Exhibit 13


                     FIRST COMMERCE CORP 2001 ANNUAL REPORT


                           FIRST COMMERCE CORPORATION


<PAGE>


OUR MISSION AT FIRST COMMERCE CORPORATION IS TO ENABLE OUR CLIENTS TO ACHIEVE
SUCCESS.

<PAGE>


                                    Contents

Letter to Shareholders                                          2

Selected Financial Data and Business of the Bank                3

Management's Discussion and Analysis
of Financial Condition and Operating Results                  4 - 6

Financial Statements: Balance Sheets                            7

Statements of Operations and Comprehensive Income               8

Statements of Changes in Stockholders' Equity                   9

Statements of Cash Flows                                        10

Notes to Financial Statements                                11 - 22

Report of Independent Accountants                               23

Board of Directors and Staff                                    24

Stockholder Information Back                                  Cover



This Annual Report to stockholders contains certain  forward-looking  statements
consisting  of estimates  with respect to the  financial  condition,  results of
operations and other business of First Commerce  Corporation that are subject to
various factors which could cause actual results to differ materially from those
estimates.  Factors that could  influence the estimates  include  changes in the
national,  regional,  and local market  conditions,  legislative  and regulatory
conditions, and an adverse interest rate environment.

A copy of Form 10-KSB,  including  the financial  statements  for the year ended
December 31, 2001, as filed with the Securities and Exchange Commission, will be
furnished without charge to the Corporation's  stockholders upon written request
to First Commerce Corporation,  301 South McDowell Street, Suite 100, Charlotte,
North Carolina 28204, Attn: David E. Keul.

                                        1

<PAGE>

Dear Fellow Shareholders

We are  pleased to  announce  that First  Commerce  Corporation  enjoyed  record
earnings in 2001.  These earnings were achieved despite eleven cuts in the prime
rate, a challenging  economy, and a dramatic increase in our income tax expense.
The Corporation earned $707,000 ($.69 per diluted share) for 2001. This is a 10%
increase over year 2000  earnings.  We achieved  these results by  significantly
increasing  non-interest  income,  aggressively  managing  the  bond  portfolio,
collecting   fees  owed  for  services   rendered,   and  doggedly   controlling
non-interest expenses.

Our balance sheet grew as well.  Loans grew by 20%, and total assets grew by 22%
when compared to year-end 2000.  While deposits grew at a lesser rate,  this was
the result of  management's  decision to substitute  borrowings and  non-deposit
funds for higher cost Certificate of Deposits.  In doing so, we have reduced our
cost of funds and balanced our liability  maturities  to assure more  consistent
liquidity.

We had no non-earning  loans or significant  loan losses in 2001. We are able to
maintain this quality  portfolio  because our loan officers have a close working
relationship with our clients.  They help clients evaluate their business plans,
anticipate  challenges,  and develop revised plans to meet these challenges.  To
enhance this effort,  we added some new employees:  Ethel  Milliken,  manager of
loan operations,  and Mike Prickett and Stuart Hester, commercial lenders. David
Lawing also joined our Bank to handle loan compliance and review.

Our Board and employees  spent many hours last year refining our strategic plan.
We developed additional products and programs to serve our clients and provide a
level of service  that is beyond their  expectations.  Adding these new products
and  programs is helping us to achieve our mission of  "enabling  our clients to
achieve success".

One of these  services is check  imaging.  Our  Internet  web-site  now provides
copies of each client's checks. By visiting www.firstcommercebank.com,  a client
can not only view his statement;  but also inspect front and back copies of each
check he has written.  We will also provide  copies in  customers'  monthly bank
statements.

Other services  added in 2001 include daily cash  management,  stock  brokerage,
life insurance and trust management. For you, our shareholders, we are providing
additional  investor  information on our website. We have analysts' reports from
Equity Research Services and Anderson & Strudwick,  Inc. on our website. We also
have available stock price information,  quarterly reports,  and press releases.
If you have not  visited  our  website  recently,  please do so and  select  the
investor relations page.

In 2000 we recognized the need for additional  capital to fund future growth and
assure strong capitalization for the Bank. We evaluated several capital sources,
including a secondary  stock  offering,  and decided the most  effective  way to
raise  capital was through the  issuance  of trust  preferred  securities.  Last
Spring,  we formed a holding  company  and,  subsequently,  issued $5 million in
trust preferred  securities.  These securities are basically debentures that are
calculated into our Tier I capital ratio. Issuing these securities allowed us to
improve the capital  strength of the Bank,  without  diluting  your  shareholder
position.

In news from the Board,  Keith Brunnemer,  our founding  Chairman,  stepped down
from the Board of Directors shortly after the 2001 annual meeting.  Jim Preston,
previously Vice Chairman,  was elected  Chairman.  He is joined on the Executive
Committee by David Sidbury,  Earl Leake, and Harriet Kaplan.  We know this group
will continue to provide strong leadership and guidance for our company.

2001 was a  challenging  and  successful  year.  We thank  you for your  ongoing
support and look forward to continued growth and success in 2002.

Sincerely,


/s/ James Y. Preston
--------------------
James Y. Preston
Chairman




/s/ Wesley W. Sturges
---------------------
Wesley W. Sturges
President & Chief Executive Officer


                                        2
<PAGE>


S E L E C T E D                  F I N A N C I A L                       D A T A



The following  table sets forth certain  selected  financial data as of, and for
the years ended, December 31, 2001, 2000, and 1999.

                                     2001          2000          1999
                              (Dollars in Thousands, Except Per Share Data)

BALANCE SHEET

Assets                             $136,044       111,322      $ 93,894
Deposits                            110,728       100,171        85,919
Loans                                93,869        78,009        66,383
Allowance for loan losses             1,263         1,052           945
Securities available for sale        30,614        26,062        18,930
Earning assets                      127,683       105,312        89,604
Other borrowings                     15,000         2,000            --
Stockholders' equity                  9,555         8,718         7,647

STATEMENT OF OPERATIONS

Net interest income                $  4,103      $  3,976      $  3,353
Provision for loan losses               211           181           187
Other income                            601           262           216
Other expense                         3,459         3,417         2,662
Net income                              707           640           720

PER SHARE DATA (1)
Net income, Basic                  $   0.70      $   0.63      $   0.71
Net income, Diluted                    0.69          0.63          0.70
Book value                             9.42          8.59          7.53

1Per share data above  reflects a 10% stock  dividend  in 2001  Business  of the
Corporation

B u s i n e s s   o f   t h e   C o r p o r a t i o n

General

First   Commerce   Bank  was   incorporated   on  June  7,  1996,   as  a  North
Carolina-chartered commercial bank, and opened for business on July 31, 1996. On
May 24, 2001,  the Bank became the wholly- owned  subsidiary  of First  Commerce
Corporation as each  outstanding  share of the Bank's common stock was exchanged
for one  share  of the  common  stock of First  Commerce  Corporation.  The Bank
operates  for the  primary  purpose of  serving  the  banking  needs of small to
medium-sized  businesses  in its market area.  It offers a wide range of banking
services, including checking and savings accounts;  commercial,  installment and
personal loans; safe deposit boxes; and other associated services. Specifically,
the Bank makes  business  loans  secured by real estate,  personal  property and
accounts receivable; unsecured business loans; consumer loans, which are secured
by consumer products, such as automobiles;  unsecured consumer loans; commercial
real estate loans;  and other loans.  The Bank's primary  sources of revenue are
interest  income from its lending  activities,  primarily  consisting  of making
business loans for small to  medium-sized  businesses,  and, to a lesser extent,
from its investment portfolio. The Bank also earns fees from lending and deposit
activities.  The major expenses of the Bank are interest on deposits and general
and administrative  expenses such as salaries,  employee benefits,  advertising,
and office occupancy.

Primary Market Area

Currently,  the Bank's market area is Mecklenburg  County,  North Carolina.  The
majority  of  Mecklenburg  County,  North  Carolina,  is composed of the City of
Charlotte.  Charlotte  and the  surrounding  metropolitan  area have a broad and
rapidly growing economic base, which includes the headquarters for several major
financial services institutions.  Charlotte is the center of a diverse,  growing
regional economy. It ranks as the 26th largest city in the United States.

                                        3

<PAGE>



          Management's Discussion and Analysis of Financial Condition
                             and Operating Results

The following  discussion is a summary of the financial  condition and operating
results of First  Commerce  Corporation,  the parent  holding  company for First
Commerce Bank. The analysis is intended to provide management's  overview of the
Corporation's overall operations for the periods indicated.

