31,
1993 1992
<S> <C> <C>

Non-accrual loans $1,539,110 $1,628,565
Interest revenue under original terms $ 289,190 $ 173,313

Interest revenue recognized $ - $-
</TABLE>

Changes in the allowance for loan losses are summarized as follows:

DECEMBER 31,
1993 1992 1991
<S> <C> <C> <C>

Balance at beginning of year $621,278 $ 507,652 $ 327,546
Provision for loan losses 52,170 375,237 264,110
Loan charge-offs (114,166) (290,377) (84,339)
Recoveries 23,041 28,766 335

Balance at end of year $582,323 $ 621,278 $ 507,652
</TABLE>

F-9

<PAGE>

NOTE 4 - PREMISES AND EQUIPMENT

Premises and equipment at December 31, is summarized as follows:

<TABLE>
<CAPTION>
1993 1992
<S> <C> <C>
Land $ 550,800 $ 550,800
Building 742,437 742,437
Furniture, fixtures and equipment 1,023,775 899,599
2,317,012 2,192,836
Less accumulated depreciation 740,823 594,857

$1,576,189 $1,597,979

</TABLE>

Depreciation expense, including amortization of leased property,
for the years ended December 31, 1993, 1992 and 1991 was
$146,197, $154,329 and $148,324, respectively.

NOTE 5 - DEPOSITS

At December 31, 1993 and 1992, deposits of $100,000 or more
included in time deposits totaled approximately $2,762,000 and
$2,660,000, respectively.

NOTE 6 - CAPITAL LEASES

The Bank utilizes various leased furniture and equipment in its
operations. The leases have terms of five years and are classified as
capital leases. The present value of minimum lease payments under
capital leases due during 1994 is $24,423, net of $1,454 of interest.

NOTE 7 - COMMITMENTS AND CONTINGENCIES

The Bank is a party to financial instruments with
off-balance-sheet risk in the normal course of business to meet the
financing needs of its customers. These financial instruments
include commitments to extend credit and standby letters of credit.
Those instruments involve, to varying degrees, elements of credit
risk in excess of the amount recognized in the balance sheet. The
Bank's exposure to credit loss in the event of nonperformance by the
other party to the financial instrument is essentially the same as
that involved in extending loan facilities to customers. The Bank
uses the same credit policies in making commitments and conditional
obligations as it does for on-balance-sheet instruments.

Commitments to extend credit are agreements to lend to a
customer as long as there is no violation of any condition
established in the contract. Commitments generally have fixed
expiration dates or other termination clauses and may require payment
of a fee. Since many of the commitments are expected to expire without
being drawn upon, the total commitment amounts do not necessarily
represent future cash requirements. The amount of collateral obtained
if deemed necessary by the Bank upon extension of credit is based on
management's credit evaluation of the counterparty. Collateral held
varies but may include accounts receivable, inventory, property, plant
and equipment, and income-producing commercial properties.
Commitments to extend credit, including unused lines of credit,
amounted to $1,840,088 at December 31, 1993.

Standby letters of credit are conditional commitments issued by
the Bank to guarantee the performance of a customer to a third party.
Commitments under standby letters of credit amounted to $183,925 at
December 31, 1993.

The Bank had available a $1,000,000 line of credit as of December
31, 1993. No amounts had been drawn on this line.

F-10
(Continued)

<PAGE>

NOTE 7 - COMMITMENTS AND CONTINGENCIES, Continued

The Bank is party to litigation and claims arising in the
normal course of business. Management, after consultation with
legal counsel, believes that the liabilities, if any, arising from
such litigation and claims will not be material to the Bank's
financial position.

NOTE 8 - OTHER EXPENSES

A summary of the components of other expenses is as follows:

For the years ended December 31,
1993 1992 1991
<S> <C> <C> <C>

Advertising $ 23,885 $ 14,107 $17,951
Printing, stationery and supplies 62,690 46,490 34,952
Legal and professional fees 112,755 98,701 8,637
Director fees 1,500 80,700 44,700
Insurance 29,685 26,887 27,428
Automatic teller machine (ATM) charges 23,692 29,839 30,115
FDIC and Comptroller of Currency fees 124,873 115,132 85,901
Telephone 21,106 18,828 17,544
Loss on other real estate owned 69,730 - 32,500
Other 187,704 163,419 129,319

$ 657,620 $ 594,103 $ 429,047
</TABLE>

NOTE 9 - INCOME TAXES

The provision for income taxes is as follows:

For the years ended December 31,
1993 1992 1991
<S> <C> <C> <C>

Income taxes payable (refundable) $ (45,124) $ (37,493) $ 88,001
Deferred income taxes 45,124 37,493 (76,212)

Provision for income taxes $ - $ - $ 11,789
</TABLE>

The provision for income taxes as of December 31, 1993 is
reconciled to the amount of income taxes computed at the federal
statutory rate as follows:

Amount Percent
<S> <C> <C>
Tax expense at statutory rates $ 44,138 34%
Reduction in taxes resulting from
Surtax rate reduction (11,750) (9)
Organizational costs (8,588) (7)
Other, net (23,800) (18)

Provision for income taxes $ - -%

</TABLE>

F-11 (Continued)

<PAGE>

NOTE 9 - INCOME TAXES

The deferred income tax assets and liabilities at December 31, 1993
and 1992, consists of the following:

1993 1992
Deferred Deferred
tax asset tax asset
(liability) (liability)
<S> <C> <C>

Bad debts $ 92,673 $98,067
Depreciation (27,868) (26,916)
Cash basis adjustment (31,113) (10,610)
Net operating loss carryforward 6,300 -
Other net 945 16,889
40,937 77,430
Valuation allowance (40,937) (32,306)

Deferred taxes $ - $45,124
</TABLE>

Included in other assets is approximately $21,194
representing refundable federal income taxes as a result of the
carryback of the 1993 loss to 1991.

At December 31, 1993, the Bank had net operating loss
carryforwards of $42,000 for tax purposes, which expire in 1998.

NOTE 10 - RELATED PARTY TRANSACTIONS

Certain officers, directors, employees and companies in which
they have ten percent or more beneficial ownership, were indebted
to the Bank in the amount of $1,550,390 and $1,652,615 as of
December 31, 1993 and 1992, respectively. Loans to these parties
are made on substantially the same terms as those prevailing at the time
for comparable transactions with unaffiliated persons and, in
the opinion of management, do not involve more than the normal risk
of collectibility. An analysis of the activity for related party loans
is summarized as follows:

For the years ended
December 31,
1993 1992
<S> <C> <C>
Balance, beginning of year $1,652,615 $1,889,841
Loan advances 2,251,623 268,002
Loan repayments (2,598,757) (284,216)
Other changes 244,909 (221,012)

Balance, end of year $1,550,390 $1,652,615
</TABLE>

NOTE 11 - EMPLOYEE BENEFIT PLAN

The Bank maintains an Employee Savings Plan qualified under
Section 401(k) of the Internal Revenue Code. The Bank matches
employee contributions at 50 percent, up to 6.0 percent of salary.
Employees of the Bank with one or more years service are eligible to
participate in the Plan. The amount charged to expense was
$9,029, $11,992 and $11,498 for 1993, 1992 and 1991, respectively.
The Plan also has a provision for discretionary profit-sharing
upon the approval by the Board of Directors, should certain
profitability goals be attained. No contributions were made in 1993
and 1992 and $8,704 was contributed for 1991.

F-12
<PAGE>

NOTE 12 - REGULATORY MATTERS

The Bank is currently operating under regulatory supervision
through an agreement between the Board of Directors and the Office
of the Comptroller of the Currency. The agreement requires the Board
to make certain changes and improvements in the areas of credit
administration, loan underwriting, internal controls and regulatory
compliance and to decrease the level of classified and nonperforming
loans. To date, the Board is in partial compliance with the regulatory
agreement.

The Bank is subject to the dividend restrictions set forth by
the Comptroller of the Currency. Under such restrictions, the
Bank may not, without the prior approval of the Comptroller of the
Currency, declare dividends in excess of the sum of the current year's
earnings, as defined, plus the retained earnings, as defined, from the
prior two years. At December 31, 1993, the Bank could not declare
dividends without approval of the Comptroller of the Currency.

The Bank is required to maintain minimum levels of capital. At
December 31, 1993, the Bank was in compliance with its regulatory
capital requirements. The Bank is also required by the Federal
Reserve Bank to maintain average cash reserve balances at the Federal
Reserve Bank and in working funds.

F-13

<PAGE>

APPENDIX A

REORGANIZATION AGREEMENT BY AND BETWEEN CAROLINA FIRST CORPORATION,
CAROLINA FIRST BANK, AND AIKEN COUNTY NATIONAL BANK
Dated as of October 13, 1994.

This REORGANIZATION AGREEMENT is entered into as of this 13th day
of October, 1994 among Carolina First Corporation ("CFC"), a
corporation organized and existing under the laws of the State of
South Carolina, Carolina First Bank ("CFB"), a corporation organized
and existing under the laws of the State of South Carolina, and
Aiken County National Bank ("ACNB"), a national banking association
organized and existing under the laws of the United States of America.

WHEREAS, CFC desires to acquire ACNB through the merger of ACNB
with and into CFB (the "Merger");

WHEREAS, the respective Boards of Directors of CFC, CFB and ACNB
have approved such Merger pursuant to the terms and conditions of
this Agreement and the Plan of Merger attached hereto as Appendix A (the
"Plan of Merger");

WHEREAS, for Federal income tax purposes, it is intended that the
Merger shall qualify as a reorganization within the meaning of Section
368(a) of the Internal Revenue Code of 1986, as amended; and

NOW, THEREFORE, in consideration of the premises and the mutual
representations, warranties and agreements herein contained, CFC,
CFB and ACNB hereby agree as follows:

SECTION I. DEFINITIONS

1.1. Agreement. This Reorganization Agreement between CFC, CFB
and ACNB, together with all schedules, exhibits and appendices attached
hereto.

1.2. Articles of Merger. The Articles of Merger to be executed by
CFC, CFB and ACNB and in a form appropriate for filing with the
Secretary of State of South Carolina and the OCC, and relating to the
effective consummation of the Merger as contemplated by the Plan of
Merger.

1.3. CFC. Carolina First Corporation, a bank holding company
headquartered in Greenville, South Carolina, which term shall include,
when the context permits, CFC and all CFC subsidiaries.

1.4. CFC Common Stock. The common stock, par value $1.00 per share,
of CFC.

1.5. CFB. Carolina First Bank, a South Carolina corporation and a
wholly-owned subsidiary of CFC.

1.6. Closing Date. The term Closing Date shall have the meaning
ascribed to it in Section 2.2 hereof.

1.7. Confidential Information. The term "Confidential Information"
shall meanall information of any kind concerning a party hereto that
is furnished by such party or on its behalf pursuant to Section 6.2
hereof and designated in writing as "Confidential Information", except
information (i) ascertainable or obtained from public or published
information, (ii) received from a third party not known to the
recipient of Confidential Information to be under an obligation to
keep such information confidential, (iii) which is or becomes known to
the public (other than through a breach of this Agreement), (iv) of
which the recipient was in possession prior to disclosure thereof in
connection with the Merger, or (v) which was independently
developed by the recipient without the benefit of Confidential
Information.

