UNITED STATES SECURITIES AND EXCHANGE
COMMISSIONWASHINGTON, D.C. 20549

FORM 10-Q

Mark One

ýQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES           EXCHANGE
ACT OF 1934

For the quarterly period ended June 30,
2002

 ̈TRANSITION REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES           EXCHANGE
ACT OF 1934

For the transition period from __________ to
__________

Commission File Number: 
000-24203

GB&T Bancshares, Inc.



Georgia
    
    58-2400756(State or other jurisdiction
      ofincorporation or organization)
    
    (IRS EmployerIdentification
      No.)


500 Jesse Jewell Parkway,
S.E.          Gainesville,
Georgia  30501

(770) 532-1212

N/A (Former name, former address and former fiscal
year, if changed since last report)

Indicate by check mark whether the registrant (1)
filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports) and (2) has been subject
to such filing requirements for the past 90 days.

YesþNo ̈

APPLICABLE ONLY TO CORPORATE
ISSUERS

State the number of shares outstanding of
each of the issuers classes of common stock, as of August 9,
2002:    4,766,030 shares; no par value



---



GB&T BANCSHARES,
INC.

TABLE OF
CONTENTS

Page
    No.PART I.
    FINANCIAL
      INFORMATIONItem
      1.  FINANCIAL STATEMENTSConsolidated
      Balance Sheets - June 30, 2002 (Unaudited)and December 31,
      2001
    3Consolidated
      Statements of Income (Unaudited)-Three and six months ended
      June 30, 2002 and 2001
    4Consolidated
      Statements of Comprehensive Income (Unaudited)-Three and six months ended
      June 30, 2002 and 2001
    5Consolidated
      Statements of Stockholders Equity  (Unaudited)Six months ended
      June 30, 2002
    5Consolidated
      Statements of Cash Flows (Unaudited) -Six months ended
      June 30, 2002 and 2001
    6Notes
      to Consolidated Financial Statements (Unaudited)
    7-8Item
      2.  Managements Discussion and Analysis ofFinancial
      Condition and Results of Operations
    9-14Item
      3.  Quantitative and Qualitative Disclosures About Market
      Risk
    15PART II.
    OTHER
      INFORMATIONItem
      4.  Submission of Matters to a Vote of Security Holders
    15Item
      6.  Exhibits and Reports on Form 8-K
    15Signatures
    16




2

---



PART I - FINANCIAL INFORMATIONITEM 1 - FINANCIAL
STATEMENTS

GB&T BANCSHARES, INC. AND
SUBSIDIARIESConsolidated Balance
Sheets(Unaudited)

|                                                                                                                                                | June 30,                                       | December 31,
|----------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------- | ------------
|                                                                                                                                                | 2002                                           | 2001        
|                                                                                                                                                |                                               
|                                                                                                                                                | (amounts in thousands,except
      share data)
|Assets                                                                                                                                          |                                                |             
|Cash and due from banks                                                                                                                         | $    18,956                                    | $    18,097 
|Interest-bearing deposits in
banks                                                                                                              | 1,581                                          | 1,087       
|Federal funds sold                                                                                                                              | 989                                            | 24          
|Securities available for sale, at fair
      value                                                                                              | 83,778                                         | 86,204      
|Restricted equity securities                                                                                                                    | 4,758                                          | 2,992       
|                                                                                                                                                |                                                |             
|Loans, net of unearned income                                                                                                                   | 446,881                                        | 418,656     
|Less allowance for loan
    losses                                                                                                              | 5,716                                          | 5,522       
|                                                                                                                                                |                                                |             
|Loans, net                                                                                                                                      | 441,165                                        | 413,134     
|                                                                                                                                                |                                                |             
|Premises and equipment                                                                                                                          | 16,108                                         | 14,807      
|Other assets                                                                                                                                    | 11,513                                         | 11,251      
|                                                                                                                                                |                                                |             
|Total
      assets                                                                                                                              | $  580,848                                     | $  547,596  
|                                                                                                                                                |                                                |             
|                                                                                                                                                |                                                |             
|Liabilities and Stockholders
      Equity                                                                                                      |                                                |             
|Liabilities:                                                                                                                                    |                                                |             
|Deposits:                                                                                                                                       |                                                |             
|Noninterest-bearing demand
      deposits                                                                                                       | $    63,759                                    | $    54,393 
|Interest-bearing
      deposits                                                                                                                 | 390,111                                        | 372,365     
|                                                                                                                                                |                                                |             
|Total
      deposits                                                                                                                            | 453,870                                        | 426,758     
|                                                                                                                                                |                                                |             
|Federal funds purchased and securities
      sold     Under
      repurchase agreements                                                         | 12,504                                         | 19,707      
|Federal Home Loan Bank
      advances                                                                                                           | 57,026                                         | 47,551      
|Other borrowings                                                                                                                                | 4,633                                          | 2,911       
|Accrued expenses and other
      liabilities                                                                                                    | 5,325                                          | 5,895       
|                                                                                                                                                |                                                |             
|Total
      liabilities                                                                                                                         | 533,358                                        | 502,822     
|                                                                                                                                                |                                                |             
|                                                                                                                                                |                                                |             
|Stockholders Equity:                                                                                                                           |                                                |             
|Capital Stock-no par value.
      Authorized    20,000,000
      shares; issued and outstanding    4,761,314 shares at June
      30, 2002      | 25,719                                         | -           
|Common Stock-$5 par value.
      Authorized    20,000,000
      shares; issued and outstanding
           4,739,139 shares at December 31, 2001 | -                                              | 23,696      
|Capital surplus                                                                                                                                 | -                                              | 1,894       
|Retained earnings                                                                                                                               | 20,388                                         | 18,198      
|Accumulated other comprehensive
      income,    net of
      tax                                                                               | 1,383                                          | 986         
|                                                                                                                                                |                                                |             
|Total
      stockholders equity                                                                                                                | 47,490                                         | 44,774      
|                                                                                                                                                |                                                |             
|Total
      liabilities and stockholders equity                                                                                                | $  580,848                                     | $  547,596  
|                                                                                                                                                |                                                |             

