TYPE: EX-13.0
SEQUENCE: 2
DESCRIPTION: 1997 Annual Report to Stockholders

The following  pages are being filed in response to comments from the Securities
and Exchange Commission.
<PAGE>

INDEPENDENT AUDITORS' REPORT


The Board of Directors
HFNC Financial Corp.
Charlotte, North Carolina

We have  audited  the  consolidated  statements  of  financial  position of HFNC
Financial  Corp. and its  subsidiaries  (the  "Company") as of June 30, 1997 and
1996, and the related consolidated  statements of income, equity, and cash flows
for each of the three years in the period ended June 30, 1997.  These  financial
statements   are  the   responsibility   of  the   Company'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 audit 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,  such consolidated  financial  statements present fairly, in all
material  respects,  the financial  position of the Company at June 30, 1997 and
1996, and the results of its operations and its cash flows for each of the three
years in the period ended June 30, 1997 in conformity  with  generally  accepted
accounting principles.

As discussed in Note 11 to the consolidated financial statements, the Company is
a defendant in certain litigation in which the ultimate outcome cannot presently
be  determined.  Accordingly,  no  provision  for any loss that may result  upon
resolution  of  these  matters  has  been  made  in the  accompanying  financial
statements.

As discussed in Note 1 to the consolidated financial statements,  effective July
1, 1995,  the  Company  changed  its  method of  accounting  for  postretirement
benefits to conform with the  provisions  of  Statement of Financial  Accounting
Standards No. 106 and effective July 1, 1994, the Company  changed its method of
accounting  for  investments  in debt and equity  securities to conform with the
provisions of Statement of Financial Accounting Standards No. 115.

   
/s/Deloitte & Touche LLP
------------------------
Deloitte & Touche LLP
Charlotte, North Carolina
    
August 12, 1997
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Selected Quarterly Financial Data

The accompanying table presents condensed quarterly information for the two year
period ended June 30, 1997.
<TABLE>
<CAPTION>
                                                                      Fiscal Year Ended June 30, 1997
                                                     ------------------------------------------------------------------
                                                     First Quarter    Second Quarter    Third Quarter    Fourth Quarter
                                                      ------------     ------------      ------------     ------------
<S>                                                   <C>              <C>               <C>              <C>         
Interest income .................................     $ 15,641,312     $ 16,543,616      $ 16,616,311     $ 16,514,417
Interest expense ................................        7,729,846        8,488,904         8,707,509        9,692,451
                                                      ------------     ------------      ------------     ------------
Net interest income .............................        7,911,466        8,054,712         7,908,802        6,821,966
Provision for loan losses (recovery of allowance)          374,397         (413,531)          239,283         (259,435)
Other income ....................................          311,605          320,434           313,556          256,258
Other expense ...................................        6,585,751        4,423,646         4,943,501        4,031,723
                                                      ------------     ------------      ------------     ------------
Income before income taxes ......................        1,262,923        4,365,031         3,039,574        3,305,936
Income taxes ....................................          486,225        1,680,537         1,170,236        1,272,785
                                                      ------------     ------------      ------------     ------------
Net income ......................................     $    776,698     $  2,684,494      $  1,869,338     $  2,033,151
                                                      ============     ============      ============     ============

Net income per common share:
  Basic .........................................     $       0.05     $       0.16      $       0.12     $       0.13
  Diluted .......................................     $       0.05     $       0.16      $       0.11     $       0.12

<CAPTION>
                                                                       Fiscal Year Ended June 30, 1996
                                                      ------------------------------------------------------------------
                                                      First Quarter     Second Quarter   Third Quarter    Fourth Quarter
                                                       ------------      ------------     ------------     ------------
<S>                                                    <C>               <C>              <C>              <C>         
Interest income ..................................     $ 11,556,420      $ 12,137,369     $ 13,776,001     $ 14,672,258
Interest expense .................................        7,330,536         7,384,749        6,430,038        6,863,234
                                                       ------------      ------------     ------------     ------------
Net interest income ..............................        4,225,884         4,752,620        7,345,963        7,809,024
Provision for loan losses (recovery of allowance)          (141,892)          161,081          250,447           67,321
Other income .....................................        1,014,356           293,258          310,443          198,540
Other expense ....................................        2,983,130         3,303,127        3,054,715        3,082,213
                                                       ------------      ------------     ------------     ------------
Income before income taxes and cumulative
  effect of a change in accounting principle .....        2,399,002         1,581,670        4,351,244        4,858,030
Income taxes .....................................          902,936           525,639        1,772,803        1,364,466
                                                       ------------      ------------     ------------     ------------
Income before cumulative effect of a change
  in accounting principle ........................        1,496,066         1,056,031        2,578,441        3,493,564
Cumulative effect on prior years of a change in
  accounting principle (net of income tax benefit)        1,050,000              --               --               --
                                                       ------------      ------------     ------------     ------------
Net income .......................................     $    446,066      $  1,056,031     $  2,578,441     $  3,493,564
                                                       ============      ============     ============     ============
Net income per common share:
  Basic ..........................................              n/a               n/a     $       0.16     $       0.21
  Diluted ........................................              n/a               n/a     $       0.16     $       0.21

</TABLE>