Financial Condition

December 31, 2001 compared to December 31, 2000

      The  Corporation's  total assets increased $24.7 million,  or 22.2%,  from
$111.3 million at December 31, 2000, to $136.0 million at December 31, 2001. The
increase was due  primarily to increases in loans and  securities  available for
sale.  These increases were primarily  funded by increases in deposits and other
borrowings.

      Cash and cash  equivalents  increased  $1.5  million,  or  28.9%,  to $6.7
million at December 31, 2001.  This increase was  attributable to an increase in
federal  funds sold from $1.0 million at December  31, 2000,  to $2.4 million at
December 31, 2001.

      Securities  available for sale increased $4.6 million,  or 17.5%, to $30.6
million at December 31,  2001,  from $26.1  million at December 31, 2000.  Total
securities  held at December 31, 2001 and 2000  consisted of Government  agency,
Municipal  Obligation,  Mortgage-backed and Trust Preferred  securities.  During
2001,  approximately  $39.4 million of securities were purchased,  $19.9 million
were  called,  paid-down  or matured and $15.4  million  were sold.  Most of the
securities  sold  were part of a bond  swap.  The bond swap was a method to sell
callable agency securities with a high probability of being called and replacing
them  with  slightly  higher  yielding  mortgage-backed  securities  or  similar
securities  with more earnings  potential  when the gain is aggregated  with the
future cash  flows.  The  resulting  gains from the sale of  securities  totaled
$123,000.  Management  does not engage in the  practice  of trading  securities;
rather,  the  Bank's  investment   portfolio  consists  entirely  of  securities
designated as available for sale.

      Loans increased $15.9 million,  or 20.3%, to $93.9 million at December 31,
2001,  from $78.0 million at December 31, 2000. The Bank's  borrowing  customers
are primarily  small and medium size  businesses  located in the Metro region of
Charlotte.  However,  the Bank does offer a  competitive  line of consumer  loan
products  and is seeking to offer these  products to a broad range of  potential
customers  in its  market  area.  The loan  portfolio's  composition  included a
variety of commercial, real estate, consumer, and installment loans. At December
31, 2001,  commercial  loans made up 32.7%,  real estate  secured  loans made up
61.4%,  and  installment  loans made up 5.9% of the loan  portfolio.  Management
anticipates  that loans will  continue to increase as long as interest  rates do
not rise significantly and the economy does not experience a marked downturn.

      Other  assets  increased  $2.4  million,  or  140.6%,  to $4.2  million at
December 31, 2001,  from $1.7  million at December 31, 2000.  This  increase was
primarily  attributable to an investment into a Bank Owned Life Insurance Policy
(BOLI) at the end of 2001 in the amount of $2.5  million.  Additionally,  at the
end of 2000,  the balance  included an Other Real Estate Owned (OREO),  at a net
realizable  value of  $532,000,  due to the  foreclosure  of a mortgage  held as
collateral for a loan.  The sale of this property  occurred in the first quarter
of 2001.

      Deposits increased $10.6 million,  or 10.5%, to $110.7 million at December
31, 2001,  from $100.2 million at December 31, 2000 with increases  primarily to
non-interest  bearing  accounts.  Prior to 2001, the Bank paid premium rates for
deposits,  when compared with local area competition.  During 2001,  competitive
products have been designed to attract  deposits in checking,  savings and money
market accounts, as well as certificates of deposit. Furthermore, certificate of
deposit rates have been priced competitively.  During the third quarter of 2001,
the Bank acquired $5.0 million in brokered CDs with a competitive  interest rate
for a term of six months At December 31,  2001,  there was no  concentration  of
deposits from one individual or entity; however, the Bank had 24.0% of its total
deposits in the $100,000 and over certificate of deposit category. This level of
activity in the  $100,000  and over  certificates  of deposits  was due, in some
cases,  to  individuals   allocating  their  deposits  among  several  financial
institutions  in order for each of their  various  accounts to  approximate  the
$100,000  deposit   insurance   limitation  of  the  Federal  Deposit  Insurance
Corporation  and the  aforementioned  $5.0 million  brokered-CD.  While the Bank
anticipates that deposits will continue to increase, the timing and magnitude of
deposit  growth  remains  difficult  to  predict  and is  affected  by the local
economy,  interest  rates paid on competing  investments  and the  confidence of
customers in the financial services industry.

      Other borrowings increased $13.0 million during the year, to $15.0 million
at December 31, 2001,  from $2.0 million at December 31, 2000. The components of
this  increase  consisted of $8.0 million in advances from the Federal Home Loan
Bank of Atlanta (FHLB) for a total outstanding of $10.0 million and the issuance
of pooled trust  preferred  securities of $5.0 million.  The proceeds from other
borrowings  were used to fund loan growth and satisfy the general  funding needs
of the Bank.

      Stockholders'  equity amounted to $9.6 million, or 7.0% of total assets at
December 31, 2001, compared to $8.7 million, or 7.8% of total assets at December
31, 2000. This

                                        4
<PAGE>


increase  in  stockholders'  equity and the  related  increase in book value per
share,  were  positively  impacted  by the  increase  in  the  market  value  of
securities available for sale. The decrease in stockholders' equity as a percent
of total assets was primarily  attributable to the rapid growth in balance sheet
items discussed above.

Liquidity

      In order to ensure that sufficient funds are available for loan growth and
deposit withdrawals,  as well as to satisfy general funding needs, the Bank must
maintain an adequate  level of liquidity.  Both assets and  liabilities  provide
sources of liquidity.  Asset  liquidity comes from the Bank's ability to convert
short-term  investments  into cash and from the maturity and  repayment of loans
and investment securities. Liability liquidity is provided by the Bank's ability
to attract deposits and borrow funds. The primary source of liability  liquidity
is the Bank's  customer base that provides core deposit  growth.  In addition to
the foregoing,  the Bank could obtain short- term liquidity through its existing
lines of credit with the Bankers  Bank of Atlanta,  Georgia,  and the FHLB.  The
overall  liquidity  position  of the Bank is  closely  monitored  and  evaluated
regularly.  Management  believes  the Bank's  liquidity  sources at December 31,
2001, were adequate to meet its operating needs.


Results of Operations
For the Year Ended December 31, 2001

      The result of  operations  for the year ended  December 31, 2001,  was net
income of  $707,000,  or $0.69 per diluted  share,  compared  with net income of
$640,000,  or $0.63 per diluted share, for the year ended December 31, 2000. For
the year ended December 31, 2001,  interest income was $8.3 million, an increase
of $0.3  million,  or 3.2%,  over the fiscal  2000  amount.  This  increase  was
primarily  attributable  to  increased  volume  in the loan  portfolio  that was
partially offset by reductions in the prime rate of interest from 9.50% to 4.75%
during the year.  Interest  expense was $4.2 million for the year ended December
31, 2001,  an increase of $0.1  million,  or 3.1%,  over the fiscal 2000 amount.
This  increase  was   primarily   attributable   to  the  increased   volume  in
interest-bearing  deposits  and FHLB  advances  that  was  partially  offset  by
re-pricing the certificates of deposits throughout the year. Net interest income
for the year ended  December  31,  2001,  was $4.1  million.  For the year ended
December 31, 2001, the yield on average  interest-earning assets was 7.30% while
the rate on average  interest-bearing  liabilities was 3.84%, resulting in a net
yield on interest-earning  assets of 3.62%. Future improvement in this net yield
will  depend on various  factors,  including  the Bank's  ability to continue to
successfully  market  higher-yielding  loan  products  and to  obtain  growth in
low-cost deposit accounts.

      The provision for loan losses was $211,000 for the year ended December 31,
2001,  an increase  of $30,000,  or 16.6%,  from the fiscal  2000  amount.  This
allowance was set aside to cover losses  inherent in the Bank's loan  portfolio.
There were no non-performing loans on the Bank's books at December 31, 2001. The
allowance  for loan losses was 1.35% of total loans  outstanding  as of December
31,  2001.  Management  reviews the  adequacy of the  allowance  for loan losses
regularly in order to maintain the  allowance at a level that is  sufficient  to
absorb  probable credit losses.  Management's  evaluation of the adequacy of the
allowance for loan losses is based on known and inherent risks in the portfolio,
adverse  situations that may affect  borrowers'  ability to repay, the estimated
value of underlying  collateral,  the composition of the overall loan portfolio,
current economic conditions and other relevant factors.