1.8. Code. The Internal Revenue Code of 1986, as amended.

1.9. Merger. The merger of ACNB with and into CFB as more
particularly set forth herein and in the Plan of Merger.

1.10. ERISA. The Employee Retirement Income Security Act of 1974, as
amended.

1.11. Effective Time. The date and time which the Merger becomes
effective as more particularly set forth in Section 2.2 of the Plan of
Merger.

1.12. FDIC. The Federal Deposit Insurance Corporation.

1.13. ACNB Common Stock. The common stock, par value $5.00 per
share, of ACNB.

1.14. OCC. The Office of Comptroller of the Currency.

1.15. OTS. The Office of Thrift Supervision.

1.16. Plan of Merger. The Plan of Merger attached to this
Reorganization Agreement as Appendix A.

1.17. Proxy Statement. The proxy statement included in the
Registration Statement which shall be furnished to the ACNB
stockholders in connection with the solicitation by the ACNB Board of
Directors of proxies for the approval of this Agreement and the
matters contemplated hereby.

1.18. Registration Statement. The Registration Statement on Form
S-4 to be filed with the SEC registering the CFC Common Stock to
be issued to the ACNB shareholders in connection with the Merger.

1.19. SEC. The Securities and Exchange Commission.

1.20. Securities Act. The Securities Act of 1933, as amended.

1.21. State Board. The South Carolina State Board of Financial
Institutions.

1.22. Stockholder Approvals. This term shall mean, as the context
may require, the written consent (duly authorized) of CFC to the Merger
of ACNB with and into CFB and the approval by the requisite vote
of the stockholders of ACNB at

1
<PAGE>

the Stockholders' Meeting of the Merger of ACNB with and into CFB,
all in accordance with the Reorganization Agreement and this Plan of
Merger.

1.23. Stockholders' Meeting. The meeting of the stockholders of
ACNB at whichthe Merger shall be voted upon.

1.24. Surviving Corporation. The surviving corporation after
consummation of the Merger, which shall be CFB.

SECTION II. THE MERGER

2.1. General Provisions. Subject to the terms and
conditions of this Agreement, including the Plan of Merger, at the
Effective Time, ACNB shall be merged with and into CFB, which shall be
the Surviving Corporation and remain a wholly- owned subsidiary of
CFC. At the Effective Time, the separate corporate existence of ACNB
shall cease. CFC and ACNB hereby agree that the Merger will be
effected pursuant to the terms set forth in the Plan of Merger.

2.2. The Closing. The Closing of the transaction contemplated
herein shall be held as soon as reasonably practicable after fulfillment
of all conditions set forth in Section VII and Section VIII hereof
(the "Closing Date"), at the offices of Wyche, Burgess, Freeman &
Parham, P.A. or at such other place and time as the parties hereto
may mutually agree; provided, however, that in the event that Closing
has not occurred by April 30, 1995, either party hereto shall have
the right to terminate this Agreement.

2.3. Consideration for the Merger. The manner of converting the
shares of ACNB into shares of CFC shall be as set forth in Articles
II and III of the Plan ofMerger.

2.4. Approval of ACNB Stockholders. CFC, CFB and ACNB shall
jointly prepare the Proxy Statement, which shall be reasonably
acceptable to all parties. The Proxy Statement shall be mailed to ACNB
shareholders as soon as reasonably practicable after the SEC's
declaration of effectiveness of the Registration Statement, with due
consideration given to the anticipated length of time that will be
required to obtain the necessary regulatory approvals.

2.5. Tax Treatment. CFC and ACNB intend that the Merger shall
qualify as a tax-free reorganization under Section 368(a) of the Code.

SECTION III. REPRESENTATIONS AND WARRANTIES OF ACNB

ACNB hereby represents and warrants to CFC the following matters
on and as of the date of this Agreement and at the Effective Time;
provided, however, that before any breach of or inaccuracy in any of
the representations or warranties given in this Section III shall be
actionable or shall constitute grounds for termination of or failure
to perform under the terms of this Agreement by CFC, such breach or
inaccuracy must be materially adverse in the aggregate with respect to
the business of ACNB.

3.1. Organization, Good-Standing and Conduct of Business.
ACNB is a corporation, duly organized, validly existing and in good
standing under the laws of the United States of America, and has full
power and authority and all necessary governmental and regulatory
authorization to own all of its properties and assets and to carry
on its business as it is presently being conducted, and is properly
licensed, qualified and in good standing as a foreign
corporation in all jurisdictions wherein the character of the
properties or the nature of the business transacted by ACNB makes such
license or qualification necessary.

3.2. Corporate Authority. The execution, delivery and
performance of this Agreement have been duly authorized by the Board
of Directors of ACNB. Other than approval of the Merger by the
shareholders of ACNB, no other corporate acts or proceedings on the
part of ACNB are required or necessary to authorize this
Agreement or the Merger.

3.3. Binding Effect. Subject to receipt of Stockholder
Approval and any required regulatory approvals, when executed, this
Agreement will constitute a valid and legally binding obligation of
ACNB, enforceable against ACNB in accordance with its terms, subject
to (i) applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating
to rights of creditors of FDIC-insured institutions or the relief of
debtors generally, (ii) laws relating to the safety and soundness of
depository institutions, and (iii) generalprinciples of equity. Each
document and instrument contemplated by this Agreement, when executed
and delivered by ACNB in accordance with the provisions hereof, shall
be duly authorized, executed and delivered by ACNB and enforceable
against ACNB in accordance with its terms, subject to the exceptions in
the previous sentence.

3.4. Capitalization of ACNB. The authorized capital stock of
ACNB consists solely of (i) 500,000 authorized shares of common stock
($5.00 par value), of which 402,500 shares are issued and outstanding.
All of the issued and outstanding shares of ACNB are validly issued
and fully paid and, except as provided in 12 U.S.C.A. (Section)55,
nonassessable. Except for the items set forth on Schedule 3.4 attached
hereto, there are no outstanding obligations, options, warrants or
commitments of any kind or nature or any outstanding securities or
other instruments convertible into shares of any class of capital stock
of ACNB, or pursuant to which ACNB is or may become obligated to issue
any shares of its capital stock. None of the shares of the ACNB Common
Stock is subject to any restrictions as to the transfer thereof,
except as set forth in ACNB's Articles of Association or Bylaws and
except for restrictions on account of applicable federal or state
securities laws. ACNB does not hold 10% of any class of equity
securities of any other company or legal entity.

3.5. Absence of Defaults. ACNB is not in default under, or in
violation of, any provision of its Articles of Association or Bylaws.
ACNB is not in default under, or in violation of, any agreement to
which ACNB is a party, the effect of which

<PAGE>

default or violation would have a material adverse effect on ACNB
or its business operations or prospects. Except as disclosed in
Schedule 3.5, ACNB is not in violation of any applicable law, rule or
regulation, the effect of which would have a material adverse effect
on ACNB or its business operations or prospects.

3.6. Non-Contravention and Defaults; No Liens. Neither the
execution or delivery of this Agreement, nor the fulfillment of, or
compliance with, the terms and provisions hereof, will (i) result in
a breach of the terms, conditions or provisions of, or constitute a
default under, or result in a violation of, termination of or
acceleration of the performance provided by the terms of, any
agreement to which ACNB is a party or by which it may be bound, (ii)
violate any provision of any law, rule or regulation, (iii) result in
the creation or imposition of any lien, charge, restriction, security
interest or encumbrance of any nature whatsoever on any asset of
ACNB, or (iv) violate any provisions of ACNB's Articles of Association
or Bylaws. To the best of ACNB's knowledge, no other party to any
material agreement to which ACNB is a party is in default thereunder or
in breach of any provision thereof. To the best of ACNB's knowledge,
there exists no condition or event which, after notice or lapse of time
or both, would constitute a default by any party to any such agreement.

3.7. Necessary Approvals. ACNB has obtained all certificates of
authority, licenses, permits, franchises, registrations of foreign
ownership or other regulatory approvals in every jurisdiction
necessary for the continuing conduct of its business and ownership of
its assets. Except for those which may be renewed or extended in the
ordinary course of business, no such certificate, license, permit,
franchise, registration or other approval is about to expire,
lapse, has been threatened to be revoked or has otherwise become
restricted by its terms which would, upon such expiration, lapse,
revocation or restriction, have a material adverse effect on the
financial circumstances of ACNB. Further, there is no reasonable
basis for any such expiration, lapse, revocation, threat of revocation
or restriction. Except for any necessary filings with, and
approvals and authorizations of the OCC, the FDIC, no
consent, approval, authorization, registration, or filing with or by
any governmental authority, foreign or domestic, is required on the
part of ACNB in connection with the execution and delivery of this
Agreement or the consummation by ACNB of the transactions contemplated
hereby. Except for the agencies in the preceding sentence or as
disclosed in Schedule 3.7 attached hereto, ACNB is not required to
procure the approval of any person, firm, corporation, or other
entity, foreign or domestic, in order to prevent the termination
of any right, privilege, license or contract of ACNB as a result of this
Agreement.

3.8. Financial Statements. The audited financial statements of
ACNB for each of the fiscal years 1991, 1992 and 1993, the unaudited
financial statements of ACNB at and for the six month period ending
June 30, 1994 and the unaudited monthly statements subsequent to
June 30, 1994 (the "ACNB Financial Statements") all of which have
been provided to CFC, are true, correct and complete in all material
respects and present fairly, in conformity with generally accepted
accounting principles consistently applied, the financial position
of ACNB at the dates indicated and the results of its operations
for each of the periods indicated, except as otherwise set forth in
the notes thereto. The books and records of ACNB have been kept, and
will be kept to the Closing Date, in reasonable detail, and will fairly
and accurately reflect in all material respects to the Closing Date,
the transactions of ACNB.

3.9. Tax Returns. ACNB files its income tax returns and
maintains its tax books and records on the basis of a taxable year
ending December 31. ACNB has duly filed all tax reports and returns
required to be filed by any federal, state or local taxing authorities
(including, without limitation, those due in respect of its properties,
income, franchises, licenses, sales and payrolls) through the date
hereof, and ACNB has duly paid all taxes with respect to the periods
covered thereby and has established adequate reserves in
accordance with generally accepted accounting principles
consistently applied for the payment of all income, fran-chises,
property, sales, employment or other taxes anticipated to be payable
after the date hereof. ACNB is not delinquent in the payment of any
taxes, assessments or governmental charges and no deficiencies have been
asserted or assessed, which have not been paid or for which adequate
reserves have not been established. ACNB does not have in effect any
waiver relating to any statute of limitations for assessment of taxes
with respect to any federal, state or local income, property,
franchise, sales, license or payroll tax. ACNB does not know, or have
reason to know, of any questions which have been raised or which may
be raised by any taxing authority relating to taxes or assessments
of ACNB which, if determined adversely, would result in the
assertion of any deficiency.