See accompanying notes to
consolidated financial statements.

3

---



GB&T BANCSHARES, INC. AND
SUBSIDIARIES
Consolidated Statements of Income
(Unaudited)

|                                                                       | Three months ended
June 30,                  | Six months ended
June 30,                   
|---------------------------------------------------------------------- | -------------------------------------------- | --------------------------------------------
|                                                                       |                                              | 2002                                        
|                                                                       |                                             
|                                                                       | (amounts in thousands, except per
share data | (amounts in thousands, except per
share data
|Interest income:                                                       |                                              |                                             
|Loans, including fees                                                  | $                                            | 8,390                                       
|Investment securities:                                                 |                                              |                                             
|Taxable                                                                |                                              | 998                                         
|Nontaxable                                                             |                                              | 177                                         
|Federal funds sold                                                     |                                              | 18                                          
|Interest-bearing deposits in banks                                     |                                              | 9                                           
|                                                                       |                                              |                                             
|Total interest income                                                  |                                              | 9,592                                       
|                                                                       |                                              |                                             
|                                                                       |                                              |                                             
|Interest expense:                                                      |                                              |                                             
|Deposits                                                               |                                              | 2,798                                       
|Federal funds purchased and securities soldunder repurchase agreements |                                              | 53                                          
|Federal Home Loan Bank advances                                        |                                              | 745                                         
|Other borrowings                                                       |                                              | 31                                          
|                                                                       |                                              |                                             
|Total interest expense                                                 |                                              | 3,627                                       
|                                                                       |                                              |                                             
|                                                                       |                                              |                                             
|Net interest income                                                    |                                              | 5,965                                       
|                                                                       |                                              |                                             
|Provision for loan losses                                              |                                              | 204                                         
|                                                                       |                                              |                                             
|                                                                       |                                              |                                             
|Net interest income after                                              |                                              |                                             
|Provision for loan losses                                              |                                              | 5,761                                       
|                                                                       |                                              |                                             
|                                                                       |                                              |                                             
|Other income:                                                          |                                              |                                             
|Service charges on deposit accounts                                    |                                              | 928                                         
|Mortgage origination fees                                              |                                              | 232                                         
|Insurance commissions                                                  |                                              | 151                                         
|Gain (loss) on sale of securities                                      |                                              | -                                           
|Other operating income                                                 |                                              | 296                                         
|                                                                       |                                              |                                             
|Total Other income                                                     |                                              | 1,607                                       
|                                                                       |                                              |                                             
|                                                                       |                                              |                                             
|Other expense:                                                         |                                              |                                             
|Salaries and employee benefits                                         |                                              | 2,950                                       
|Net occupancy and equipment expense                                    |                                              | 878                                         
|Other operating expenses                                               |                                              | 1,351                                       
|                                                                       |                                              |                                             
|Total other expense                                                    |                                              | 5,179                                       
|                                                                       |                                              |                                             
|                                                                       |                                              |                                             
|Income before income taxes                                             |                                              | 2,189                                       
|                                                                       |                                              |                                             
|Income tax expense                                                     |                                              | 710                                         
|                                                                       |                                              |                                             
|                                                                       |                                              |                                             
|Net income                                                             | $                                            | 1,479                                       
|                                                                       |                                              |                                             
|                                                                       |                                              |                                             
|Earnings per share:                                                    |                                              |                                             
|Basic                                                                  | $                                            | 0.31                                        
|                                                                       |                                              |                                             
|Diluted                                                                | $                                            | 0.30                                        
|                                                                       |                                              |                                             
|                                                                       |                                              |                                             
|Weighted average shares                                                |                                              |                                             
|Basic                                                                  |                                              | 4,761                                       
|                                                                       |                                              |                                             
|Diluted                                                                |                                              | 4,915                                       
|                                                                       |                                              |                                             
|                                                                       |                                              |                                             
|Cash dividends per common share                                        | $                                            | 0.085                                       
|                                                                       |                                              |                                             

See accompanying notes to consolidated financial statements.