--------------------------------------------------------------------------------
Analysis of Allowance for Loan Losses
(Dollars in Thousands)
                                         December 31, 2001    2000

Beginning balance                         $1,052       $  945

Charge-offs:
    Residential, 1-4 families                 --           61
    Installment                               --           13
                                          ------       ------
Total Charge-offs                             --           74

Provision for loan losses                    211          181
                                          ------       ------

Ending Balance                            $1,263       $1,052
                                          ------       ------

Ratio of net charge offs during               --         0.09%
period of average loans outstanding
during the period

--------------------------------------------------------------------------------

      Management will continue to monitor the allowance for loan losses and make
future  additions  to the  allowance  through the  provision  for loan losses as
economic  conditions and loan portfolio  quality  dictate.  Although  management
maintains  the  allowance  for loan losses at a level which it  considers  to be
adequate to provide for losses,  there can be no  assurance  that future  losses
will not exceed estimated amounts or that additional  provisions for loan losses
will not be required in future periods. In addition,  management's determination
as to the amount of allowance for loan losses is subject to review by various

                                        5
<PAGE>


FIRST COMMERCE CORPORATION

regulatory agencies as part of their examination processes,  which may result in
the  establishment  of additional  allowances  based upon their judgments of the
information available to them at the time of their examination.

      Other income  totaled  $601,000 for the year ended  December 31, 2001,  an
increase of $339,000 over the 2000 amount. Other income included service fees on
deposit accounts,  various loan fees, safe deposit box rentals,  gain on sale of
securities  and various  other items.  The increase is primarily due to enhanced
efforts to collect  service  charge fees and higher levels of  brokered-mortgage
loans  resulting  from lower rates  during the first nine  months of 2001.  Also
included in other income is gain on sale of securities of $123,000.  As the Bank
continues to add accounts and fee income  services,  other income is expected to
increase and become a more significant part of the Bank's total income.

      Other expenses  totaled $3.5 million for the year ended December 31, 2001,
an  increase  of $42,000,  or 1.2%,  over the 2000  amount.  This  increase  was
primarily  attributable  to an increase  in  occupancy  expense  relating to the
addition of a branch  location in the second  quarter of 2000 and the  formation
cost of $50,000 for the parent holding company in 2001. The Corporation recorded
$327,000 of income tax expense for the year ended  December 31, 2001 compared to
no taxes in 2000.  In 2000 the  utilization  of deferred tax benefits  generated
from losses in prior periods mitigated the current liability.


For the Year Ended December 31, 2000

      The result of  operations  for the year ended  December 31, 2000,  was net
income of  $640,000,  or $0.63 per diluted  share,  compared  with net income of
$720,000,  or $0.70 per diluted share, for the year ended December 31, 1999. For
the year ended December 31, 2000,  interest income was $8.0 million, an increase
of $1.7  million,  or 27.3%,  over the fiscal 1999  amount.  This  increase  was
primarily attributable to increased volume in the loan portfolio,  along with an
overall  increase in interest rates.  Interest  expense was $4.0 million for the
year ended  December 31, 2000, an increase of $1.1 million,  or 37.2%,  over the
fiscal 1999 amount.  This increase was primarily  attributable  to the increased
volume in  interest-bearing  deposits,  along with the rates  noted  above.  Net
interest income for the year ended December 31, 2000, was $4.0 million.  For the
year ended December 31, 2000, the yield on average  interest-earning  assets was
8.29%  while  the  rate  on  average  interest-bearing  liabilities  was  4.37%,
resulting in a net yield on interest-earning assets of 4.11%. Future improvement
in this net yield will depend on various factors,  including, the Bank's ability
to continue to successfully market  higher-yielding  loan products and to obtain
growth in low-cost deposit accounts.

      The provision for loan losses was $181,000 for the year ended December 31,
2000, a decrease of $6,000, or 3.2%, from the fiscal 1999 amount. This allowance
was set aside to cover losses inherent in the Bank's loan portfolio.  There were
no non-performing  loans on the Bank's books at December 31, 2000; however,  the
Bank had one  foreclosed  property  with a carrying  value of  $532,000 in OREO,
resulting in a $60,000  charge-off.  The  allowance for loan losses was 1.35% of
total loans outstanding as of December 31, 2000.

      Other  income  was  $262,000  for the year ended  December  31,  2000,  an
increase  of  $46,000,  or 21.3%,  over the fiscal  1999  amount.  Other  income
included service fees from deposit accounts, various loan fees, safe deposit box
rentals,  and various other items. As the Bank continues to add accounts and fee
income  services,  other  income  is  expected  to  increase  and  become a more
significant part of the Bank's total income.

      Other expenses  totaled $3.4 million for the year ended December 31, 2000,
an increase of  $755,000,  or 28.4%,  over the 1999  amount.  This  increase was
primarily  attributable  to expense  associated  with opening of a new office in
June 2000. Additionally,  onetime expenses of $125,000 were recognized in fourth
quarter for costs incurred on a projected  secondary  offering that did not take
place and a payout of a personnel contract.

      The Bank  recorded no income tax expense for the year ended  December  31,
2000,  due to the reversal of a valuation  allowance on deferred taxes to offset
the current liability.

Effects of Inflation and Changing Prices

      A commercial bank has an asset and liability  structure that is distinctly
different  from  that of a company  with  substantial  investments  in plant and
inventory because the major portion of a bank's assets is monetary in nature. As
a result,  a bank's  performance may be  significantly  influenced by changes in
interest  rates.  Although the banking  industry is more  affected by changes in
interest rates than by inflation in the prices of goods and services,  inflation
is a factor that may influence  interest rates. Yet, the frequency and magnitude
of interest rate  fluctuations do not  necessarily  coincide with changes in the
general  inflation  rate.  Inflation  does  affect  operating  expenses  in that
personnel  expenses  and the  cost of  supplies  and  outside  services  tend to
increase during periods of high inflation.

New Accounting Pronouncements
See Note 15 in the Notes to Financial Statements

                                        6
<PAGE>

<TABLE>
<CAPTION>



                                                                         Balance Sheets
                                                                   December 31, 2001 and 2000
                                                             (Dollars in Thousands, Except Par Value)

ASSETS                                                               2001               2002

<S>                                                               <C>                 <C>
Cash and due from banks                                           $  4,250            $  4,180
Federal funds sold                                                   2,415                 990
Securities available for sale                                       30,614              26,062
Federal Home Loan Bank stock                                           785                 251

Loans                                                               93,869              78,009
Less allowance for loan losses                                       1,263               1,052
                                                                  --------            --------
  Net loans                                                         92,606              76,957

Premises and equipment, net                                          1,218               1,155
Other assets                                                         4,156               1.727
                                                                  --------            --------
  Total assets                                                    $136,044            $111,322
                                                                  ========            ========



LIABILITIES AND STOCKHOLDERS'EQUITY

Deposits:
 Noninterest-bearing                                             $  34,415           $  23,311
 Money market and NOW accounts                                      16,887              21,116
 Savings                                                             2,842               3,794
 Time, $100 and over                                                26,614              16,159
Other time                                                          29,970              35,791
                                                                 ---------           ---------
Total deposits                                                     110,728             100,171
                                                                 ---------           ---------
Other borrowings                                                    15,000               2,000
Other liabilities                                                      761                 433
                                                                 ---------           ---------
Total liabilities                                                  126,489             102,604
                                                                 ---------           ---------

Stockholders' equity:
Common stock, no par value, 20,000,000 shares authorized,
1,014,684 shares issued and outstanding                              8,949               8,075
Preferred stock, no par value, 5,000,000 shares authorized,
no shares issued or outstanding                                         --                  --
Retained earnings                                                      572                 741
Accumulated other comprehensive income (loss)                           34                 (98)
                                                                 ---------           ---------
Total stockholders' equity                                           9,555               8,718
                                                                 ---------           ---------
Total liabilities and stockholders' equity                       $ 136,044           $ 111,322
                                                                 =========           =========



</TABLE>



                                        7
<PAGE>

<TABLE>
<CAPTION>

               Statements of Operations and Comprehensive Income
              for the years ended December 31, 2001, 2000 and 1999
                  (Dollars in Thousands, Except Per Share Data)

                                                         2 0 0 1         2 0 0 0         1 9 9 9
<S>                                                  <C>             <C>             <C>
Interest income:
Loans                                                $     6,715     $     6,509     $     5,047
Securities available for sale
Taxable                                                    1,487           1,216           1,060
Tax-exempt                                                    33              --              --
Federal funds sold                                            44             301             197
                                                       ---------       ---------       ---------
Total interest income                                      8,279           8,026           6,304
                                                       ---------       ---------       ---------

Interest expense:
Deposits                                                   3,587           3,965           2,938
Other borrowings                                             589              85              13
                                                       ---------       ---------       ---------
Total interest expense                                     4,176           4,050           2,951
                                                       ---------       ---------       ---------