3.10. Undisclosed Liabilities. Except for the liabilities which
are disclosed in the ACNB Financial Statements or as set forth on
Schedule 3.10, ACNB has no material liabilities or material
obligations of any nature, whether absolute, accrued, contingent or
otherwise, and whether due or to become due. Since December 31, 1993,
there has been (i) no material adverse change in the business or
operations of ACNB, (ii) no incurrence by or subjection of ACNB to any
obligation or liability (whether fixed, accrued or contingent) or
commitment material to ACNB not referred to in this Agreement, except
such obligations or liabilities as were or may be incurred in the
ordinary course of business and which are reflected on the ACNB
Financial Statements at and for the periods subsequent to December 31,
1993.

3.11. Title to Properties, Encumbrances. All real property and
depreciable tangible personal property owned by ACNB is set forth on
Schedule 3.11. ACNB has good and marketable title to all of the
real property and depreciable tangible personal property set forth on
Schedule 3.11, free and clear of any liens, claims, charges, options
or other encumbrances, except for any lien for (i) current taxes not
yet due and payable, (ii) pledges to secure deposits and other liens
incurred in

<PAGE>

the ordinary course of the banking business, and (iii) such
imperfections of title, easements and other encumbrances, if any, as
are not material in character, amount or extent.

3.12. Litigation. Except as set forth on Schedule 3.12, there
are no claims, actions, suits or proceedings pending or threatened
against ACNB, or to its knowledge affecting ACNB, at law or in
equity, before or by any Federal, state, municipal, administrative or
other court, governmental department, commission, board, or agency,
an adverse determination of which could have a material adverse
effect on the business or operations of ACNB, and ACNB knows of no basis
for any of the foregoing. There is no order, writ, injunction, or
decree of any court, domestic or foreign, or any Federal or state
agency affecting ACNB or to which ACNB is subject.3.13. Reports. ACNB
has duly made all reports and filings required to be made pursuant to
applicable law, except for failures to file or reports which would not
have a material adverse effect on the business or financial condition of
ACNB.

3.14. Brokers. ACNB has not incurred any liability for any
commission or fee in the nature of a finder's, originator's or
broker's fee in connection with the transaction contemplated herein.

3.15. Expenditures. Schedule 3.15 sets forth any single
expenditure of $25,000 or more proposed to be made by ACNB after the
date hereof and a summary of the terms and conditions pertaining
thereto. At least 20 business days prior to the Closing Date, ACNB
will advise CFC of any changes to Schedule 3.15 reflecting additions
or deletions thereto since the date hereof.

3.16. Insurance. Attached hereto as Schedule 3.16 is a true
and complete summary of the policies of fire, liability, life and other
type of insurance held by ACNB, setting forth with respect to each such
policy, the policy number, name of the insured party, type of
insurance, insurance company, annual premium, expiration date,
deductible amount, if any, and amount of coverage. Each such policy is
in an amount reasonably sufficient for the protection of the assets
and business covered thereby, and, in the aggregate, all such policies
are reasonably adequate for the protection of all the assets and
business of ACNB taking into account the availability and cost of
such coverage. All such policies shall remain in fullforce and
effect for a period of at least 90 days following the Closing Date.
There is no reason known to ACNB that any such policy will not be
renewable on terms and conditions as favorable as those set forth in
such policy.

3.17. Contracts and Commitments. Schedule 3.17 attached hereto
sets forth each contract or other commitment of ACNB which requires
an aggregate payment by ACNB after the date hereof of more than
$25,000, and any other contract or commitment that in the opinion of
the ACNB management materially affects the business of ACNB. Except for
the contracts and commitments described in this Agreement or as set
forth in Schedule 3.17, ACNB is not party to or subject to:

1. Any contracts or commitments which are material to
its business, operations or financial condition;

2. Any employment contract or arrangement, whether oral or
written, with any officer, consultant, director or employee which
is not terminable on 30 day's notice without penalty or
liability to make any payment thereunder for more than 30 days
after such termination;

3. Any plan or contract or other arrangement, oral or
written, providing for insurance for any officer or employee or
members of their families;

4. Any plan or contract or other arrangement, oral or
written, providing for bonuses, pensions, options, deferred
compensation, retirement payments, profit-sharing or other benefits
for employees;

5. Any contract or agreement with any labor union;

6. Any contract or agreement with customers for the sale of
products or the furnishing of services, or any sales agency,
broker, distribution or similar contract, except contracts made in
the ordinary course of business;

7. Any contract restricting ACNB from carrying on its business
anywhere in the United States;

8. Any instrument or arrangement evidencing or related to
indebtedness for money borrowed or to be borrowed, whether
directly or indirectly, by way of purchase money obligation,
guaranty, conditional sale, lease-purchase, or otherwise;

9. Any joint venture contract or arrangement or any
other agreement involving a sharing of profits;

10. Any license agreement in which ACNB is the licensor or
licensee;

11. Any material contract or agreement, not of the type
covered by any of the other items of this Section 3.17, which by
its terms is either (i) not to be performed prior to 30 days from the
date hereof, or (ii) does not terminate, or is not terminable
without penalty to ACNB, or any successors or assigns prior to30
days from the date hereof. 3.18. Employee Benefit Plans.

(a) Except as described on Schedule 3.18, ACNB does not sponsor
or maintain and is not otherwise a party to or liable under, any
plan, program, fund or arrangement (whether or not qualified for
Federal income tax purposes, whether benefiting a single
individual or multiple individuals, and whether funded or not) that
is an "employee pension benefit plan", or an "employee welfare
benefit plan", as such terms are defined in ERISA, or any
incentive or other benefit arrangement for its employees, their
dependents and beneficiaries.

(b) ACNB has, for all periods ending on or prior to the
date hereto, administered each employee welfare benefit plan
described on Schedule 3.18 in material compliance with the
reporting, disclosure and all other requirements applicable under
ERISA, the Code or any other applicable law.

<PAGE>

(c) All amounts required to be accrued under generally accepted
accounting principles applied consistently by ACNB under any
incentive or other compensation plan have been accrued and are
reflected in the balance sheet contained in the December 31, 1993 ACNB
Financial Statements.

3.19. ACNB Information. The written information with respect to
ACNB, and its officers, directors, and affiliates which shall be used
in soliciting approval of the Merger by shareholders of ACNB will
not, on the date the Proxy Statement isfirst mailed to shareholders of
ACNB or on the date of the Stockholders' Meeting, as amended or
supplemented, contain any untrue statement of a material fact, or omit
to state any material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances
under which they were made, not misleading, or necessary to correct
any statement in any earlier communication to ACNB shareholders with
respect to the Merger.

3.20. Due Diligence. All information provided by ACNB in
connection with the due diligence investigation by CFC was, at the
time that such information was provided, fair, accurate and complete
in all material respects. ACNB has not failed to provide or make
available to CFC all material information regarding ACNB.

3.21. Resale of CFC Common Stock. ACNB knows of no present plan or
intention on the part of its shareholders to sell, assign, transfer
or otherwise dispose of shares of CFC Common Stock to be received by
such shareholders in connection with the Merger which would reduce
said shareholders' holdings of CFC common stock to a number of shares
having, in the aggregate, a value of less than 50% of the value of ACNB
Common Stock outstanding as of the Effective Time. For purposes
of this representation, the number of shares of CFC Common Stock
which would have been received by any dissenting shareholders of ACNB
had they not dissented, and shares of ACNB Common Stock sold, redeemed
or otherwise disposed of prior or subsequent to and as part of the
Merger, will be considered as shares received by shareholders of ACNB
and then disposed of by shareholders of ACNB.

SECTION IV. REPRESENTATIONS AND WARRANTIES BY CFC AND CFB

CFC and CFB hereby represent and warrant to ACNB the following
matters on and as of the date of this Agreement and at the Effective
Time; provided, however, that before any breach of or inaccuracy in any
of the representations or warranties given in this Section IV shall be
actionable or shall constitute grounds for termination of or failure to
perform under the terms of this Agreement by ACNB, such breach or
inaccuracy must be materially adverse in the aggregate with
respect to the businesses of CFC and CFB.

4.1. Organization, Good-Standing and Conduct of Business. CFC
and CFB are corporations, duly organized, validly existing and in good
standing under the laws of the State of South Carolina, and have full
power and authority and all necessary governmental and regulatory
authorization to own all of their properties and assets and to carry
on their business as they are presently being conducted, and are
properly licensed, qualified and in good standing as foreign
corporations in all jurisdictions wherein the character of the
properties or the nature of the business transacted by CFC and CFB
makes such license or qualification necessary.

4.2. Corporate Authority. The execution, delivery and
performance of this Agreement have been duly authorized by the Boards
of Directors of CFC and CFB. No further corporate acts or proceedings
on the part of CFC or CFB are required or necessary to authorize this
Agreement or the Merger.

4.3. Binding Effect. When executed, this Agreement will constitute
a valid and legally binding obligation of CFC and CFB, enforceable
against CFC and CFB in accordance with its terms, subject to (i)
applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to rights of
creditors of FDIC-insured institutions or the relief of debtors
generally, (ii) laws relating to the safety and soundness of
depository institutions, and (iii) general principles of equity. Each
document and instrument contemplated by this Agreement, when executed
and delivered by CFC and/or CFB in accordance with the provisions
hereof, shall be duly authorized, executed and delivered by CFC
and/or CFB and enforceable against CFC and/or CFB in accordance with
its terms, subject to the exceptions in the previous sentence.

4.4. Capitalization of CFC. The authorized capital stock of
CFC consists solely of (i) 20,000,000 authorized shares of common
stock ($1.00 par value), of which 4,523,784 shares are issued and
outstanding and (ii) 10,000,000 shares of preferred stock, of which
621,000 shares of 7.50% Noncumulative Convertible Preferred Stock
Series 1993, 60,000 shares of Convertible Preferred Stock
Series 1993B, and 920,000 shares of 7.32% Noncumulative Convertible
Preferred Stock Series 1994, are outstanding. All of the issued and
outstanding shares of CFC are validly issued and fully paid and
nonassessable. Except for (i) stock or options to purchase shares
of CFC Common Stock granted under employee benefit plans, (ii) the
621,000 shares of 7.50% Noncumulative Convertible Preferred Stock Series
1993, (iii) the 60,000 shares of Convertible Preferred Stock Series
1993B, and (iv) the 920,000 shares of 7.32% Noncumulative Convertible
Preferred Stock Series 1994, (v) shares which may be issued pursuant to
CFC's Shareholders' Rights Plan entered into as of November 9, 1993
between CFC and CFB, (vi) existing dividend reinvestment plans, or
(vii) as otherwise set forth on Schedule 4.4, there are no outstanding
obligations, options, warrants or commitments of any kind or nature or
any outstanding securities or other instruments convertible into shares
of any class of capital stock of CFC, or pursuant to which CFC is or
may become obligated to issue any shares of its capital stock.
None of the shares of the CFC Common Stock is subject to any
restrictions as to the transfer thereof, except as set forth in CFC's
Articles of Incorporation or Bylaws and except for restrictions on

<PAGE>

account of applicable federal or state securities laws. The Common
Stock to be issued in connection with this Agreement and the Merger
will, when issued, be validly issued, fully paid and nonassessable
and issued pursuant to an effective registration statement.