4

---



GB&T BANCSHARES, INC. AND
SUBSIDIARIES
Consolidated Statements of ComprehensiveIncome

|                                                                                                                         | Three months ended June
      30,        |       | Six months ended June 30,
|------------------------------------------------------------------------------------------------------------------------ | ---------------------------------------- | ----- | -------------------------
|                                                                                                                         | 2002                                     | 2001  |                          
|                                                                                                                         |                                          |       |                          
|                                                                                                                         | (Dollars in thousands)
      (unaudited)
|                                                                                                                         |                                          |       |                          
|Net Income                                                                                                               | $                                        | 1,479 | $                        
|                                                                                                                         |                                          |       |                          
|                                                                                                                         |                                          |       |                          
|Unrealized gains on
      securities
         available-for-sale arising during period, net of tax                       |                                          | 831   |                          
|                                                                                                                         |                                          |       |                          
|Reclassification
      adjustment for gains realized on
         securities available-for-sale in net income, net of tax |                                          | -     |                          
|                                                                                                                         |                                          |       |                          
|                                                                                                                         |                                          |       |                          
|Other comprehensive income                                                                                               |                                          | 831   |                          
|                                                                                                                         |                                          |       |                          
|                                                                                                                         |                                          |       |                          
|Comprehensive income                                                                                                     | $                                        | 2,310 | $                        
|                                                                                                                         |                                          |       |                          



### Consolidated Statements of
Stockholders' Equity
Six Months Ended June 30, 2002

|                                           | (Amounts in thousands) |              
|------------------------------------------ | ---------------------- | -------------
|                                           | (unaudited)            |              
|                                           |                        |              
|                                           |                        |              
|                                           |                        |              
|                                           |                        |              
|                                           |                        |              
|                                           |                        |              
|Balance, December 31, 2001                 | 4,739                  | $  23,696    
|Net income                                 |                        |              
|Options exercised                          | 22                     | 111          
|Dividends declared$0.165 per share         |                        |              
|Other comprehensive income                 |                        |              
|                                           |                        |              
|                                           |                        |              
|Balance, June 30, 2002                     | 4,761                  | 23,807       
|Reclassification of stock to
no par stock* |                        | (23,807)     
|                                           |                        |              
|                                           |                        |              
|Balance, June 30, 2002                     | 4,761                  | $     
    
-
|                                           |                        |              

* Effective June 30, 2002, the Company changed its common stock from $5 par value to no par
value.

5

---



GB&T BANCSHARES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited)

Six months ended
June 30,2002

2001Operating ActivitiesNet income
$
2,976
$
1,227Adjustments to reconcile net income to net cash
  Provided by operating activities:Depreciation

662

460Provision for loan losses

387

808Amortization and (accretion), net

67

52Securities (gains) losses, net

(137)

(76)Net increase in other assets

(1,003)

(1,640)Net decrease in other liabilities

(570)

(224)Net cash provided by operating activities

2,382

607Investing ActivitiesPurchase of investment securities available for sale

(21,661)

(30,839)Purchase of Federal Home Loan Bank stock

(1,766)

-Proceeds from sales of investment securities available for sale

12,116


  
7,317Principal collections and maturities of investment securities
    available for sale

10,677

26,880Net increase in interest-bearing deposits in other banks

(494)

(571)Net increase in federal funds sold

(965)

(16,899)Net increase in loans

(28,299)

(8,315)Proceeds from sales of real estate acquired through foreclosure

383

20Purchases of premises and equipment

(1,963)

(937)Net cash used in investing activities

(31,972)

(23,344)Financing ActivitiesNet increase in deposits

27,112

23,737Net decrease in federal funds purchased and securitiessold under repurchase agreements

(7,203)

(5,822)Proceeds from issuance of long-term debt, other borrowings andFederal Home Loan Bank advances

19,500

4,296Payments on long-term debt, other borrowings and FederalHome Loan Bank advances

(8,303)

(458)Dividends paid to stockholders

(786)

(607)Proceeds from issuance of common stock

129

67Net cash provided by financing activities

30,449

21,213Net increase (decrease) in cash and due from banks

859

(1,524)Cash and due from banks at beginning of period

18,097

16,332Cash and due from banks at end of period
$
18,956
$
14,808Supplemental disclosure of cash paid during the period for:Interest
$
8,807
$
11,002Income taxes
$
1,816
$
920


See accompanying notes to consolidated financial statements.