Net interest income                                        4,103           3,976           3,353
Provision for loan losses                                    211             181             187
                                                       ---------       ---------       ---------
Net interest income after provision for loan losses        3,892           3,795           3,166
                                                       ---------       ---------       ---------

Other income:
Service fees                                                 194              78              70
Gain on sale of securities                                   123              --              --
Other                                                        284             184             146
                                                       ---------       ---------       ---------
Total other income                                           601             262             216
                                                       ---------       ---------       ---------

Other expense:
Personnel                                                  1,723           1,868           1,431
Occupancy                                                    582             516             414
Data processing                                              188             181             117
Professional fees                                            223             102             153
Telephone, postage, and supplies                             129             116              87
Advertising and business promotion                           171             178             150
Other                                                        443             456             310
                                                       ---------       ---------       ---------
Total other expense                                        3,459           3,417           2,662
                                                       ---------       ---------       ---------

Income before income taxes                                 1,034             640             720
Income taxes                                                 327              --              --
                                                       ---------       ---------       ---------
Net income                                                   707             640             720

Other comprehensive income (loss)                            132             431            (554)
                                                       ---------       ---------       ---------

Comprehensive income                                 $       839     $     1,071     $       166
                                                       =========       =========       =========

Net income per share:
Basic                                                $      0.70     $      0.63     $      0.71
                                                       =========       =========       =========
Diluted                                              $      0.69     $      0.63     $      0.70
                                                       =========       =========       =========

Weighted average shares outstanding:
Basic                                                  1,014,684       1,014,684       1,014,927
                                                       =========       =========       =========
Diluted                                                1,018,271       1,014,684       1,021,854
                                                       =========       =========       =========
</TABLE>

                                        8

<page>

                 Statements of Changes in Stockholders Equity
              for the years ended December 31, 2001, 2000 and 1999
                             (Dollars in Thousands)

<TABLE>
<CAPTION>
                                                                             Addtional         Retained    Accumulated Other
                                              Common Stock                    Paid-in          Earnings    Comprehensive
                                              Shares            Amount        Capital          (Deficit)    Income (Loss)

<S>                                            <C>          <C>             <C>             <C>             <C>
Balance, January 1, 1999, as historically
presented                                      922,632      $    4,613      $    3,462      $     (619)     $       25

Formation of bank holding company
and conversion to no par common stock               --           3,462          (3,462)             --              --
                                             ---------      ----------      --------        ----------      ----------

Balance, January 1, 1999, as restated          922,632           8,075              --            (619)             25

Stock options exercised                             57              --              --              --              --

Other comprehensive loss
net of tax                                          --              --              --              --            (554)

Net income                                          --              --              --             720              --
                                             ---------      ----------      --------        ----------      ----------

Balance, December 31, 1999, as restated        922,689           8,075              --             101            (529)

Other comprehensive income
net of tax                                          --              --              --              --             431

Net income                                          --              --              --             640              --
                                             ---------      ----------      --------        ----------      ----------

Balance, December 31, 2000, as restated        922,689           8,075              --             741             (98)

Common stock dividend, no par of 10%            92,268             876              --            (876)

Purchase and retirement of common stock           (273)             (2)             --              --              --

Other comprehensive income
net of tax                                          --              --              --              --             132

Net income                                          --              --              --             707              --
                                             ---------      ----------      --------        ----------      ----------

Balance, December 31, 2001                   1,014,684      $    8,949      $       --      $      572      $       34
                                             =========      ==========      ========        ==========      ==========

</TABLE>


                                       9
<PAGE>

                            Statements of Cash Flows
              for the years ended Decmeber 31, 2001, 2000 and 1999
                             (Dollars in Thousands)
<TABLE>
<CAPTION>

                                                                     2 0 0 1     2 0 0 0       1 9 9 9
<S>                                                               <C>           <C>           <C>
Cash flows from operating activities:
Net income                                                        $    707      $    640      $    720
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization                                          231           226           171
Provision for loan losses                                              211           181           187
Decrease (increase) in deferred income taxes                            39          (209)         (155)
Net amortization (accretion) on securities available for sale           (6)           (9)           10
Gain on sale of securities available for sale                         (123)           --            --
Loss on sale of other real estate owned                                 37            --            --
Increase in other assets                                              (586)         (104)         (116)
Increase in other liabilities                                          328           105            35
                                                                   -------       -------       -------
Net cash provided by operating activities                              838           830           852
                                                                   -------       -------       -------

Cash flows from investing activities:
Purchases of securities available for sale                         (39,441)       (6,756)       (7,983)
Proceeds from maturities and issuer calls of securities
available for sale                                                  19,875            --         4,900
Proceeds from sale of securities available for sale                 15,361            --            --
Proceeds from sale of other real estate owned                          495            --            --
Purchase of Federal Home Loan Bank Stock                              (534)           --           (43)
Net increase in loans                                              (15,860)      (12,232)      (14,727)
Purchase of life insurance policies                                 (2,500)           --            --
Purchase of premises and equipment                                    (294)         (202)         (745)
                                                                   -------       -------       -------
Net cash used in investing activities                              (22,898)      (19,190)      (18,598)
                                                                   -------       -------       -------

Cash flows from financing activities:
Net increase in deposits                                            10,557        14,252        11,217
Advances on other borrowings                                        27,570         2,000            --
Repayments on other borrowings                                     (14,570)           --            --
Purchase of fractional shares                                           (2)           --            --
                                                                   -------       -------       -------
Net cash provided by financing activities                           23,555        16,252        11,217
                                                                   -------       -------       -------

Net increase (decrease) in cash and cash equivalents                 1,495        (2,108)       (6,529)
Cash and cash equivalents, beginning of year                         5,170         7,278        13,807
                                                                   -------       -------       -------
Cash and cash equivalents, end of year                            $  6,665      $  5,170      $  7,278
                                                                   =======       =======       =======

Supplemental cash flow information:
Interest paid                                                     $  4,199      $  3,999      $  2,917
                                                                   =======       =======       =======

Taxes paid                                                        $    272      $    184      $    127
                                                                   =======       =======       =======

Supplemental disclosure of noncash investing activities:
Transfer from loans to other real estate owned                    $     --      $    532      $     --
Net change in unrealized gain (loss) on
                                                                   =======       =======       =======
securities available for sale, net of tax                         $    132      $    431      $   (554)
                                                                   =======       =======       =======
</TABLE>

                                       10
<PAGE>


Notes to Financial Statements

1.       Organization and Summary of Significant Accounting Policies:

ORGANIZATION - First Commerce  Corporation was organized and incorporated  under
the laws of the State of North Carolina on February 26, 2001 and became the bank
holding  company for First  Commerce  Bank on May 24,  2001.  As a result of the
reorganization,  each share of the Bank common stock was automatically converted
into one share of the  Corporation  stock.  The  transaction  was  recorded,  as
defined by FASB  Statement  No.  141,Business  Combinations,  as an  exchange of
interest  between  entities under common  control.  The Bank presently  operates
three full service branches in Mecklenburg County in North Carolina.  The Bank's
primary source of revenue is derived from securities and loans.

BASIS OF PRESENTATION AND CONSOLIDATION - The consolidated  financial statements
include the accounts of First Commerce  Corporation (the  "Corporation") and its
wholly-owned  subsidiary,  First  Commerce  Bank (the "Bank").  All  significant
inter-company balances and transactions have been eliminated in consolidation.

PERVASIVENESS  OF  ESTIMATES  -  The  preparation  of  financial  statements  in
conformity with accounting principles generally accepted in the United States of
America  requires  management to make estimates and assumptions  that affect the
reported  amounts of assets and liabilities and disclosure of contingent  assets
and liabilities at the date of the financial statements and the reported amounts
of revenues and expenses  during the  reporting  period.  The allowance for loan
losses is such an estimate. Actual results could differ from those estimates.

SECURITIES  - The Bank  classifies  securities  as either  held to  maturity  or
available for sale on the date of purchase.  In determining such classification,
debt  securities  that the Bank has the  positive  intent and ability to hold to
maturity are  classified as held to maturity and are carried at amortized  cost.
The Bank had no  investments  classified  as held to  maturity  during the years
ended  December  31, 2001,  2000 and 1999.  All  securities  are  classified  as
available  for sale and are  carried  at fair value  with  unrealized  gains and
losses  included  in  other  comprehensive  income.  The  Bank  intends  to hold
securities available for sale for an indefinite period of time but may sell them
prior to maturity.