4.5. Subsidiaries of CFC. CFC owns 100% of the issued and
outstanding shares of CFB, Carolina First Savings Bank, F.S.B and
Carolina First Mortgage Company. Other than CFC, no individual or
entity has rights to acquire shares of CFB, Carolina First Savings
Bank, F.S.B or Carolina First Mortgage Company. CFC does not hold 10%
of any class of equity securities of any other company or legal
entity other than CFB, Carolina First Savings Bank, F.S.B. and
Carolina First Mortgage Company.

4.6. Absence of Defaults. Neither CFC nor CFB is in default
under, or in violation of any provision of their Articles of
Incorporation or Bylaws. Neither CFC nor CFB is in default under, or
in violation of, any agreement to which they are a party, the effect of
which default or violation would have a material adverse effect on
CFC or CFB or their business operations or prospects. Neither CFC nor
CFB is in violation of any applicable law, rule or regulation the
effect of which would have a material adverse effect on CFC or CFB
or their business operations or prospects.

4.7. Non-Contravention and Defaults; No Liens. Neither the
execution or delivery of this Agreement, nor the fulfillment of, or
compliance with, the terms and provisions hereof, will (i) result in
a breach of the terms, conditions orprovisions of, or constitute a
default under, or result in a violation of, termination of or
acceleration of the performance provided by the terms of, any
agreement to which CFC or CFB is a party or by which they may be bound,
(ii) violate any provision of any law, rule or regulation, (iii)
result in the creation or imposition of any lien, charge, restriction,
security interest or encumbrance of any nature whatsoever on any asset
of CFC or CFB, or (iv) violate any provisions of CFC's or CFB's
Articles of Incorporation or Bylaws. To the best of CFC's and CFB's
knowledge, no other party to any material agreement to which CFC or CFB
is a party is in default thereunder or in breach of any provision
thereof. To the best of CFC's and CFB's knowledge, there exists no
condition or event which, after notice or lapse of time or both,
would constitute a default by any party to any such agreement.

4.8. Necessary Approvals. CFC and CFB have obtained all
certificates of authority, licenses, permits, franchises,
registrations of foreign ownership or other regulatory approvals in
every jurisdiction necessary for the continuing conduct of its
business and ownership of its assets. Except for those which may be
renewed or extended in the ordinary course of business, no such
certificate, license, permit, franchise, registration or other
approval is about to expire, lapse, has been threatened to be revoked
or has otherwise become restricted by their terms which would, upon
such expiration, lapse, revocation or restriction, have amaterial
adverse effect on the financial circumstances of CFC or CFB.
Further, there is no basis for any such expiration, lapse, revocation,
threat of revocation or restriction. Except for (i) any necessary
filings with, and approvals and authorizations of the OCC, the FDIC
and the State Board, and (ii) the filing with the SEC of the
Registration Statement and filings with blue sky authorities, no
consent, approval, authorization, registration, or filing with
or by any governmental authority, foreign or domestic, is required
on the part of CFC or CFB in connection with the execution and delivery
of this Agreement or the consummation by CFC and CFB of the
transactions contemplated hereby. Except for the agencies and other
entities in the preceding sentence, neither CFC nor CFB is required to
procure the approval of any person, firm, corporation, or other entity,
foreign or domestic, in order to prevent the termination of any right,
privilege, license or contract of CFC or CFB as a result of this
Agreement.

4.9. Financial Statements. The audited financial statements of
CFC for each of the fiscal years 1991, 1992 and 1993, the unaudited
financial statements of CFC at and for the six month period ending
June 30, 1994 and the unaudited monthly statements subsequent to June
30, 1994 (the "CFC Financial Statements") all of which have been
provided to ACNB, are true, correct and complete in all material
respects and present fairly, in conformity with generally accepted
accounting principles consistently applied, the financial position of
CFC at the dates indicated and the results of its operations for each
of the periods indicated, except as otherwise set forth in the notes
thereto. The books and records of CFC have been kept, and will be
kept to the Closing Date, in reasonable detail, and will fairly and
accurately reflect in all material respects to the Closing Date, the
transactions of CFC.

4.10. Tax Returns. CFC files its income tax returns and maintains
its tax books and records on the basis of a taxable year ending
December 31. CFC has duly filed all tax reports and returns required
to be filed by any federal, state or local taxing authorities
(including, without limitation, those due in respect of its
properties, income, franchises, licenses, sales and payrolls)
through the date hereof, and CFC has duly paid all taxes with respect
to the periods covered thereby and has established adequate reserves
in accordance with generally accepted accounting principles
consistently applied for the payment of all income, fran- chises,
property, sales, employment or other taxes anticipated to be payable
in respect of the period subsequent to the period ending after the date
hereof. CFC is not delinquent in the payment of any taxes, assessments
or governmental charges and no deficiencies have been asserted or
assessed, which have not been paid or for which adequate reserves
have not been established and which are not being contested in good
faith. CFC does not have in effect any waiver relating to any statute
oflimitations for assessment of taxes with respect to any federal,
state or local income, property, franchise, sales, license or payroll
tax. Except as set forth on Schedule 4.10, CFC does not know, or
have reason to know, of any questions which have been raised or which
may be raised by any taxing authority relating to taxes or assessments
of CFC which, if determined adversely, would result in the assertion of
any deficiency.

<PAGE>

4.11. Undisclosed Liabilities. Except for the liabilities which
are disclosed in the CFC Financial Statements or as set forth on
Schedule 4.11, CFC has no material liabilities or material
obligations of any nature, whether absolute, accrued, contingent or
otherwise, and whether due or to become due. Since December 31, 1993,
there has been no material adverse change in the business or operations
of CFC.

4.12. Litigation. There are no claims, actions, suits or
proceedings pending or threatened against or, to its knowledge,
affecting CFC at law or in equity, before or by any Federal, state,
municipal, administrative or other court, governmental department,
commission, board, or agency, an adverse determination of which could
have a material adverse effect on the business or operations of CFC,
and CFC knows of no basis for any of the foregoing. There is no
order, writ, injunction, or decree of any court, domestic or foreign,
or any Federal or state agency affecting CFC or to which CFC is
subject, except for a dividend agreement between CFC and theOTS which
regulates the payment of dividends from Carolina First Savings
Bank, F.S.B. to CFC.

4.13. Reports. CFC has duly made all reports and filings required
to be made pursuant to applicable law, except for failures to file or
reports which would not have a material adverse effect on the business
or financial condition of CFC.

4.14. CFC Information. The written information with respect to
CFC, and its officers, directors, and affiliates which shall have been
supplied by CFC (or any of its accountants, counsel or other authorized
representatives) specifically for use in soliciting approval of the
Merger by shareholders of ACNB, or which shall be contained in the
Registration Statement, will not, on the date the Proxy Statement is
first mailed to shareholders of ACNB or on the date of the Stockholders'
Meeting, or in the case of the Registration Statement, at the time
it becomes effective, contain any untrue statement of a material fact,
or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, or
necessary to correct any statement in any earlier communication to ACNB
stockholders with respect to the Merger. The Registration Statement
will comply as to form with all applicable laws, including the
provisions of the Securities Act.

4.15. Due Diligence. All information provided by CFC in connection
with the due diligence investigation by ACNB was, at the time that such
information was provided, fair, accurate and complete in all material
respects. CFC has not failed to provide or make available to ACNB all
material information regarding CFC.

SECTION V. CONDUCT OF BUSINESS PENDING CLOSING

5.1. Conduct of ACNB Pending Closing. During the period commencing
on the date hereof and continuing until the Closing Date, ACNB
covenants and agrees to the following (except to the extent that
CFC shall otherwise expressly consent in writing, which consent
shall not be unreasonably delayed or withheld); provided, however,
that any breach of or inaccuracy in any of the covenants given in
this Section 5.1 must be material in the aggregate with respect to the
business of ACNB before such breach shall be actionable or shall
constitute grounds for termination or failure to perform under this
Agreement.

(a) ACNB will carry on its business only in the ordinary
course in substantially the same manner as heretofore conducted
and, to the extent consistent with such business, use all
reasonable efforts to preserve intact its business organization,
maintain the services of its present officers and employees
and preserve its relationships with customers, suppliers and
others having business dealings with it so that its goodwill and
going business shallbe unimpaired at the Closing Date. ACNB shall
not purchase or otherwise acquire or enter into a contract to acquire
servicing or subservicing rights without the written consent of CFC,
which consent shall not be unreasonably withheld.

(b) ACNB will not amend its Articles of Association or Bylaws
as in effect on the date hereof.

(c) Except for the issuance of capital stock in connection with
items set forth on Schedule 3.4, ACNB will not issue, grant, pledge
or sell, or authorize the issuance of, reclassify or redeem, purchase
or otherwise acquire, any shares of its capital stock of any class
or any securities convertible into shares of any class, or any
rights, warrants or options to acquire any such shares (except for
employee stock options in the ordinary course in accordance
with past practice and only upon prior notice to CFC); nor
will it enter into any arrangement or contract with respect to the
issuance of any such shares or other convertible securities; nor
will it declare, set aside or pay any dividends (of any type) or
make any other change in its equity capital structure.

(d) ACNB will promptly advise CFC orally and in writing of
any change in the businesses of ACNB which is or may reasonably be
expected to be materially adverse to the business of ACNB.

(e) ACNB will not take, agree to take, or knowingly permit to
be taken any action or do or knowingly permit to be done anything
in the conduct of thebusiness of ACNB, or otherwise, which would
be contrary to or in breach of any of the terms or provisions of
this Agreement, or which would cause any of the representations of
ACNB contained herein to be or become untrue in any material
respect.

(f) ACNB will not incur any indebtedness for borrowed money,
issue or sell any debt securities, or assume or otherwise become
liable, whether directly, contingently or otherwise, for the
obligation of any other party, other than in the ordinary course of
business.

<PAGE>

(g) Except for expenses attendant to the Merger and current
contractual obligations, ACNB will not incur any expense in an
amount in excess of $25,000 after the execution of this Agreement
without the prior written consent of CFC.

(h) ACNB will not grant any executive officers any
increase in compensation (except in the ordinary course in
accordance with past practice and only upon prior notice to CFC), or
enter into any employment agreement with any executive officer
without the consent of CFC except as may be required under
employment or termination agreements in effect on the date hereof
which have been previously disclosed to CFC in writing.

(i) ACNB will not acquire or agree to acquire by merging or
consolidating with, purchasing substantially all of the assets of
or otherwise, any business or any corporation, partnership,
association or other business organization or division thereof.