6

---



GB&T BANCSHARES, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)



NOTE 1.         BASIS OF PRESENTATION

The unaudited consolidated financial statements include the accounts of GB&T Bancshares, Inc.
and its wholly owned subsidiaries, Gainesville Bank & Trust, United Bank & Trust,
Community Trust Bank and Community Loan Company (collectively “the Company”).

The accompanying unaudited consolidated financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of America, for interim financial information and with instructions
for Form 10-Q.  Accordingly, they do not include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements.  In the opinion of management, all adjustments (consisting of normal
and recurring adjustments) considered necessary for a fair presentation have been included. The results of operations for the
three and six-month periods ended June 30, 2002 is not necessarily indicative of the results that may be expected for the year ending December
31, 2002.



NOTE 2.        MERGER
AGREEMENT WITH HOME TOWN BANK OF VILLA
RICA

Effective June 13, 2002, the Company entered into an agreement and Plan of Reorganization
("the Agreement") to merge
Home Town Bank of Villa Rica, Villa Rica, Georgia, into GB&T Bancshares, Inc.  Terms of the agreement call for each
shareholder of Home Town Bank of Villa Rica to receive either $18.00 in cash or 1.0588 shares of GB&T
capital stock for each share of
Home Town Bank of Villa Rica common stock or a combination of the two.  The total cash consideration for conversion of all of the
Home Town Bank of Villa Rica shares is subject to an overall limit of 50 percent.  The merger is subject to approval of the
shareholders of Home Town Bank of Villa Rica and federal and state regulatory authorities.

7

---



GB&T BANCSHARES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)

NOTE 3.      EARNINGS PER COMMON SHARE
(in
thousands, except per share data)

Presented below is a summary of the components used to calculate basic and diluted earnings per
share for the three and six month periods ended June 30, 2002 and 2001.

|                                            |   |       | Quarters ended June 30,  
|------------------------------------------- | - | ----- | -------------------------
|                                            |   |       | 2002                     
|                                            |   |       |                          
|Basic Earnings Per Share:                   |   |       |                          
|Weighted average common shares outstanding  |   | 4,761 |                          
|                                            |   |       |                          
|                                            |   |       |                          
|Net income                                  | $ | 1,479 | $                        
|                                            |   |       |                          
|                                            |   |       |                          
|Basic earnings per share                    | $ | 0.31  | $                        
|                                            |   |       |                          
|                                            |   |       |                          
|Diluted Earnings Per Share:                 |   |       |                          
|Weighted average common shares outstanding  |   | 4,761 |                          
|Net effect of the assumed exercise of stock |   |       |                          
|Options based on the treasury stock method  |   |       |                          
|using average market prices for the period  |   | 154   |                          
|                                            |   |       |                          
|Total weighted average common shares and    |   |       |                          
|Common stock equivalents outstanding        |   | 4,915 |                          
|                                            |   |       |                          
|                                            |   |       |                          
|Net income                                  | $ | 1,479 | $                        
|                                            |   |       |                          
|                                            |   |       |                          
|Diluted earnings per share                  | $ | 0.30  | $                        
|                                            |   |       |                          
|                                            |   |       |                          
|                                            |   |       | Six Months ended June 30,
|                                            |   |       | 2002                     
|                                            |   |       |                          
|Basic Earnings Per Share:                   |   |       |                          
|Weighted average common shares outstanding  |   | 4,759 |                          
|                                            |   |       |                          
|                                            |   |       |                          
|Net income                                  | $ | 2,976 | $                        
|                                            |   |       |                          
|                                            |   |       |                          
|Basic earnings per share                    | $ | 0.63  | $                        
|                                            |   |       |                          
|                                            |   |       |                          
|Diluted Earnings Per Share:                 |   |       |                          
|Weighted average common shares outstanding  |   | 4,759 |                          
|Net effect of the assumed exercise of stock |   |       |                          
|Options based on the treasury stock method  |   |       |                          
|using average market prices for the period  |   | 139   |                          
|                                            |   |       |                          
|Total weighted average common shares and    |   |       |                          
|Common stock equivalents outstanding        |   | 4,898 |                          
|                                            |   |       |                          
|                                            |   |       |                          
|Net income                                  | $ | 2,976 | $                        
|                                            |   |       |                          
|                                            |   |       |                          
|Diluted earnings per share                  | $ | 0.61  | $                        
|                                            |   |       |                          

8

---



GB&T BANCSHARES, INC. AND SUBSIDIARIES

Item 2.   MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND
              
RESULTS OF
OPERATIONS



The following is management’s discussion and analysis of certain significant factors which
have affected our financial position and operating results including our wholly-owned subsidiaries, Gainesville Bank & Trust,
United Bank & Trust, Community Trust Bank and Community Loan Company during the periods included in the accompanying
consolidated financial statements.