Gains and losses on sales of  securities  are  determined  based on the specific
identification  method and are included in other income.  Premiums and discounts
are amortized into interest  income using a level yield method.  Declines in the
fair value of  individual  securities  classified  as either held to maturity or
available for sale below their  amortized  cost that are  determined to be other
than temporary result in write-downs of the individual  securities to their fair
value with the resulting  write-downs  included in current  earnings as realized
losses.

LOANS  -  Loans  are  reported  at the  outstanding  principal  balances  net of
unamortized deferred loan fees and costs on originated loans.  Interest on loans
is  recognized  over  the  terms of the  loans  based  on the  principal  amount
outstanding.  Loan  origination  fees and certain direct  origination  costs are
deferred and  recognized as  adjustments to income over the lives of the related
loans using the interest method.

NONACCRUAL  LOANS - Loans that are past due 90 days or more as to  principal  or
interest,  or  where  reasonable  doubt  exists  as to  timely  collection,  are
generally classified as nonaccrual loans unless they are well collateralized and
in process of collection.  The Bank had no loans classified as nonaccrual during
the years ended  December 31, 2001,  2000 and 1999. In addition,  at and for the
years ended  December 31,  2001,  2000 and 1999,  the Bank had no troubled  debt
restructurings.

ALLOWANCE FOR LOAN LOSSES - The allowance for loan losses is established through
the provision for loan losses charged  against income and is available to absorb
losses  inherent  in  the  credit   extension   process.   Loans  deemed  to  be
uncollectible  are charged  against the allowance for loan losses and subsequent
recoveries, if any, are credited to the allowance.

The  adequacy  of the  allowance  for  loan  losses  is  reviewed  regularly  by
management  in order to maintain the  allowance at a level that is sufficient to
absorb  probable credit losses.  Management's  evaluation of the adequacy of the
allowance  is based on  known  and  inherent  risks  in the  portfolio,  adverse
situations that may affect the borrowers'  ability to repay, the estimated value
of any underlying collateral, composition of the overall loan portfolio, current
economic conditions and other relevant factors.

Loans are considered  impaired when it is probable that all amounts due will not
be  collected  in  accordance  with  the  contractual  terms  of the  loan.  The
measurement of impaired loans that are collateral dependent is based on the fair
value of the  collateral.  The  measurement of other impaired loans is generally
based on the present  value of  expected  future  cash flows  discounted  at the
historical effective interest



                                       11
<PAGE>



rate. If the recorded  investment in the loan exceeds the measure of fair value,
a valuation  allowance is  established  as a component of the allowance for loan
losses. The Bank had no impaired loans during the years ended December 31, 2001,
2000 and 1999.

The Bank uses several factors in determining if a loan is impaired. The internal
asset  classification  procedures include a thorough review of significant loans
and lending  relationships  and include the  accumulation  of related data. This
data includes loan payment  status,  borrowers'  financial  data and  borrowers'
operating factors such as cash flows, operating income, or loss, etc.

PREMISES  AND  EQUIPMENT  -  Premises  and  equipment  are  stated  at cost less
accumulated  depreciation  and  amortization.  Depreciation and amortization are
computed by the  straight-line  method  based on the  estimated  useful lives of
assets, or the life of the related lease, whichever is shorter.

Expenditures for repairs and maintenance are charged to expense as incurred. The
costs of major renewals and betterments  are  capitalized  and depreciated  over
their  estimated  useful  lives.  Upon   disposition,   the  asset  and  related
accumulated  depreciation are relieved and any resulting gain or loss is charged
to income.

FORECLOSED  PROPERTIES - Foreclosed  properties are included in other assets and
represent real estate acquired  through  foreclosure or deed in lieu thereof and
are carried at the lower of cost or fair value,  less  estimated  costs to sell.
Generally  the fair values of such  properties  are  evaluated  annually and the
carrying  value,  if greater than the estimated fair value less cost to sell, is
adjusted with a charge to income.

INCOME TAXES - Deferred tax assets and liabilities are recognized for the future
tax  consequences  attributable to differences  between the financial  statement
carrying  amounts of existing assets and  liabilities  and their  respective tax
basis.  Deferred tax assets are  reduced,  if  necessary,  by the amount of such
benefits  that are not  expected to be  realized  based on  available  evidence.
Deferred tax assets and  liabilities  are  measured  using the enacted tax rates
expected  to apply to  taxable  income  in the  years in which  those  temporary
differences are expected to be recovered or settled.

NET INCOME PER SHARE - Statement of Financial  Accounting  Standard ("SFAS") No.
128,  "Accounting for Earnings Per Share",  requires dual  presentation of basic
and diluted  earnings per share on the face of the  statements of operations and
requires a  reconciliation  of the numerators and  denominators of the basic and
diluted earnings per share calculations. Basic per-share amounts are computed by
dividing net income by the weighted-average number of common shares outstanding.
Diluted  per-share  amounts assume the  conversion,  exercise or issuance of all
potential  common stock  instruments  unless the effect is to reduce the loss or
increase the income per common share. The numerators of the basic net income per
share  computations are the same as the numerators of the diluted net income per
share  computations for all periods.  The denominator  (weighted  average shares
outstanding)  has been  increased by 3,587,  0 and 6,927  shares,  for the years
ended December 31, 2001, 2000 and 1999,  respectively,  to reflect the effect of
diluted  common  share  equivalents.  Share and  earnings  per  share  have been
restated to reflect 10% stock dividend in 2001.

CASH AND CASH EQUIVALENTS - For purposes of reporting cash flows,  cash and cash
equivalents  include cash and due from banks and federal funds sold.  Cash flows
from loans and deposits are reported net.

COMPREHENSIVE  INCOME -  Comprehensive  income includes net income and all other
charges  to  the  Bank's  equity,   with  the  exception  of  transactions  with
stockholders ("other comprehensive  income"). The Bank's only component of other
comprehensive  income  relates  to  unrealized  gains and  losses on  securities
available for sale.

                                    Years Ended December 31,
                                    2001     2000      1999
                                    (Dollars in Thousands)
Unrealized gains (losses)
on securities available for
sale arising during the
period, before tax expense        $ 341     $ 368      $(554)

Less: tax expense (benefit)         133                (63) -
                                  -----     -----      -----

                                    208       431       (554)
                                  -----     -----      -----
Less: reclassification
adjustment for realized gains
included in net income              123        --         --

Less: tax expense on
realized gains                       47        --         --
                                  -----     -----      -----
                                     76        --         --
                                  -----     -----      -----
Other comprehensive
income (loss)                     $ 132     $ 431      $(554)
                                  =====     =====      =====


                                                          12
<PAGE>

2. Securities:

The amortized cost and estimated market values of securities available for sale
are as follows:

<TABLE>
<CAPTION>

                                                            Gross        Gross       Estimated
                                            Amortized     Unrealized   Unrealized       Market
                                              Cost          Gains        Losses         Value
                                                           (Dollars in Thousands)
<S>                                         <C>          <C>           <C>           <C>
December 31, 2001
U.S. Government agencies                    $ 17,486     $    234      $   (111)     $ 17,609
State, County and Municipal Obligations        2,160            8           (59)        2,109
Mortgage Backed Securities                     8,911           48           (63)        8,896
Trust Preferred Securities                     2,000           --            --         2,000
                                            --------     --------      --------      --------
                                            $ 30,557     $    290      $   (233)     $ 30,614
                                            ========     ========      ========      ========
December 31, 2000
U.S. Government agencies                    $ 25,717     $      9      $   (170)     $ 25,556
State, County and Municipal Obligations          506           --            --           506
                                            --------     --------      --------      --------
                                            $ 26,223     $      9      $   (170)     $ 26,062
                                            ========     ========      ========      ========

</TABLE>

At December 31, 2001,  securities  with an aggregate  market value of $8,056,000
were pledged to secure borrowed funds.

The amortized cost and estimated market values of securities  available for sale
at December 31,  2001,  by  contractual  maturities  are shown  below.  Expected
maturities will differ from contractual  maturities because issuers may have the
right  to  call  or  prepay  obligations  with or  without  call  or  prepayment
penalties.   Mortgage-backed   securities  are  not  included  in  the  maturity
categories because they do not have a single maturity date.

                                                      Estimated
                                           Amortized     Market
                                             Cost         Value
                                          (Dollars in Thousands)

Due after one year through five years      $ 4,832     $ 4,962
Due after five years through ten years      13,820      13,782
Due after ten years                          2,994       2,974
Mortgage-backed securities                   8,911       8,896
                                           -------     -------
                                           $30,557     $30,614
                                           =======     =======


Proceeds from the sale of securities available for sale were $15,361,023 in 2001
and there were no  securities  sold during the years ended 2000 and 1999.  Gross
gains of $127,985 and gross losses of $5,257 were realized in 2001.