5.2. Conduct of CFC Pending Closing. During the period commencing
on the date hereof and continuing until the Closing Date, CFC
covenants and agrees to the following (except to the extent that
ACNB shall otherwise expressly consent in writing, which consent
shall not be unreasonably delayed or withheld); provided, however,
that any breach of or inaccuracy in any of the covenants given in
this Section 5.2 must be material in the aggregate with respect to the
business of CFC before such breach shall be actionable or shall
constitute grounds for termination or failure to perform under this
Agreement.

(a) CFC shall carry on its business in substantially the
same manner as heretofore conducted.

(b) CFC will not amend its Articles of Incorporation or
Bylaws as in effect on the date hereof in any manner that will
adversely affect the ACNB stockholders in any material respect.

(c) Except for the issuance of stock (i) in connection
with the Convertible Preferred Stock, (ii) in connection with
the items set forth on Schedule 4.4, (iii) in connection with
acquisitions (including, but not limitedto, the acquisitions listed
on Schedule 4.4), or (iv) in the ordinary course in accordance
with past practice (such as employee stock grants or options), CFC
will not authorize, create or issue any shares of capital stock.

(d) CFC will promptly advise ACNB orally and in writing of
any change in its business which is or may reasonably be expected to
be materially adverse to CFC.

(e) CFC will not take, agree to take, or knowingly permit to
be taken any action or do or knowingly permit to be done anything
in the conduct of its business or otherwise, which would be
contrary to or in breach of any of the terms or provisions of
this Agreement, or which would cause any of the
representations of CFC contained herein to be or become untrue in
any material respect.

SECTION VI. COVENANTS OF THE PARTIES

6.1. Access to Properties and Records. Between the date of this
Agreement and the Closing Date, the parties will provide to each
other and to their respective accountants, counsel and other
authorized representatives reasonable access (with due consideration
being given to the fact that CFC is a company traded on the Nasdaq
National Market, that CFC is acquiring all of ACNB and that ACNB will
constituteonly a small portion of CFC after the consummation of the
transactions herein), during reasonable business hours and upon
reasonable notice, to their respective premises, properties,
contracts, commitments, books, records and other information and will
cause their respective officers to furnish to the other party and
its authorized representatives such financial, technical and operating
data and other information pertaining to their respective businesses,
as the parties shall from time to time reasonably request. Each
party will and will cause its employees and agents to hold in strict
confidence, unless disclosure is compelled by judicial or
administrative process, or in the opinion of its counsel, by other
requirements of law, all Confidential Information and will not
disclose the same to any person. Confidential Information shall be
used only for the purpose of and in connection with consummating
the transaction contemplated herein. If this Agreement is
terminated, each party hereto will promptly return all documents
received by it from each other party containing Confidential
Information. The covenants in this Section 6.1 shall survive the
Closing Date forever.

6.2. Regulatory Filings. The parties hereto will use their
respective best efforts and cooperate with each other to obtain
promptly all such regulatory approvals and to make such filings as, in
the opinion of their respective counsels, may be necessary or
advisable in connection with this transaction. CFC shall be
responsible for all filings fees required in connection with such
approvals or filings.

6.3. Registration Statement/Proxy Statement. CFC shall file the
Registration Statement with the SEC and shall pay the required filing
fees. The parties will use their respective best efforts and cooperate
with each other to obtain promptly the effectiveness of the
Registration Statement. CFC shall also take any reasonable action
required to be taken under the blue sky laws in connection with the
issuance of CFC Common Stock in the Merger. ACNB shall mail, at its
expense, the Proxy Statement to its shareholders.

6.4. Affiliates' Letters. ACNB shall deliver to CFC a letter
identifying all persons who are, at the time the Merger is submitted
to a vote of the shareholders of ACNB, "affiliates" of ACNB for
purposes of Rule 145 of the General Rules and Regulations under the
Securities Act. ACNB shall use its best efforts to cause each person
who is identified as an

<PAGE>

"affiliate" in the letter referred to above to deliver to CFC on
or prior to the Effective Time a written agreement, in form
reasonably satisfactory to CFC, (a) that such person will not
offer to sell, transfer or otherwise dispose of any of the shares
of CFC Common Stock issued to such person pursuant to the Merger in
such a manner so as to destroy the tax-free status of the Merger or
the qualification by the Merger as a pooling of intereststransaction,
and (b) that such person will not offer to sell, transfer or otherwise
dispose of any of the shares of CFC Common Stock issued to such person
pursuant to the Merger, except in accordance with the applicable
provisions of Rule 145.

6.5. Listing of CFC Common Stock. CFC shall cause the shares of
CFC Common Stock to be issued in the transactions contemplated by this
Reorganization Agreement to be approved for quotation on the Nasdaq
National Market, subject to official notice of issuance, prior to the
Effective Time. CFC shall give such notice to Nasdaq as may be
required to permit the listing of the CFC Common Stock issued in
connection with the Merger.

6.6. Letters from Accountants. Prior to the date the Registration
Statement is declared effective and prior to the Effective Time, ACNB
will deliver to CFC letters from Elliott Davis & Co. addressed to CFC
and dated not more than two business days before the date on which such
Registration Statement shall have become effective and not more than two
business days prior to the Effective Time, respectively, in form and
substance satisfactory to CFC, and CFC will deliver to ACNB letters from
Elliott Davis & Co., addressed to ACNB and dated not more than two
business days before the Registration Statement shall have become
effective and not more than two business days prior to the Effective
Time, respectively, in form and substance satisfactory to ACNB, in
each case with respect to the financial condition of the other party and
such other matters as are customary in accountants' comfort letters.

6.7. Tax Treatment/Accounting Treatment. ACNB and CFC shall each take
such acts within their power as may be reasonably necessary to
cause the Merger to qualify (i) as a "reorganization" within the
meaning of Section 368(a) of the Code and (ii) as a "pooling of
interests" under general accepted accounting practices, except to the
extent such performance or failure would be prohibited by law. Such
reasonable acts shall include, without limitation, the abstention
from resales of CFC Common Stock received in connection herewith.

6.8. Expenses. The parties shall pay their own fees and
expenses (including legal and accounting fees) incurred in connection
with this transaction.

6.9. Material Events. At all times prior to the Closing Date, each
party shall promptly notify the other in writing of the occurrence of
any event which will or may result in the failure to satisfy the
conditions specified in Section VI or Section VII of this Agreement.

6.10. Public Announcements. At all times until after the Closing
Date, neither ACNB nor CFC shall issue or permit any of its respective
subsidiaries, affiliates, officers, directors or employees to issue any
press release or other information to the press with respect to this
Agreement, without the express prior consent of the other party, except
as may be required by law or the policies of NASDAQ.

SECTION VII. CONDITIONS TO CFC'S OBLIGATION TO CLOSE

The obligation of CFC and CFB to consummate the transactions
contemplated in this Agreement is subject to the satisfaction of the
following conditions at or before the Closing Date:

7.1. Performance of Acts and Representations by ACNB. Each of
the acts and undertakings of ACNB to be performed on or before the
Closing Date pursuant to the terms of this Agreement shall have been
duly authorized and duly performed, and each of the representations and
warranties of ACNB set forth in this Agreement shall be true on the
Closing Date, except as to transactions contemplated by this Agreement.

7.2. Opinion of Counsel for ACNB. ACNB shall have furnished
CFC with an opinion of its counsel, dated as of the Closing Date,
and in form and substance reasonably satisfactory to CFC and its
counsel, to the effect that, except as disclosed herein: (i) ACNB
is duly organized, validly existing and in good standing under the laws
of the United States of America; (ii) the consummation of the
transactions contemplated by this Agreement will not (A) violate any
provision of ACNB's Articles of Association or Bylaws, (B) violate
any provision of, result in the termination of, or result in the
acceleration of any obligation under, any mortgage, lien, lease,
franchise, license, permit, agreement, instrument, order, arbitration
award, judgment or decree known to counsel to which ACNB is a party, or
by which it is bound, except as such would not, in the aggregate, have
a materialadverse effect on the business or financial condition of
ACNB, or (C) violate or conflict with any other restriction of any
kind or character of which such counsel has knowledge and to which ACNB
is subject; (iii) all of the shares of ACNB Common Stock are validly
authorized and issued, fully paid and, except as provided by 12
U.S.C.A. (Section)55, non-assessable; (iv) ACNB has the legal right and
power, and all authorizations and approvals required by law, to enter
into this Agreement, and to consummate the transactions contemplated
herein; (v) ACNB has full corporate power and authority to enter
into this Agreement, and this Agreement has been duly authorized,
executed and delivered by ACNB and constitutes a valid and legally
binding obligation of ACNB enforceable against ACNB in accordance
with its terms, except as such enforceability may be limited by
(x) applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to rights of
creditors of FDIC-insured institutions or the relief of debtors
generally, (y) laws relating to the safety and soundness of
depository institutions, and (z) general principles of equity; (vi) to
the best knowledge of such counsel, no material suit or proceeding is
pending or threatened against ACNB or other parties which

<PAGE>

would have a material adverse effect on ACNB's business or properties
or its abilities to make the representations and warranties and
perform the obligations set forth herein.

7.3. Conduct of Business. The business of ACNB shall have been
conducted inthe usual and customary manner, and there shall have been
no material casualty or material adverse change in the business or
financial condition of ACNB from the date hereof through the Closing
Date.

7.4. Consents. All permits, orders, consents, or other
authorizations necessary, in the reasonable opinion of counsel for CFC,
to the consummation of the transactions contemplated hereby shall
have been obtained, and no governmental agency or department or
judicial authority shall have issued any order, writ, injunction or
decree prohibiting the consummation of the transactions contemplated
hereby. Approvals of all applicable regulatory agencies shall have
been obtained without the imposition of any condition or requirements
that, in the reasonable judgment of CFC, renders the consummation of
this transaction unduly burdensome.

7.5. Certificate. CFC shall have been furnished with such
certificates of officers of ACNB and/or such certificates of ACNB
stockholders, in form and substance reasonably satisfactory to CFC,
dated as of the Closing Date, certifying to such matters as CFC may
reasonably request, including but not limited to the fulfillment of
the conditions specified in this Section VII.

7.6. Limit on Dissent. The holders of 10% or more of the ACNB
Common Stock outstanding at the time of the Stockholders' Meeting shall
not have dissented to the

Merger by demanding payment for fair value of their shares in the manner
provided by 12 U.S.C.A. (Section)214a.

7.7. Pooling of Interests. CFC shall have received reasonable
assurance from Elliott, Davis & Co. that the Merger will qualify
for pooling of interests accounting treatment under general accepted
accounting practices.

7.8. Affiliates' Letters. CFC shall have received letters from
all affiliates of ACNB as contemplated in Section 6.4 hereof.

7.9. Due Diligence. CFC shall have completed a due diligence
investigation of ACNB by October 27, 1994, the results of which shall
be reasonably satisfactory to CFC.