Forward-Looking Statements

Some of the statements made in this quarterly report (and in other documents to which we
refer) are “forward-looking statements.”  When used in this document, the words, “anticipate,”
“believe,” “estimate,” and similar expressions generally identify forward-looking statements.  These
statements are based on the beliefs, assumptions, and expectations of our management, and on information currently available to
those members of management.  They are expressions of historical fact, not guarantees of future performance. 
Forward-looking statements include information concerning possible or assumed future results of our operations.

Forward-looking statements involve risks, uncertainties, and assumptions, and certain factors
could cause actual results to differ from results expressed or implied by the forward-looking statements, including:

> economic conditions (both generally and in the markets where we operate);
>     competition from other companies that provide financial services similar to those we offer;
>     government regulation and legislation;
>     changes in interest rates; and
>     unexpected changes in the financial stability and liquidity of our credit customers.

We believe these forward-looking statements are reasonable.  You should not, however, place
undue reliance on these forward-looking statements, because the future results and stockholder values of the Company may differ
materially from those expressed or implied by these forward-looking statements.

Financial Condition

We reported consolidated total assets of $581 million at June 30, 2002 compared to $548 million at
December 31, 2001, representing an increase of $33 million or 6.0%.  We continued to experience growth in total assets, loans
and deposits during the six months ended June 30, 2002. Total loans increased by $28 million or 6.7% for the six months ended June
30, 2002.  Total deposits increased $27 million or 6.3% for the six months ended June 30, 2002.  Deposit growth almost
matched loan growth during the period resulting in a loan to deposit ratio of 98.5%, up from 98.1% at December 31, 2001.



9

---



GB&T BANCSHARES, INC. AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (Continued)



Liquidity and Capital Resources

Liquidity management involves the matching of the cash flow requirements of customers who may be
either depositors desiring to withdraw funds or borrowers needing assurance that sufficient funds will be available to meet their
credit needs and our ability to meet those needs.  We seek to meet liquidity requirements primarily through management of
short-term investments, monthly amortizing loans, maturing single payment loans, and maturities of securities and
prepayments.  Also we maintain relationships with correspondent banks which could provide funds on short notice.  As of
June 30, 2002, we had borrowed under Federal funds purchase lines and securities sold under agreement to repurchase, $12.5 million
compared to $19.7 million at December 31, 2001.

Our liquidity and capital resources are monitored on a periodic basis by management, State and
Federal regulatory authorities.  Management reviews liquidity on a periodic basis to monitor and adjust liquidity as
necessary.  Management has the ability to adjust liquidity by selling securities available for sale, selling participations in
loans we generate and accessing available funds through various borrowing arrangements.  Our short-term investments and
available borrowing arrangements are adequate to cover any reasonably anticipated immediate need for funds.

Our liquidity ratio was 18.52% at June 30, 2002, above our policy minimum ratio of 15%. 
Liquidity is measured by the ratio of net cash, Federal funds sold and securities to net deposits and short-term liabilities. In
the event the banks need to generate additional liquidity, funding plans would be implemented as outlined in the liquidity policy
of the banks. The subsidiary banks have lines of credit available to meet any unforeseen liquidity needs.  Also, the Banks
have relationships with the Federal Home Loan Bank of Atlanta, which provide funding for loan growth on an as needed
basis.

10

---



GB&T BANCSHARES, INC. AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (Continued)



As of June 30, 2002, the Company and the Banks were considered to be well-capitalized as defined
in the FDIC Improvement Act and based on regulatory minimum capital requirements.  The Company and its bank
subsidiaries’ actual capital ratios are presented in the following table.