3. Loans and Allowance for Loan Losses:
Loans are summarized as follows:

                                   December 31,
                               2001          2000
                             (Dollars in Thousands)

Commercial:                   $30,666     $28,142
Real Estate
Residential, 1-4 families      14,447      11,762
Residential, multi-family       1,597       1,469
Other                          41,581      33,309
Installment                     5,578       3,327
                              -------     -------
                              $93,869     $78,009
                              =======     =======


                                       13
<PAGE>



Changes in the allowance for loan losses for the years ended  December 31, 2001,
2000, and 1999, are summarized as follows:


                                                2001         2000         1999
                                                    (Dollars in Thousands)

Balance at beginning of period             $   1,052      $   945      $   758
Provision for loan losses                        211          181          187
Charge-offs                                       --          (74)          --
Recoveries                                        --           --           --
                                           ---------      -------      -------
Balance at end of period                   $   1,263      $ 1,052      $   945
                                           =========      =======      =======


The Bank has granted loans to certain  directors  and executive  officers of the
Bank and to their  related  interests.  A summary of activity  of related  party
loans for the year ended December 31, 2001, is as follows:
<TABLE>
<CAPTION>

                                                                                           2001          2000
                                                                                         (Dollars in Thousands)

<S>                                                                                   <C>           <C>
Balance at beginning of year                                                          $  3,746      $  2,134
New loans                                                                                1,104         3,167
Principal repayments and renewals                                                       (1,214)       (1,555)
Balance at end of year                                                                $  3,636      $  3,746

4. Premises and Equipment:

Premises and equipment are summarized as follows:
<CAPTION>
                                                                                              December 31,
                                                                                          2001          2000
                                                                                        (Dollars in Thousands)

<S>                                                                                   <C>           <C>
Land                                                                                  $    428      $    428
Leasehold improvements                                                                     383           316
Equipment and fixtures                                                                   1,314         1,088
                                                                                         2,125         1,832
Less accumulated depreciation and amortization                                             907           677
                                                                                      $  1,218      $  1,155
5. Deposits:

The scheduled maturities of time deposits at December 31, 2001, are as follows:
<CAPTION>
                                                                                       Year ending    Amount
                                                                                          (Dollars in Thousands)

<S>                                                                                   <C>           <C>
                                                                                          2002      $ 51,678
                                                                                          2003         4,691
                                                                                          2004            85
                                                                                          2005           105
                                                                                          2006            25
                                                                                                    $ 56,584

</TABLE>

The Bank has brokered  certificates  of deposit of  approximately  $5,000,000 at
December 31, 2001.


                                       14
<PAGE>

6. Leases:

The Bank has three  noncancelable  operating  leases for branch  locations  with
expirations  in 2002,  2005 and 2007.  Future minimum lease payments under these
leases for years subsequent to December 31, 2001 are as follows:

                        Year ending            Amount
                             (Dollars in Thousands)
                        2002                   $260
                        2003                    253
                        2004                    262
                        2005                    271
                        2006                    107
                        Thereafter              92
                                               $1,245


Total rental expense  related to these operating  leases was $267,000,  $225,000
and $197,000 for the years ended December 31, 2001, 2000 and 1999, respectively.

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.  Those
financial  instruments  include lines of credit and loan commitments and involve
elements  of credit  risk in excess of amounts  recognized  in the  accompanying
financial statements.

      The Bank's risk of loss with the lines of credit and loan  commitments  is
represented by the contractual  amount of these  instruments.  The Bank uses the
same credit policies in making commitments under such instruments as it does for
on-balance  sheet  instruments.  The amount of collateral  obtained,  if any, is
based on management's credit evaluation of the borrower. Collateral held varies,
but may include accounts receivable, securities, inventory, real estate and time
deposits with financial institutions.

      Financial  instruments whose contract amounts  represent  potential credit
risk  included  unfunded  lines of credit  and loan  commitments,  primarily  at
variable  rates,  totaling  $16,044,000 and  $15,529,000,  and standby Letter of
Credit  aggregating  $71,000  and  $250,000  at  December  31,  2001  and  2000,
respectively.  Management  expects that these  commitments can be funded through
normal operations.

      Two executive  officers  have  employment  agreements  that expire July 8,
2002.  These agreements were entered into on July 8, 1998 for a three-year term,
which is extended for one year on anniversary date, unless the Bank or executive
gives notice to the other of the  termination of such term extension  provision.
In March 2000,  the Bank gave  notice to each  executive  officer  that the term
would not be extended.

 8. Other borrowings:

The Bank has two  available  lines of credit  expiring  in 2002 with The Bankers
Bank,  Atlanta,  Georgia,  in the  aggregate  amount of  $5,500,000  that  bears
interest at the  prevailing  market rate.  There are no  borrowings  outstanding
under the lines of credit at December 31, 2001 and 2000.

      The Bank has a line of credit with the  Federal  Home Loan Bank of Atlanta
in the  amount up to  fifteen  percent of the  Bank's  total  assets.  Terms and
conditions  vary  depending  on the  program  selected  by the Bank  for  credit
advances,  subject to  collateralization of FHLB stock and qualifying 1-4 family
residential  mortgage  loans.  The  outstanding  amount consists of $2.0 million
maturing in 2005 and $8.0  million  maturing in 2011.  At December  31, 2001 and
2000, the interest rates on fixed rate long-term debt ranged from 3.33% to 7.07%
and 7.07%, respectively.

      In November 2001, the Corporation participated in a pooled trust preferred
securities  offering  in the amount of $5.0  million.  These  securities  bear a
variable  interest  rate based on the  six-month  LIBOR  plus 375 basis  points,
mature  in  2031  and  are  callable  at  par in  five  years.  The  Corporation
capitalized cost related to the debt and is amortizing the cost over five years.


                                       15
<PAGE>
<TABLE>
<CAPTION>

                                           Interest                                       Maximum
                            Balance as of  Rate as of        Average  Average         Outstanding at
                            December 31,   December 31,      Balance  Interest Rate   any Month-End
                                                 (Dollars in Thousands)
<S>                            <C>           <C>                 <C>     <C>               <C>
2001
Federal funds purchased      $    --        --               $ 1,667     5.94%           $ 1,150
Trust preferred security       5,000         6.01%               466     6.01%             5,000
FHLB Advances                 10,000         4.94%             8,787     5.26%            13,700
                             -------                         -------                     -------
Total                        $15,000                         $10,920                     $19,850
                             =======                         =======                     =======

                                                                                            2000
Federal funds purchased      $    --        --               $    11     6.99%           $    --
FHLB Advances                  2,000         7.07%             1,219     7.07%             2,000
                             -------                         -------                     -------
Total                        $ 2,000                         $ 1,230                     $ 2,000
                             =======                         =======                     =======

</TABLE>

9. Employee Benefit Plan:

Effective  March 30, 1997, the Bank adopted a Savings  Incentive  Match Plan for
Employees (the "SIMPLE") as described in Section 408(p) of the Internal  Revenue
Code of 1986, as amended. The SIMPLE is administered by an unaffiliated company.
All employees are eligible to participate in the SIMPLE. The Bank has elected to
contribute  a  matching  contribution  that is  equal  to 100% of the  voluntary
employee  contribution up to a maximum of 3% of individual  compensation for the
year.  Voluntary  employee  contributions and the Bank's matching  contributions
vest immediately.  The Bank's matching contributions  attributable to the SIMPLE
were approximately $39,000, $39,000 and $28,000 for the years ended December 31,
2001, 2000 and 1999, respectively.

      Effective January 1, 2002, the Bank adopted the First Commerce Bank 401(k)
Plan as described  under section 401 of the Internal  Revenue  Code.  The 401(k)
Plan is administered by an unaffiliated  company.  All employees are eligible to
participate  in the 401(k) Plan if they have  completed one month of service and
attained  the age of 21.  All  participants  eligible  for the  SIMPLE  are 100%
vested.  All new  employees  will vest at a rate of 25% per  year.  The Bank has
elected  to  contribute  a  matching  contribution  that is equal to 100% of the
voluntary employee contribution up to a maximum of 4% of individual compensation
for the year.