SECTION VIII. CONDITIONS TO THE OBLIGATION OF ACNB TO CLOSE

The obligation of ACNB to consummate the transactions
contemplated in this Agreement is subject to the satisfaction of the
following conditions at or before the Closing Date:

8.1. Performance of Acts and Representations by CFC and CFB. Each
of the acts and undertakings of CFC and CFB to be performed on or
before the Closing Date pursuant to the terms of this Agreement shall
have been duly authorized and duly performed, and each of the
representations and warranties of CFC and CFB set forth in this
Agreement shall be true on the Closing Date, except as to
transactionscontemplated by this Agreement.

8.2. Opinion of Counsel for CFC. CFC shall have furnished ACNB
with an opinion of its counsel, dated as of the Closing Date, and in
form and substance reasonably satisfactory to ACNB and its counsel,
to the effect that, except as disclosed herein: (i) CFC and CFB
are duly organized, validly existing and in good standing under the
laws of the State of South Carolina; (ii) the consummation of
the transactions contemplated by this Agreement will not (A) violate
any provision of CFC's or CFB's Articles of Incorporation or Bylaws,
(B) violate any provision of, result in the termination of, or result
in the acceleration of any obligation under, any mortgage, lien, lease,
franchise, license, permit, agreement, instrument, order, arbitration
award, judgment or decree known to counsel to which CFC or CFB is a
party, or by which it is bound, except as such would not, in the
aggregate, have a material adverse effect on the business or
financial condition of CFC, or (C) violate or conflict with any
other restriction of any kind or character of which such counsel has
knowledge and to which CFC or CFB is subject; (iii) all of the
shares of CFC Common Stock to be issued in connection with the Merger
will be, when issued, validly authorized and issued, fully paid and
non-assessable; (iv) CFC and CFB have the legal right and power, and all
authorizations and approvals required by law, to enter into this
Agreement, and to consummate the transactions contemplated herein; (v)
CFC and CFB have full corporate power and authority to enter into
thisAgreement, and this Agreement has been duly authorized, executed
and delivered by CFC and CFB and constitutes a valid and legally
binding obligation of CFC and CFB enforceable against CFC and CFB
in accordance with its terms, except as such enforceability may
be limited by (x) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in
effect relating to rights of creditors of FDIC-insured institutions
or the relief of debtors generally, (y) laws relating to the safety
and soundness of depository institutions, and (z) general principles of
equity; (vi) to the best knowledge of such counsel, no material suit or
proceeding is pending or threatened against CFC or other parties which
would have a material adverse effect on CFC's business or properties
or its abilities to make the representations and warranties and perform
the obligations set forth herein.

8.3. Conduct of Business. There shall have been no material
casualty or material adverse change in the business or financial
condition of CFC from the date hereof through the Closing Date.

8.4. Consents. All permits, orders, consents, or other
authorizations necessary, in the reasonable opinion of counsel for ACNB,
to the consummation of the transactions contemplated hereby shall have
been obtained, and no governmental agency or department or judicial
authority shall have issued any order, writ, injunction or decree
prohibiting the

10
<PAGE>

consummation of the transactions contemplated hereby. Approvals of
all applicable regulatory agencies shall have been obtained without the
imposition of any condition or requirements that, in the reasonable
judgment of ACNB, renders the consummation of this transaction unduly
burdensome.

8.5. Certificate. ACNB shall have been furnished with such
certificates of officers of CFC, in form and substance reasonably
satisfactory to ACNB, dated as of the Closing Date, certifying to
such matters as ACNB may reasonably request, including but not
limited to the fulfillment of the conditions specified in this
Section VIII.

8.6. Tax Opinion. ACNB shall have received from Wyche,
Burgess, Freeman & Parham, P.A. a tax opinion, reasonably
satisfactory to ACNB, opining, subject to reasonable qualifications,
that the Merger shall, upon compliance with reasonable conditions,
qualify as a tax-free reorganization under Section 368(a) of the Code.

8.7. Fairness Opinion. The Board of Directors of ACNB shall have
received a fairness opinion from a reputable investment banking
firm, which opinion is reasonably acceptable to ACNB.

8.8. Stockholder Approvals. The Stockholder Approvals shall have
been obtained.

SECTION IX. TERMINATIONS

9.1. Termination. This Agreement may be terminated at any time
prior to the Closing Date:

(a) by mutual consent of the parties;

(b) by either CFC or ACNB, at that party's option, if
a permanent injunction or other order (including any order denying
any required regulatory consent or approval) shall have been
issued by any Federal or state court of competent jurisdiction in
the United States or by any United States Federal or state
governmental or regulatory body, which order prevents the
consummation of the transactions contemplated herein;

(c) by either CFC or ACNB if the other party has failed to
comply with the agreements or fulfill the conditions contained
herein, provided, however, that any such failure of compliance
or fulfillment must be material to the consolidated businesses
of either CFC or ACNB and the breaching must be given notice of
the failure to comply and a reasonable period of time to cure;

(d) by either CFC or ACNB as set forth in Section 2.2 hereof.

(e) by ACNB if the average of the closing sales price of CFC
Common Stock for any period of ten consecutive trading days from the
date hereof through the day before the Closing Date is less than
$12.00 per share. 9.2. Effect of Termination. In the event of
termination of this Agreement byeither CFC or ACNB as provided
above, this Agreement shall forthwith become void and there shall be
no liability hereunder on the part of CFC or ACNB, or their
respective officers or directors, except for intentional breach;
provided, however, that in the event of termination by CFC for any
reason other than one set forth in Section 9.1(c) above or one which
is beyond the reasonable control of CFC, then CFC shall reimburse
ACNB for all reasonable costs and fees incurred in connection with
the transactions contemplated by this Agreement. In the event
this Agreement is terminated, any agreements between the two
parties as to Confidential Information shall survive such
termination.

SECTION X. INDEMNIFICATION

10.1. Information for Application and Statements. Each of
CFC and ACNB represents and warrants that all information concerning
it which is or will be included in any statement and application made
to any governmental agency (including the Registration Statement) in
connection with the transactions contemplated by the Agreement shall be
true and correct in all material respects and shall not omit any
material fact required to be stated therein or necessary to make the
statements made, in light of the circumstances under which they were
made, not misleading. Each of CFC and ACNB so representing and
warranting will indemnify and hold harmless the other, each of its
directors and officers, who controls the other within the meaning of
the Securities Act, from and against any and all losses, claims,
damages, expenses or liabilities to which any of them may become
subject under applicable laws and rules and regulations thereunder and
will reimburse them for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any
actions whether or not resulting in liability, insofar as such losses,
claims, damages, expenses, liabilities or actions arise out of are
based upon any untrue statement or alleged untrue statement of a
material fact contained in any such application or statement or arise
out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein, or necessary in
order to make the statements therein not misleading, but only insofar
as any such statement or omission was made in reliance upon and in
conformity with information furnished in writing by the representing
and warranting party expressly for use therein. Each of CFC and ACNB
agrees, at any time upon the request of the other, to furnish to the
other a written letter or statement confirming the accuracy of the
information contained in any proxy statement, registration statement,
report or other application or statement, or in any draft of any
such document, and confirming that the information contained in such
document or draft was furnished expressly for use therein or, if such
is not the case, indicating the inaccuraciescontained in such document
or draft or indicating the information not furnished expressly for
use therein. The indemnity agreement contained in this Section X
shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of the other party.

<PAGE>

10.2. Indemnication of Officers and Directors. CFC covenants and
agrees that it will cause each person who is an officer or director of
ACNB on the Closing Date to be indemnified for any and all claims
and liabilities arising out of such person's service as an officer
or director of ACNB to the maximum extent that a South Carolina
corporation is permitted by law to indemnify its officers and
directors, including indemnification for the cost of defending such
claims as well as any liability resulting therefrom. The
indemnification provided in this Section shall also apply to each
former director of ACNB named as a defendant in the litigation set
forth on Schedule 3.12 with respect to such litigation. The
provisions of this Section X shall survive the closing and shall be
enforceable directly by each officer and director of ACNB benefited by
this Section X.

SECTION XI. MISCELLANEOUS

11.1. Survival of Representations and Warranties. The
representations, warranties and covenants contained in this Agreement
or in any other documents delivered pursuant hereto, shall
survive the Closing of the transactionscontemplated hereby.
Notwithstanding any investigation made by or on behalf of the parties,
whether before or after Closing Date, the parties shall be entitled to
rely upon the representations and warranties given or made by the
other party(ies) herein.

11.2. Entire Agreement. This Agreement, including any
schedules, exhibits, lists and other documents referred to herein
which form a part hereof, contains the entire agreement of the parties
with respect to the subject matter contained herein and there are no
agreements, warranties, covenants or undertakings other than those
expressly set forth herein.

11.3. Binding Agreement. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, that the Agreement shall not
be assigned by either of the parties hereto without the prior written
consent of the other party hereto.

11.4. Notices. Any notice given hereunder shall be in writing
and shall be deemed delivered and received upon reasonable proof of
receipt. Unless written designation of a different address is filed
with each of the other parties hereto, notice shall be transmitted to
the following addresses:

For CFC: William S. Hummers III
Carolina First Corporation
102 South Main Street
Greenville, South Carolina 29601

Copy to: William P. Crawford, Jr.
Wyche, Burgess, Freeman & Parham, P.A.
Post Office Box 728
Greenville, South Carolina 29602

For ACNB: Michael L. Laughlin
Aiken County National Bank
Post Office Box 1546
Aiken, South Carolina 29802

Copies to: James R. Barber III
Todd & Barber
Post Office Box 1549
Columbia, South Carolina 29202
George S. King, Jr.
Sinkler & Boyd, P.A.
Post Office Box 11889
Columbia, South Carolina 29211

11.5. Counterparts. This Agreement may be executed in
one or more Counterparts, each of which shall be deemed to be an
original, but all of which together shall constitute one and the same
instrument.

11.6. Headings. The section and paragraph headings contained in
this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretations of this Agreement.

11.7. Law Governing. This Agreement shall be governed by and
construed in accordance with the laws of the State of South Carolina.

11.8. Amendment. This Agreement may not be amended except by an
instrument in writing signed on behalf of all of the parties.

<PAGE>

11.9. Waiver. Any term, provision or condition of this Agreement
(other than that required by law) may be waived in writing at any
time by the party which is entitled to the benefits thereof.

IN WITNESS WHEREOF, this Agreement has been duly entered as of the
date firstwritten above.

CAROLINA FIRST CORPORATION

By: /s/ Mack I. Whittle, Jr.
Mack I. Whittle, Jr.
President and CEO

CAROLINA FIRST BANK

By: /s/ Mack I. Whittle, Jr.
Mack I. Whittle, Jr.
Chairman

AIKEN COUNTY NATIONAL BANK

By: /s/ Michael L. Laughlin
Michael L. Laughlin
Chairman of the Board of
Directors

<PAGE>

APPENDIX A TO REORGANIZATION AGREEMENT

PLAN OF MERGER OF AIKEN COUNTY NATIONAL BANK WITH AND INTO CAROLINA
FIRST BANK

Pursuant to this Plan of Merger (the "Plan of Merger"), Aiken
County National Bank ("ACNB"), a national banking association existing
under the laws of the United States of America, shall be acquired by
Carolina First Corporation ("CFC"), a corporation existing under the
laws of the State of South Carolina, by the merger of ACNB with and into
Carolina First Bank ("CFB"), a banking corporation existing under the
laws of the State of South Carolina and a wholly-owned subsidiary of
CFC.