|                                        |        |        |    | FOR CAPITAL |     | TO BE      
|--------------------------------------- | ------ | ------ | -- | ----------- | --- | -----------
|                                        |        |        |    | ADEQUACY    |     | WELL       
|                                        |        | ACTUAL |    | PURPOSES    |     | CAPITALIZED
|                                        |        |        |    |             |     |            
|                                        |        |        |    |             |     |            
|As of June 30, 2002                     |        |        |    |             |     |            
|Total Capital to Risk Weighted Assets:  |        |        |    |             |    
|Consolidated                            |        | 11.17% |    | 8%          |     | N\A        
|Gainesville Bank & Trust                | 10.11% |        | 8% |             | 10%
|United Bank & Trust                     | 12.70% |        | 8% |             | 10%
|Community Trust Bank                    | 10.96% |        | 8% |             | 10%
|Tier I Capital to Risk Weighted Assets: |        |        |    |             |    
|Consolidated                            |        | 9.92%  |    | 4%          |     | N\A        
|Gainesville Bank & Trust                | 8.96%  |        | 4% |             | 6% 
|United Bank & Trust                     | 11.45% |        | 4% |             | 6% 
|Community Trust Bank                    | 9.73%  |        | 4% |             | 6% 
|Tier I Capital to Average Assets:       |        |        |    |             |    
|Consolidated                            |        | 8.01%  |    | 4%          |     | N\A        
|Gainesville Bank & Trust                | 7.12%  |        | 4% |             | 5% 
|United Bank & Trust                     | 8.88%  |        | 4% |             | 5% 
|Community Trust Bank                    | 8.18%  |        | 4% |             | 5% 

Results of Operations

Our profitability is determined by our ability to effectively manage interest income and expense,
to minimize loan and security losses, to generate noninterest income, and to control operating expenses.  Since interest rates
are determined by market forces and economic conditions beyond our control, our ability to generate net interest income is
dependent upon our ability to obtain an adequate net interest spread between the rate paid on interest-bearing liabilities and the
rate earned on interest-earning assets.  The net interest margin was 4.41% for the six months ended June 30, 2002, compared to
4.42% for the same period in 2001.  In the first six months of 2002, the yield on earning assets decreased to 7.30% from 9.07%
for the same period in 2001, and the cost of interest bearing liabilities decreased to 3.35% from 5.32%.

Net interest income increased $576,000 or 10.69% for the three months ended June 30, 2002 compared
to the same period in 2001.  The net increase consists of a decrease in interest income of $1,299,000 or 11.93% less a
decrease in interest expense of $1,875,000 or 34.08% for the three-month period.  Net interest income increased $776,000 or
7.26% for the six months ended June 30, 2002 compared to the same period in 2001.  The net increase consists of a decrease in
interest income of $2,964,000 or 13.50% less a decrease in interest expense of $3,740,000 or 33.20% for the six-month period. 
The increase in net interest income is due to a combination of the increase in the
net interest spread to 3.95% for the six
months ended June 30, 2002 from 3.75% for the same period in 2001 and increases in volume.

11

---



GB&T BANCSHARES, INC. AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (Continued)



Our provision for loan losses decreased by $260,000 or 56.03% during the three months ended June
30, 2002 as compared to the same period in 2001.  Our provision for loan losses decreased by $421,000 or 52.10% during the six
months ended June 30, 2002 as compared to the same period in 2001.  The analysis below indicates
a decrease of $96,000 in net
charge-offs for the six months ended June 30, 2002 as compared to the same period in 2001.  The allowance for loan losses at
June 30, 2002 was $5,716,000 or 1.28% of total loans compared to 1.43% at June 30, 2001.  Based on management’s
evaluation, the allowance is adequate to absorb any potential loan losses at June 30, 2002.  The allowance for loan losses is
evaluated monthly and adjusted to reflect the risk in the portfolio.

The following table summarizes the allowance for loan losses for the six-month period ended June
30, 2002 and 2001.

| |                                                         |   | 2002                   |  |   | 2001   
| | ------------------------------------------------------- | - | ---------------------- |  | - | -------
| |                                                         |   |                        |  |   |        
| |                                                         |   | (Dollars in Thousands)
| |                                                         |   |                       
| | Average amount of loans outstanding                     | $ | 428,483                |  | $ | 393,353
| |                                                         |   |                        |  |   |        
| |                                                         |   |                        |  |   |        
| | Allowance  for loan losses balance, beginning of period | $ | 5,522                  |  | $ | 5,099  
| |                                                         |   |                        |  |   |        
| |                                                         |   |                        |  |   |        
| | Less charge-offs                                        |   |                        |  |   |        
| | Commercial loans                                        |   | -                      |  |   | (49)   
| | Real estate loans                                       |   | -                      |  |   | (23)   
| | Consumer  loans                                         |   | (495)                  |  |   | (350)  
| |                                                         |   |                        |  |   |        
| | Total Charge-offs                                       |   | (495)                  |  |   | (422)  
| |                                                         |   |                        |  |   |        
| |                                                         |   |                        |  |   |        
| | Plus recoveries                                         |   |                        |  |   |        
| | Commercial loans                                        |   | 1                      |  |   | 3      
| | Real estate loans                                       |   | 170                    |  |   | 10     
| | Consumer loans                                          |   | 131                    |  |   | 120    
| |                                                         |   |                        |  |   |        
| | Total recoveries                                        |   | 302                    |  |   | 133    
| |                                                         |   |                        |  |   |        
| | Net charge-offs                                         |   | (193)                  |  |   | (289)  
| |                                                         |   |                        |  |   |        
| |                                                         |   |                        |  |   |        
| | Plus provision for loan losses                          |   | 387                    |  |   | 808    
| |                                                         |   |                        |  |   |        
| |                                                         |   |                        |  |   |        
| | Allowance  for loan losses balance, end of period       | $ | 5,716                  |  | $ | 5,618  
| |                                                         |   |                        |  |   |        
| |                                                         |   |                        |  |   |        
| | Net charge-offs to average loans                        |   | 0.045%                 |  |   | 0.073% 
| |                                                         |   |                        |  |   |        