10. Compensation Plans:

On May 25, 2001, the First  Commerce Bank 1997  Incentive  Stock Option Plan was
continued as the First Commerce  Corporation  2001 Incentive  Stock Option Plan,
which  provides  for  the  issuance  of  options  to  purchase   shares  of  the
Corporation's   common  stock  to  officers  and  full-time   employees  of  the
Corporation  or the Bank. The options have an original term of ten years with an
exercise  price  equal to the market  price of the  common  stock on the date of
grant. The options vest 20% per year after their date of grant.

A summary of the plan for the years ended  December 31, 2001,  2000, and 1999 is
as follows.  Share and price  information has been restated to reflect 10% stock
dividend in 2001.

<TABLE>
<CAPTION>

                                                   2001                  2000               1999
                                                        Exercise              Exercise           Exercise
                                           Shares       Price       Shares    Price      Shares  Price

<S>                                          <C>       <C>          <C>       <C>        <C>     <C>
Outstanding at beginning of year             73,987    $ 10.26      51,204    $ 11.04    33,123  $10.10
Granted                                      31,550       7.45      24,200       8.57    22,000   12.39
Exercised                                        --      --             --      --          (63)   9.05
Forfeited                                    (4,510)     10.10      (1,417)      9.45    (3,856)  10.63
                                            -------                 ------               ------
Outstanding at end of year                  101,027       9.36      73,987      10.26    51,204   11.04
                                            =======                 ======               ======

Exercisable at end of year                   41,413                 33,886               19,215

Weighted-average fair value per option
of options granted during the year          $  4.88                $  3.99              $  7.51

Weighed-average life of options
Outstanding (in months)                          94                     98                  103

</TABLE>

                                       16
<PAGE>

On May 25, 2001, the First Commerce Bank 1997 Nonqualified Stock Option Plan for
Directors  was continued as the First  Commerce  Corporation  2001  Nonqualified
Stock Option Plan for  Directors,  which provides for the issuance of options to
purchase shares of the Corporation's  common stock to non-employee  directors of
the Bank.  The options have an original term of ten years with an exercise price
equal to the market price of the common stock on the date of grant.  The options
are fully vested on the date of grant. A summary of the plan for the years ended
December 31, 2001, 2000, and 1999 is as follows. Share and price information has
been restated to reflect 10% stock dividend in 2001.

<TABLE>
<CAPTION>

                                                   2001                  2000               1999
                                                      Exercise              Exercise             Exercise
                                             Shares   Price       Shares    Price      Shares    Price


<S>                                         <C>      <C>          <C>      <C>         <C>      <C>
Outstanding at beginning of year            75,981   $ 10.23      59,591   $ 10.68     43,751   $10.06
Granted                                     24,966      7.45      16,390      8.57     15,840    12.39
Exercised                                       --        --          --     --            --    --
Forfeited                                       --        --          --     --            --    --
                                           -------                ------               ------
Outstanding at end of year                 100,947      9.54      75,981     10.23     59,591    10.68
                                           =======                ======               ======

Exercisable at end of year                 100,947                75,981               59,591

Weighted-average fair value per option
of options granted during the year       $    4.88                $ 3.99      $          7.51

Weighed-average life of options
Outstanding (in months)                         89                    94                  100
</TABLE>



Effective  May 24, 2001,  the  Corporation  adopted SFAS No. 123,  "Accounting f
Stock Based  Compensation".  As permitted by SFAS No. 123, the  Corporation  has
chosen to apply APB Opinion No. 25,  "Accounting  for Stock Issued to Employees"
and  related  interpretations  in  accounting  for its  plans.  Accordingly,  no
compensation cost has been recognized for options granted under the option plans
discussed above.  Had  compensation  cost for the plans been determined based on
the fair value at the grant dates for awards under the plans consistent with the
method of SFAS No.  123,  the Bank's  net income and net income per share  would
have been changed to the pro forma amounts indicated below.


                               2001            2000             1999
                            (Dollars in Thousands, except Per Share Data)
Net income:
As reported                $   707           $  640          $  720
Pro forma                      619              555             618
Basic income per share:
As reported                $   0.70          $  0.63         $  0.71
Pro forma                      0.61             0.55            0.61
Diluted income per share:
As reported                $   0.69          $  0.63         $  0.70
Pro forma                      0.61             0.55            0.61


The fair value of each option  grant is estimated on the date of grant using the
Black-Scholes   option-pricing   model  with  the   following   weighted-average
assumptions  used for grants in 2001, 2000 and 1999,  respectively:  no dividend
yield;  expected  volatility of 52.77%,  25.50% and 43.17%;  risk-free  interest
rates of 4.86%, 5.88% and 6.10%; and expected lives of seven years.


                                       17
<PAGE>


11. Income Taxes:

The components of income tax expense for the year ended December 31, 2001,  2000
and 1999 are as follows:



                                               2001        2000        1999
                                                 (Dollars in Thousands)
Current:
Federal                                       $ 288       $ 209       $ 155
State                                            --          --          --
                                                288         209         155
Deferred:
Federal                                          39        (209)       (155)
State                                            --          --          --
                                                 39        (209)       (155)
Total                                         $ 327       $  --       $  --

The reason for the differences between statutory federal income tax rate and the
effective rates are summarized as follows:

                                               2001        2000        1999
Statutory federal income tax rates             34.0%       34.0%       34.0%
Increase (decrease) in taxes resulting from:
Permanent differences                           0.4         0.7         0.7
Municipal income                               (1.1)         --          --
Change in valuation                            (0.6)      (35.5)      (34.7)
Other                                          (1.1)        0.8          --
Effective tax rate                             31.6%       31.6%       31.6%

The components of deferred tax assets and liabilities are as follows:

                                               2001        2000        1999
                                                   (Dollars in Thousands)
Deferred tax assets:
Allowance for loan losses                     $ 457       $ 380       $ 329
Unrealized loss on securities
available for sale                               --          63          --
Amortization                                     --          29          79
Total deferred tax assets                       457         472         408
Valuation allowance                              --          (7)       (241)
Net deferred tax assets                         457         465         167
Deferred tax liabilities:
Depreciation                                     27          13           8
Deferred loan cost                               74          17          --
Other                                            31           8           4
Unrealized gain on securities AFS                23          --          --
Total deferred tax liabilities                  155          38          12


Net deferred tax assets                       $ 302       $ 427       $ 155

A  valuation  allowance  was  provided  in 2000 and 1999 for the  amount  of the
deferred  tax  assets  the  Bank did not  consider  more  likely  than not to be
realized.  The  decrease in the  valuation  allowance  was $7,000,  $234,000 and
$138,000 for the years ended December 31, 2001, 2000, and 1999, respectively. At
the end of 2001,  no valuation  allowance was necessary and the bank is expected
to realized the full value of all deferred tax assets.


                                       18
<PAGE>


12. Regulatory Restrictions:

The payment of dividends by the Corporation is dependent upon dividend  payments
by  the  Bank  to  the  Corporation.  The  Bank,  as a  North  Carolina  banking
corporation,  may pay  dividends  only out of  undivided  profits as  determined
pursuant to North Carolina General Statutes Section 53-87.  However,  regulatory
authorities  may limit  payment of dividends  by any bank when it is  determined
that such a  limitation  is in the public  interest  and is  necessary to ensure
financial soundness of the bank.

      The  Corporation  and the Bank are subject to various  regulatory  capital
requirements  administered  by the  federal  banking  agencies.  Failure to meet
minimum  capital  requirements  can  initiate  certain  mandatory - and possibly
additional discretionary - actions by regulators that, if undertaken, could have
a direct  material  effect  on the  Corporation's  financial  statements.  Under
capital adequacy  guidelines and the regulatory  framework for prompt corrective
action,  the  Corporation  must meet specific  capital  guidelines  that involve
quantitative  measures of the  Corporation's  assets,  liabilities,  and certain
off-balance-sheet items as calculated under regulatory accounting practices. The
Corporation's capital amounts and classification are also subject to qualitative
judgments  by the  regulators  about  components,  risk  weightings,  and  other
factors.  Prompt corrective action provisions are not applicable to bank holding
companies.

      Quantitative measures established by regulators to ensure capital adequacy
require the Corporation to maintain minimum amounts and ratios (set forth in the
following table) of total and Tier I capital ( as defined in the regulations) to
risk-weighted  assets  ("RWA")  (as  defined),  and of Tier I capital to average
assets ("AA") (as  defined).  Management  believes,  as of December 31, 2001 and
2000, that the Bank meets all capital requirements to which it is subject.

