SECURITIES AND EXCHANGE COMMISSION

                              Washington, DC 20549


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                                    FORM 8-K

                                 CURRENT REPORT


                     Pursuant to Section 13 or 15(d) of the

                         Securities Exchange Act of 1934

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        Date of Report (Date of earliest event reported): August 26, 2007


                          CAROLINA NATIONAL CORPORATION




Incorporated under the     Commission File No. 000-50257      I.R.S. Employer
laws of South Carolina                                        Identification No.
                                                                 571101005


                                1350 Main Street

                         Columbia, South Carolina 29201

                             Telephone: 803-779-0411


Check  the  appropriate  box  below  if the  Form  8-K  filing  is  intended  to
simultaneously  satisfy the filing obligation of the registrant under any of the
following provisions:

[ ]  Written  communications  pursuant to Rule 425 under the  Securities Act (17
     CFR 230.425)

[ ]  Soliciting  material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
     240.14a-12)

[ ]  Pre-commencement   communications  pursuant  to  Rule  14d-2(b)  under  the
     Exchange Act (17 CFR 240.14d-2(b))

[ ]  Pre-commencement   communications  pursuant  to  Rule  13e-4(c)  under  the
     Exchange Act (17 CFR 240.13e-4(c))




ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

On August 26, 2007, Carolina National Corporation  ("Carolina National") entered
into an  agreement  and plan of merger  with  First  National  Bancshares,  Inc.
("First National"). Pursuant to the agreement, Carolina National will merge with
and into First  National and each of Carolina  National's  shareholders  will be
entitled to receive in exchange for each share of Carolina National common stock
one of the  following:  (i) 1.4678 shares of First National  common stock,  (ii)
$21.65 in cash,  or (iii) a combination  of both stock and cash.  In total,  the
merger  consideration will be allocated as follows:  70% of Carolina  National's
outstanding  shares  of  common  stock  will be  exchanged  for  shares of First
National  common  stock and 30% of  Carolina  National's  outstanding  shares of
common  stock  will be  exchanged  for  cash.  Cash will also be paid in lieu of
fractional shares.

The closing of the merger is  expected  to occur in the fourth  quarter of 2007.
Both boards of directors have approved the merger  agreement and will submit the
merger  agreement to their  respective  shareholders  for  approval.  The merger
agreement is also subject to regulatory  approvals and other  customary  closing
conditions. The merger agreement contains customary representations,  warranties
and covenants of both First National and Carolina National.






SIGNATURE

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  registrant  has duly  caused  this report to be signed on its behalf by the
undersigned, hereunto duly authorized.

                                   CAROLINA NATIONAL CORPORATION
                                  (Registrant)



Date:  August 30, 2007             By: s/Roger B. Whaley
                                      -------------------------------
                                    Roger B. Whaley
                                    President