12

---



GB&T BANCSHARES, INC. AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (Continued)



The following table is a summary of nonaccrual, past due and restructured debt. The numbers
indicate decreases of $1,098,000 in nonaccrual loans and increases of $92,000 in past due loans over 90 days. The decrease in
nonaccrual real estate loans was due primarily to the foreclosure on one loan
carried in other real estate at fair value.  The majority of the
nonaccrual and past due balances in consumer loans are related to Community Loan Company, our consumer finance company.  Due
to the nature of the consumer finance business, these levels are normal and will consistently remain higher than those seen in the
banking industry.  Community Loan Company’s reserve for loan loss is also higher to cover these higher levels of
nonaccrual and past due loans.   There is minimal or no loss anticipated on the remaining real estate loans in nonaccrual
and past due loans due to the value of the underlying collateral.

| |                   | June 30,
      2002         
| | ----------------- | ----------------------------
| |                   |                             
| |                   |                             
| |                   |                             
| |                   |                             
| |                   |                             
| |                   | (Dollars in
  Thousands)    
| |                   |                             
| |                   |                             
| | Real estate loans | $                           
| | Commercial loans  |                             
| | Consumer loans    |                             
| |                   |                             
| | Total             | $                           
| |                   |                             
| |                   |                             
| |                   | June 30, 2001               
| |                   |                             
| |                   |                             
| |                   |                             
| |                   |                             
| |                   |                             
| |                   | (Dollars in
      Thousands)
| |                   |                             
| |                   |                             
| | Real estate loans | $                           
| | Commercial loans  |                             
| | Consumer loans    |                             
| |                   |                             
| | Total             | $                           
| |                   |                             

Our policy is to discontinue the accrual of interest income when, in the opinion of management,
collection of such interest becomes doubtful.  This status is determined when; (1) there is a significant deterioration in the
financial condition of the borrower and full repayment of principal and interest is not expected; and (2) the principal or interest
is more than 90 days past due, unless the loan is both well-secured and in the process of collection.  Accrual of interest on
such loans is resumed when, in management’s judgment, the collection of interest and principal becomes probable.

Loans classified for regulatory purposes as loss, doubtful, substandard, or special mention that
have not been included in the table above do not represent or result from trends or uncertainties which management reasonably
expects will materially impact future operating results, liquidity or capital resources.  These classified loans do not
represent material credits about which management is aware of any information which causes management to have serious doubts as to
the ability of such borrowers to comply with their loan repayment terms.

13

---



GB&T BANCSHARES, INC. AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (Continued)



Other income for the three months ended June 30, 2002, increased by $72,000 or 4.69% compared to
the same period in 2001.  Service charges increased by $133,000 and mortgage origination fees increased by $7,000. These
increases were offset by decreases in insurance commissions of $18,000 and gain on sale of securities of $76,000.  Other
income for the six months ended June 30, 2002, increased $559,000 or 19.08% compared to the same period in 2001.  Mortgage
origination fees increased by $156,000, gain on sale of securities increased by $61,000 and gain on sale of assets increased by
$115,000.  The increases in other income
were partially offset by a $24,000 decrease in insurance commissions.  Mortgage origination fees increased as a result of
refinancing activity spurred by the decline in mortgage rates.

Other expenses decreased by approximately $730,000 or 12.35% for the three months ended June 30,
2002 compared to the same period in 2001.  The decrease is due primarily to a decrease in salaries and employee benefits of
$468,000 and a decrease in audit and professional fees of $231,000.  The decreases were partially offset by an increase in net
occupancy and equipment expense of $72,000.  Other expenses decreased by approximately $730,000 or 6.69% for the six months
ended June 30, 2002 compared to the same period in 2001.  The decrease is due primarily to a decrease in salaries and employee
benefits of $342,000 and a decrease in audit and professional fees of $358,000, which is partially offset by an increase in net
occupancy and equipment expense of $32,000.  The decreases in salaries and employee benefits is due to merger related
contractual payments to employees paid in the second quarter of 2001 related to the merger with Community Trust Financial Services
Corporation as well as the decreases in audit and professional fees which were
merger related expenses.