ARTICLE
I. DEFINITIONS

The capitalized terms set forth below shall have the following meanings:

1.1. "Articles of Merger" shall mean the Articles of Merger to be
executed by CFC, CFB and ACNB and in a form appropriate for filing
with the Secretary of State of South Carolina, and relating to the
effective consummation of the Merger as contemplated by the Plan of
Merger.

1.2. "CFC Common Stock" shall mean the common stock, par value $1.00
per share, of CFC.

1.3. "Conversion Ratio" shall mean the number of shares of CFC
Common Stock issuable in exchange for one share of ACNB Common Stock,
as calculated pursuant to Section 3.1 hereof.

1.4. "Dissenting Stockholder" shall mean the holder of shares of
ACNB CommonStock who has made a timely demand for payment of the
fair value of his or her shares by the effective exercise of
dissenters' rights in the manner provided in 12 U.S.C.A. (Section)214a.

1.5. "Effective Time" shall mean the date and time which the
Merger becomes effective as more particularly set forth in Section 2.2
hereof.

1.6. "Merger" shall mean the merger of ACNB with and into
CFB as more particularly set forth herein and in the Reorganization
Agreement.

1.7. "Fair Market Value" shall mean, with respect to the CFC Common
Stock for a particular day in question, the average of the high and low
sale prices as quoted on the Nasdaq National Market for that
particular day and the immediately preceding four business days.

1.8. "OCC" shall mean the Office of Comptroller of the Currency.

1.9. "Reorganization Agreement" shall mean the Agreement and
Plan of Reorganization among CFC, CFB and ACNB dated the date hereof,
to which this Plan of Merger is attached as Appendix A.

1.10. "Stockholder Approvals" shall mean, as the context may
require, the written consent (duly authorized) of CFC to the merger of
ACNB with and into CFB and the approval by the requisite vote of the
stockholders of ACNB at the Stockholders' Meeting of the merger of
ACNB with and into CFB, all in accordance with the Reorganization
Agreement and this Plan of Merger.

1.11. "Stockholders' Meeting" shall mean the meeting of the
stockholders of ACNB at which the Merger shall be voted upon.

1.12. "Surviving Corporation" shall mean CFB after consummation of
the Merger.

ARTICLE II. THE MERGER

2.1. Merger. Subject to the terms and conditions set
forth in the Reorganization Agreement, unless effectively waived as
provided therein, and in accordance with all applicable laws,
regulations and regulatory requirements, at the Effective Time, ACNB
shall be merged with and into CFB. CFB shall be the Surviving
Corporation of the Merger and shall continue to be governed by the laws
of the State of South Carolina.

2.2. Effective Time. The Merger shall become effective on the date
and at the time specified in the Articles of Merger, and in the form
to be filed with the Secretary of State of the State of South Carolina
as applicable.

2.3. Capitalization The number of authorized shares of capital
stock of the Surviving Corporation shall be the same as immediately
prior to the Merger.

2.4. Charter. The charter of CFB as in effect at the Effective
Time shall be and remain the charter of the Surviving Corporation.

2.5. Bylaws. The Bylaws of CFB, as in effect at the Effective
Time, shall continue in full force and effect as the bylaws of the Surviving
Corporation until otherwise amended as provided by law or by such
bylaws.

2.6. Properties and Liabilities of ACNB and CFB. At the
Effective Time, the separate existence and corporate organization of
ACNB shall cease, and CFB shall thereupon and thereafter, to the
extent consistent with its charter and the changes, if any, provided by
the Merger, possess all the rights, privileges, immunities,
liabilities and franchises, of a public as well as a private nature, of
ACNB without further act or deed.

ARTICLE III. MANNER OF CONVERTING SHARES

<PAGE>

3.1. ACNB Common Stock. Each share of ACNB Common Stock
issued and outstanding immediately prior to the Effective Time shall,
by virtue of the Merger and without any action on the part of the
holder thereof, be exchanged for and converted into one and one/eighth
share (1.125 shares) of CFC Common Stock.

3.2. CFB Common Stock. None of the shares of CFB shall be
converted in the Merger and the capitalization of CFB after the Merger
shall remain unchanged.

3.3. Treasury Shares. Any and all shares of ACNB Common
Stock held as treasury shares by ACNB shall be cancelled and retired at
the Effective Time, and no consideration shall be issued or given in
exchange therefor.3.4.Fractional Shares. No fractional shares of CFC
Common Stock will be issued as a result of the Merger. In lieu of
the issuance of fractional shares pursuant to Section 3.1 hereof,
cash will be paid to the holders of the ACNB Common Stock in respect of
any fractional share that would otherwise be issuable based on the Fair
Market Value of the CFC Common Stock on the last trading day
immediately preceding the Effective Time.

ARTICLE IV. EXCHANGE OF COMMON STOCK CERTIFICATES

4.1. Issuance of CFC Certificates; Cash for Fractional Shares.
After the Effective Time, each holder of shares of ACNB Common Stock
issued and outstanding at the Effective Time shall surrender the
certificate or certificates representing such shares to CFC or its
transfer agent, and shall promptly upon surrender receive in exchange
therefor the consideration provided in Section 3.1 of this Plan of
Merger. The certificate or certificates of ACNB Common Stock so
surrendered shall be duly endorsed as CFC or its transfer agent may
require. To the extent required by Section 3.4 of this Plan of
Merger, each holder of shares of ACNB Common Stock issued and
outstanding at the Effective Time also shall receive, upon surrender of
the certificate or certificates representing such shares, cash in
lieu of any fractional share of CFC Common Stock to which such holder
might be entitled.

4.2. Authorized Withholdings. CFC shall not be obligated to
deliver theconsideration to which any former holder of ACNB Common
Stock is entitled as a result of the Merger until such holder
surrenders his or her certificate or certificates representing the
shares of ACNB Common Stock for exchange as provided in this Article
IV, or, in default thereof, an appropriate affidavit of loss and
indemnity agreement and/or a bond as may be reasonably required in each
case by CFC or ACNB. In addition, no dividend or other distribution
payable to the holders of record of CFC Common Stock as of any time
subsequent to the Effective Time shall be paid to the holder of any
certificate representing shares of ACNB Common Stock issued and
outstanding at the Effective Time until such holder surrenders such
certificate for exchange as provided in Section 4.1 above. However,
upon surrender of the ACNB Common Stock certificate both the CFC Common
Stock certificate, together with all such withheld dividends or
other distributions and any withheld cash payments in respect of
fractional share interest, but without any obligation for payment of
interest by such withholding, shall be delivered and paid with respect
to each share represented by such certificate.

4.3. Limited Rights of Former ACNB Stockholders. After the
Effective Time, each outstanding certificate representing shares of
ACNB Common Stock prior to the Effective Time shall be deemed for all
corporate purposes (other than the payment of dividends and other
distributions to which the former stockholder of ACNB Common Stock may
be entitled) to evidence only the right of the holder thereof to
surrender such certificate and receive the requisite number of shares
of CFC Common Stock in exchange therefor as provided in this Plan of
Merger.

ARTICLE V. STOCK OPTIONS

5.1. Options. At the Effective Time, all outstanding
obligations, commitments, options, warrants or other securities set
forth on Schedule 3.4 of the Reorganization Agreement which are
exercisable for or convertible into, or which require the issuance
of, shares of any class of capital stock of ACNB, shall, after the
Effective Date, represent only the right to receive shares of CFC
Common Stock based on the Conversion Ratio.

ARTICLE VI. MISCELLANEOUS

6.1. Conditions Precedent. Consummation of the Merger is
conditioned upon receipt of the Stockholder Approvals. In addition,
consummation of the Merger is conditioned upon the fulfillment of the
conditions precedent set forth in Section VII and Section VIII of the
Reorganization Agreement, subject to waiver of any such conditions, if
appropriate, as provided thereunder.

6.2. Termination. This Plan of Merger may be terminated at any
time prior tothe Effective Time as provided in Section IX of the
Reorganization Agreement.

6.3. Amendments. To the extent permitted by law, this Plan of
Merger may be amended by a subsequent writing signed by all of the
parties hereto upon the approval of the board of directors of each of
the parties hereto; provided, however, that this Plan of Merger may not
be amended after the Stockholders' Meeting except in accordance with
applicable law.

Dated as of this _____ day of October, 1994.

<PAGE>

APPENDIX B

DISSENTERS' RIGHTS

(Section) 214a. Procedure for conversion, merger, or
consolidation; vote of stockholders

A national banking association may, by vote of the holders
of at least two-thirds of each class of its capital stock,
convert into, or merge or consolidate with, a State bank in the
same State in which the national banking association is located,
under a State charter, in the following manner:

(a) Approval of board of directors; publication of notice of
stockholders; meeting; waiver of publication; notice by
registered or certified mail

The plan of conversion, merger, or consolidation must be
approved by a majority of the entire board of directors of the
national banking association. The bank shall publish notice of
the time, place, and object of the shareholders' meeting to act
upon the plan, in some newspaper with general circulation in the
place where the principal office of the national banking
association is located, at least once a week for four consecutive
weeks: Provided, That newspaper publication may be dispensed
with entirely if waived by all the shareholders and in the case
of a merger or consolidation one publication at least ten days
before the meeting shall be sufficient if publication for four
weeks is waived by holders of at least two-thirds of each class
of capital stock and prior written consent of the Comptroller of
the Currency is obtained. The national banking association shall
send such notice to each shareholder of record by registered mail
or by certified mail at least ten days prior to the meeting,
which notice may be waived specifically by any shareholder.

(b) Rights of dissenting stockholders

A shareholder of a national banking association who votes
against the conversion, merger, or consolidation, or who has
given notice in writing to the bank at or prior to such meeting
that he dissents from the plan, shall be entitled to receive in
cash the value of the shares held by him, if and when the
conversion, merger, or consolidation is consummated, upon written
request made to the resulting State bank at any time before
thirty days after the date of consummation of such conversion,
merger, or consolidation, accompanied by the surrender of his
stock certificates. The value of such shares shall be determined
as of the date on which the shareholders' meeting was held
authorizing the conversion, merger, or consolidation, by a
committee of three persons, one to be selected by majority vote
of the dissenting shareholders entitled to receive the value of
their shares, one by the directors of the resulting State bank,
and the third by the two so chosen. The valuation agreed upon by
any two of three appraisers thus chosen shall govern; but, if the
value so fixed shall not be satisfactory to any dissenting
shareholder who has requested payment as provided herein, such
shareholder may within five days after being notified of the
appraised value of his shares appeal to the Comptroller of the
Currency, who shall cause a reappraisal to be made, which shall
be final and binding as to the value of the shares of the
appellant. If, within ninety days from the date of consummation
of the conversion, merger, or consolidation, for any reason one
or more of the appraisers is not selected as herein provided, or
the appraisers fail to determine the value of such shares, the
Comptroller shall upon written request of any interested party,
cause an appraisal to be made, which shall be final and binding
on all parties. The expenses of the Comptroller in making the
reappraisal, or the appraisal as the case may be, shall be paid
by the resulting State bank. The plan of conversion, merger, or
consolidation shall provide the manner of disposing of the shares
of the resulting State bank not taken by the dissenting
shareholders of the national banking association.