Income tax expense increased by $440,000 and $737,000 for the three and six months ended June 30,
2002, compared to the same periods last year. The effective tax rate for the three-month period was 32.43%, compared to 49.00% for
the same period in 2001.  This decrease reflects non-deductible merger expenses related to the merger of GB&T Bancshares,
Inc. and Community Trust Financial Services Corporation taken in the second quarter of 2001.  The effective tax rate for the
six-month period ended June 30, 2002 was 32.18% compared to 35.49% for the same period in 2001.

Net income increased by $1,198,000 or 426.33%, for the three months ended June 30, 2002 compared
to the same period in 2001.  Exclusive of non-recurring merger expenses of $980,000 incurred during the second quarter of 2001
related to the merger with Community Trust Financial Services Corporation, net income increased by $218,000 or 17.29%.  Net
income increased by $1,749,000 or 142.54% for the six months ended June 30, 2002 compared to the same period in 2001. 
Exclusive of non-recurring expenses of $1,090,000 incurred during the six months ending June 30, 2001 related to the aforementioned
merger, net income increased by $659,000 or 28.44%.

During the third quarter of 2001, we signed contracts with Jack Henry & Associates, Inc. to
purchase hardware and software solutions to better equip the company for future operations.  These contracts amounted to
approximately $1,200,000 and will afford us growth potential and allow us to process all affiliates on the same system.  The
conversion to the new system is anticipated to be complete by the third quarter of 2002.  As of June 30, 2002, approximately
$300,000 remains to be paid on the contracts.

We are not aware of any other known trends, events or uncertainties, other than the effect of
events as described above, that will have or that are reasonably likely to have a material effect on its liquidity, capital
resources or operations.  We are not aware of any current recommendations by the regulatory authorities, which, if they were
implemented, would have such an effect.

14

---



GB&T BANCSHARES, INC. AND SUBSIDIARIES



Item 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our net interest income and the fair value of our financial instruments (interest earning assets
and interest bearing liabilities) are influenced by changes in market interest rates. We actively manage our exposure to interest
rate fluctuations through policies established by the Asset/Liability Management Committee (the "ALCO"). The ALCO meets regularly
and is responsible for approving asset/liability management policies, developing and implementing strategies to improve balance
sheet positioning and net interest income and assessing the interest rate sensitivity of the Banks.



PART II - OTHER INFORMATION



# Item 4.     Submission of Matters to a vote of Securities
Holders

The annual meeting of the Stockholders of GB&T Bancshares, Inc. was held on May 20,
2002.  The meeting had been called pursuant to written notice for (1) the purpose of considering and voting upon
the election of ten directors to constitute the Board of Directors to serve until the next annual meeting and until their
successors are elected and qualified and (2) to consider an amendment to the Company’s 1997 Stock Incentive Plan to increase
the number of shares of Common Stock that are available for the grant of awards under the Plan from 325,000 shares to 700,000
shares.  The results of the voting were as follows:

|(1) Election of
Directors      | FOR       | AGAINST | WITHHELD
|------------------------------ | --------- | ------- | --------
|                               |           |         |         
|Donald J.
Carter               | 3,146,454 | 0       | 22,987  
|Dr. John W.
Darden             | 3,146,454 | 0       | 22,987  
|Bennie E.
Hewett               | 3,146,454 | 0       | 22,987  
|Richard A. Hunt,
Jr.           | 3,146,454 | 0       | 22,987  
|James L.
Lester                | 3,146,454 | 0       | 22,987  
|John E. Mansfield,
Sr.         | 3,146,454 | 0       | 22,987  
|F. Abit
Massey                 | 3,146,454 | 0       | 22,987  
|Samuel L.
Oliver               | 3,146,454 | 0       | 22,987  
|Alan A.
Wayne                  | 3,146,454 | 0       | 22,987  
|Phillip A.
Wilheit             | 3,146,454 | 0       | 22,987  
|                               |           |         |         
|(2) Amend Stock Incentive
Plan | 2,866,774 | 184,103 | 118,564 

Item 6.    
Exhibits and Reports on Form 8-K

(a)     
Exhibits

99.1         
Certification of Principal Executive Officer

99.2         
Certification of Principal Financial Officer

(b)     
Reports on Form 8-K

We did not file a report on Form 8-K during the quarter ending June 30, 2002.

15

---



SIGNATURES



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, thereunto duly authorized.



GB&T BANCSHARES, INC.



DATE: 8/14/2002                                             
BY: /s/ Richard A. Hunt                                                                                         
      Richard A. Hunt, Jr.
                                                                               
                President
and Chief Executive Officer



DATE: 8/14/2002                                            
BY: /s/ Gregory L. Hamby                                                                                         
    Gregory L. Hamby
                                                                                             
Executive Vice President &
                                                                                         
    Chief Financial Officer





16