<PAGE>

APPENDIX C

CARSON MEDLIN CO

February 9, 1995

The Board of Directors
Aiken County National Bank
142 Chesterfield Street S.E.
Aiken, South Carolina 29801

Gentlemen:

You have requested our opinion as to the fairness, from a
financial point of view, of the consideration to be received by
the unaffiliated shareholders of Aiken County National Bank (the
"Bank" or "ACNB") under the terms of a merger of ACNB with and
into Carolina First Bank, a wholly-owned subsidiary of Carolina
First Corporation (Carolina First Bank and Carolina First
Corporation being collectively referred to herein as "CAFC")
pursuant to an Agreement and Plan of Reorganization and an
Agreement of Merger, as amended, both dated October 13, 1994
among ACNB and CAFC (collectively, the "Agreements") (the
"Merger"). Upon the effective date of the Merger, each of the
approximately 402,500 outstanding shares of the Bank's common
stock will be converted into the right to receive 1.125 shares of
CAFC common stock. The foregoing summary of the Merger is
qualified in its entirety by reference to the Agreements.

The Carson Medlin Company (Carson Medlin) is a National
Association of Securities Dealers, Inc. (NASD) member investment
banking firm which specializes in the securities of southeastern
United States financial institutions. As a part of our
investment banking activities, we are regularly engaged in the
valuation of southeastern United States financial institutions
and transactions relating to their securities. We regularly
publish our research on independent community banks regarding
their financial and stock price performance. We are familiar
with the commercial banking industry in the Southeast and the
major commercial banks operating in this region. We have been
retained by the Bank in a financial advisory capacity to render
our opinion hereunder, for which we will receive compensation.

In reaching our opinion, we have analyzed the respective
financial positions, both current and historical, of the Bank and
CAFC. We have reviewed (i) the Agreements; (ii) the Annual
Reports to shareholders, including the audited financial
statements of ACNB and the unaudited financial statements of
ACNB, and the Annual and Quarterly Reports on Forms 10-K and 10-Q
of CAFC, for the five years ended December 31, 1993 and the nine
months ended September 30, 1994; (iii) the news release of CAFC
dated January 25, 1995 describing financial results, on a
preliminary basis, for the twelve months ended December 31, 1994;
(iv) monthly interim financial statements of ACNB for the period
January to December 1994; (v) certain financial and operating
information with respect to the business, operations and
prospects of ACNB and CAFC; and (vi) the Proxy Statement/Prospectus
prepared in connection with the special meeting of the shareholders
of ACND to be held to approve the merger.

<PAGE>

Carson Medlin also (a) held discussions with members of the
senior management of ACNB and CAFC regarding the historical and
current business operations, financial condition and future
prospects of their respective companies; (b) reviewed the
historical market prices and trading activity for the common
stocks of ACNB and CAFC and compared them with the historical
prices and trading activities of certain publicly-traded
companies which it deemed to be relevant; (c) compared the
results of operations of ACNB and CAFC with those of certain
banking companies which it deemed to be relevant; (d) compared
the proposed financial terms of the Merger with the financial
terms, to the extent publicly available, of certain other recent
business combinations of commercial banking organizations; (e)
analyzed the pro forma financial impact of the Merger on CAFC;
and (f) conducted such other studies, analyses, inquiries and
examinations as Carson Medlin deemed appropriate.

We have relied upon and assumed without independent verification
the accuracy and completeness of all information provided to us.
We have not performed or considered any independent appraisal or
evaluation of the assets of the Bank or of CAFC. The opinion we
express herein is necessarily based upon market, economic and
other relevant considerations as they exist and can be evaluated
as of the date of this letter.

Based upon the foregoing, it is our opinion that the total
consideration to be received by the unaffiliated shareholders of
Aiken County National Bank pursuant to the Merger is fair, from a
financial point of view, to the unaffiliated shareholders of
Aiken County National Bank.

Very truly yours,

THE CARSON MEDLIN COMPANY

<PAGE>

APPENDIX D

CONDENSED SUMMARY OF EARNINGS
CAROLINA FIRST CORPORATION

(unaudited)

Years ended December 31,
1991 1992 1993 1994

(dollars in thousands)

<S> <C> <C> <C> <C>
Interest income..................... $ 35,305 $ 38,174 $48,692 $ 71,591
Interest expense.................... 22,439 20,335 21,749 29,964
Net interest income................ 12,866 17,819 26,943 41,627

Provision for loan losses........... 1,423 1,453 909 950

Net interest income after provision
for loan losses.................. 11,443 16,366 26,034 40,677

Noninterest income.................. 2,286 3,456 6,252 7,858
Noninterest expenses................ 11,607 16,145 25,178 49,960

Income before income taxes......... 2,122 3,677 7,108 (1,425)

Income taxes........................ 442 1,160 2,173 444

Net income......................... 1,680 2,517 4,935 (1,869)

Dividends on preferred stock........ 625 1,930 2,433

Net income applicable
to common shareholder $ 1,680 $ 1,892 $ 3,005 $ (4,302)
</TABLE>

<PAGE>

CONDENSED SUMMARY OF EARNINGS
CAROLINA FIRST BANK
(unaudited)
<TABLE>
<CAPTION>

Years ended December 31,
(dollars in thousands)
1991 1992 1993 1994
<S> <C> <C> <C> <C>
Interest income..................... $ 23,646 $ 24,495 $36,713 $ 55,594
Interest expense.................... 14,647 11,953 15,688 22,451
Net interest income................ $ 8,999 12,542 21,025 33,143

Provision for loan losses........... 1,108 1,309 809 850

Net interest income after provision
for loan losses.................. 7,891 11,233 20,216 32,293

Noninterest income.................. 2,228 3,361 5,394 5,416
Noninterest expenses................ 8,530 11,864 20,028 41,584

Income before income taxes......... 1,589 2,730 5,582 (3,875)

Income taxes........................ 284 819 1,709 (1,239)

Net income......................... $ 1,305 $ 1,911 $ 3,873 $ (2,636)

</TABLE>

<PAGE>

CONDENSED SUMMARY OF EARNINGS
AIKEN COUNTY NATIONAL BANK
(unaudited)
<TABLE>
<CAPTION>

Years ended December 31,
(dollars in thousands)
1991 1992 1993 1994
<S> <C> <C> <C> <C>
Interest income..................... $ 3,719 $ 3,528 $ 3,068 $ 3,031
Interest expense.................... 2,291 1,979 1,437 1,187
Net interest income................ $ 1,429 1,550 1,630 1,844

Provision for loan losses........... 264 375 52 140

Net interest income after provision
for loan losses.................. 1,165 1,174 1,578 1,704

Noninterest income.................. 187 235 211 129
Noninterest expenses................ 1,282 1,544 1,677 2,139

Income before income taxes......... 70 (134) 112 (306)

Income taxes........................ 12 -- -- --

Net income......................... $ 59 $ (134) $ 112 $ (306)

</TABLE>

<PAGE>

CONDENSED BALANCE SHEET
CAROLINA FIRST CORPORATION
(unaudited)
<TABLE>
<CAPTION>
December 31,
(dollars in thousands)
1993 1994
<S> <C> <C>
Assets:
Cash and due from banks.................... $ 27,320 $ 55,047
Federal funds sold......................... 54,212 500
Investment securities...................... 114,726 117,059
Loans...................................... 567,379 866,742
Less unearned income..................... (2,221) (873)
Less allowance for loan losses........... (5,688) (5,267)
Net loans............................... 559,470 860,602
Premises and equipment..................... 28,990 36,842
Other assets............................... 31,703 50,047
Total assets................................ $ 816,421 $ 1,120,097

Liabilities and stockholders' equity:
Liabilities
Deposits
Noninterest-bearing..................... $ 39,563 $ 119,950
Interest bearing........................ 436,705 805,498
Total deposits........................ 476,268 925,448
Borrowed funds........................... 3,859 107,200
Other liabilities........................ 4,711 8,408
Total Liabilities....................... 484,838 1,041,056

Total stockholders' equity.................. 44,225 79,041

Total liabilities and stockholders' equity.. $ 529,063 $ 1,120,097

</TABLE>

<PAGE>

CONDENSED BALANCE SHEET
CAROLINA FIRST BANK
(unaudited)
<TABLE>
<CAPTION>

December 31,
(dollars in thousands)
1993 1994
<S> <C> <C>
Assets:
Cash and due from banks.................... $ 28,844 $ 49,048
Federal funds sold......................... 51,641 1,000
Investment securities...................... 96,200 90,192
Loans...................................... 425,953 647,696
Less unearned income..................... (2,161) (819)
Less allowance for loan losses........... (4,466) (3,849)
Net loans............................... 419,326 643,028
Premises and equipment..................... 18,263 24,583
Other assets............................... 23,745 30,104
Total assets................................ $ 634,019 $ 837,955

Liabilities and stockholders' equity:
Liabilities
Deposits
Noninterest-bearing..................... $ 55,111 $ 91,618
Interest bearing........................ 513,352 617,425
Total deposits........................ 568,463 709,043
Borrowed deposits........................ 10,394 66,886
Other liabilities........................ 9,332 6,788
Total Liabilities....................... 588,189 782,717

Total stockholders' equity.................. 45,830 55,238

Total liabilities and stockholders' equity.. $ 634,019 $ 837,955

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CONDENSED BALANCE SHEET
AIKEN COUNTY NATIONAL BANK
(unaudited)
<TABLE>
<CAPTION>

December 31,
(dollars in thousands)
1993 1994
<S> <C> <C>
Assets:
Cash and due from banks.................... $ 1,385 $ 2,204
Federal funds sold......................... 3,258 2,480
Investment securities...................... 7,002 4,246
Loans...................................... 29,400 29,736
Less allowance for loan losses........... (621) (402)
Net loans............................... 28,779 29,334
Premises and equipment..................... 1,576 1,662
Other assets............................... 1,952 1,700
Total assets................................ $ 43,952 $ 41,625

Liabilities and stockholders' equity:
Liabilities
Deposits
Noninterest-bearing..................... $ 3,318 $ 4,580
Interest bearing........................ 36,774 33,442
Total deposits........................ 40,092 38,022
Borrowed funds........................... 24 -
Other liabilities........................ 134 211
Total Liabilities....................... 40,251 38,232

Total stockholders' equity.................. 3,701 3,393

Total liabilities and stockholders' equity.. $ 43,952 $ 41,625

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