      As of  December  31,  2001,  the most  recent  notification  from the FDIC
categorized  the Bank as well  capitalized  under the  regulatory  framework for
prompt corrective  action. To be categorized as  well-capitalized  the Bank must
maintain minimum total risk-based, Tier I risk-based, and Tier I leverage ratios
as set forth in the  following  table.  There are no  conditions or events since
that  notification  that  management  believes  have changed the  category.  The
Corporation's  actual  capital  amounts  and ratios are  presented  in the table
below.

<TABLE>
<CAPTION>

                                                                       To Be Well
                                                                   Capitalized Under
                                              For Capital          Prompt Corrective
                                     Actual Adequacy Purposes       Action Provisions
                            Amount   Ratio   Amount    Ratio       Amount     Ratio
                                                                (Dollars in thousands)
<S>                         <C>       <C>     <C>       <C>      <C>         <C>
As of December 31, 2001
Total Capital to RWA
Consolidated                $13,958   13.10%  $8,526  > 8.00%        N/A         N/A
Bank                        $15,540   14.58%  $8,526  > 8.00%     $10,658     >10.00%
Tier I Capital to RWA
Consolidated                $12,695   11.91%  $4,263  > 4.00%        N/A         N/A
Bank                        $14,277   13.40%  $4,263  > 4.00%     $ 6,395     >6.00%
Tier I Capital to AA
Consolidated                $12,695    9.81%  $5,174  > 4.00%        N/A         N/A
Bank                        $14,277   11.04%  $5,174  > 4.00%     $ 6,468     >5.00%
As of December 31, 2000
Total Capital to RWA        $ 9,868   11.31%  $6,980  > 8.00%     $ 8,726     >10.00%
Tier I Capital to RWA       $ 8,816   10.10%  $3,490  > 4.00%     $ 5,235     > 6.00%
Tier I Capital to AA        $ 8,816    8.62%  $4,090  > 4.00%     $ 5,112     > 5.00%

</TABLE>

                                       19
<PAGE>


13. Fair Values of Financial Instruments:

The following disclosure of the estimated fair value of financial instruments is
made in accordance  with the  requirements of SFAS No. 107,  "Disclosures  About
Fair Value of Financial Instruments". The estimated fair value amounts have been
determined  by the Bank  using  available  market  information  and  appropriate
valuation methodologies. However, considerable judgment is required to interpret
market data to develop the estimates of fair value.  Accordingly,  the estimates
presented  herein are not  necessarily  indicative of the amounts the Bank could
realize in a current market exchange.  The use of different  market  assumptions
and/or estimation methodologies may have a material effect on the estimated fair
value amounts.

The following  methods and assumptions  were used by the Bank in estimating fair
values of financial instruments as disclosed herein:

Cash and due from banks

      The  carrying  amounts of cash and due from banks  approximate  their fair
      value.

Federal funds sold

      The carrying amounts of federal funds sold approximate their fair value.

Securities available for sale

      Fair value for  securities  available  for sale are based on quoted market
      prices.

Loans

      Fair value for loans is  estimated  by  discounting  the future cash flows
      using the current  rates at which similar loans would be made to borrowers
      with similar credit ratings and for the same remaining maturities.

Accrued interest receivable

      The  carrying  amounts of accrued  interest  receivable  approximate  fair
      value.

Deposits

      The fair value of noninterest bearing,  money market and NOW accounts, and
      savings  deposits is the amount  payable on demand at the reporting  date.
      The fair value of time  deposits is  estimated  using the rates  currently
      offered for deposits of similar remaining maturities.

Other borrowings

      The fair value for  borrowings  with  maturities  greater than one year is
      estimated  based upon  discounted  future cash flows using a discount rate
      comparable to the current market rate for such borrowings.

Accrued interest payable

      The carrying amounts of accrued interest payable approximate fair value.

The estimated fair values of the Bank's financial instruments were as follows at
December 31:

                                             2001                     2000
                                    Carrying  Estimated    Carrying   Estimated
                                    Amount    Fair Value   Amount     Fair Value
                                               (Dollars in Thousands)
Financial assets:
Cash and due from banks           $  4,250  $  4,250     $  4,180     $  4,180
Federal funds sold                   2,415     2,415          990          990
Securities available for sale       30,614    30,614       26,062       26,062
Loans                               92,606    92,683       76,957       76,161
Accrued interest receivable            622       622          663          663

Financial liabilities:
Deposits                          $110,728  $111,781     $100,171     $100,492
Other borrowings                    15,000    14,618        2,000        2,000
Accrued interest payable               173       173          195          195


                                       20
<PAGE>


The Bank had off-balance sheet financial commitments to fund lines of credit and
loan commitments  (see Note 7) totaling  $16,044,000 and $15,529,000 at December
31,  2001 and 2000,  respectively.  Since the loan  commitments  are at interest
rates  that  approximate  current  market  rates,  the  estimated  value  of the
commitments have no other financial statement impact.

      The  fair  value  estimates   presented  herein  are  based  on  pertinent
information available to management at December 31, 2001 and 2000, respectively.
Although management is not aware of any factors that would significantly  affect
the  estimated  fair value  amounts,  such amounts  have not been  significantly
revalued  for  purposes  of these  financial  statements  since  that  date and,
therefore,  current  estimates of fair value may differ  significantly  from the
amounts presented herein.

14. First Commerce Corporation (Parent Company):

On May 24, 2001 First Commerce Corporation quoted on the NASDAQ Over the Counter
Bulletin  Board  under the symbol  "FCMM",  became  the Parent of the Bank.  The
principal  assets of the Parent  Company are its investment in the Bank, and its
principal  source of income is dividends from the Bank.  Certain  regulatory and
other  requirements  restrict  the  lending  of funds by the Bank to the  Parent
Company and the amount of dividends that can be paid to the Parent  Company.  In
addition,  certain regulatory  agencies may prohibit the payment of dividends by
the Bank if they  determine  that such  payment  would  constitute  an unsafe or
unsound  practice.  At December 31, 2001,  the Parent  Company's  $14.3  million
investment  in  subsidiaries  total amount is  restricted  as to transfer to the
Parent Company without obtaining prior regulatory approval.

      The Parent  Company's  balance  sheets  data as of  December  31, 2001 and
related  statements  of income and cash flow data for the period ended  December
31, 2001 are as follows:




                                                       2001
                                              (Dollars in Thousands)
Balance Sheet Data:
Cash                                               $    77
Investment in subsidiaries                          14,312
Receivable from subsidiaries                            --
Other assets                                           195
                                                   $14,584
Borrowed funds                                       5,000
Payable to subsidiaries                                 29
Shareholders' equity                                 9,555
                                                   $14,584
Income Statement Data:
Income from subsidiaries                               760
Other operating expense                                (81)
Income tax benefit                                      28
Net Income                                         $   707

Cash Flow Statement Data:
Cash Flows from Operating Activities:
Net income                                         $   707
Increase in payable from subsidiaries                   29
Increase in other assets                              (195)
Equity in earnings of subsidiaries                    (760)
Net cash used in operating activities                 (219)

Cash Flows from Investing Activities:
Investment in subsidiary                            (4,704)
Net cash used by investing activities               (4,704)

Cash Flows from Financing Activities:
Proceeds from issuance of subordinated debt          5,000
Net cash provided by financing activities            5,000
Net increase in cash                                    77
Cash at beginning of year                               --
Cash at end of year                                $    77


                                       21
<PAGE>


15. New Accounting Pronouncements:

In July,  2001, the Financial  Standards Board issued two statements-  Statement
141,Business  Combinations,and  Statement  142,  Goodwill  and Other  Intangible
Assets,  which will  potentially  impact the Bank's  accounting for its reported
goodwill and other intangible assets.

Statement 141:

o     Eliminates the pooling method for accounting for business combinations.

o     Requires  that  intangible  assets that meet certain  criteria be reported
      separately from goodwill.

o     Requires  negative  goodwill  arising  from a business  combination  to be
      recorded as an extraordinary gain.

Statement 142:

o     Eliminates the  amortization  of goodwill and other  intangibles  that are
      determined to have an indefinite life.

o     Requires,  at a minimum,  annual  impairment  tests for goodwill and other
      intangible assets that are determined to have an indefinite life.

Upon adoption of these Statements, the Bank is required to:

o     Re-evaluate  goodwill and other intangible assets that arose from business
      combinations  entered  into before  July 1, 2001.  If the  recorded  other
      intangibles  assets do not meet the criteria for recognition,  they should
      be  reclassified  to goodwill.  Similarly,  if there are other  intangible
      assets that meet the  criteria  for  recognition  but were not  separately
      recorded from goodwill, they should be reclassified from goodwill.

o     Reassess the useful lives of  intangible  assets and adjust the  remaining
      amortization  periods  accordingly.  o Write-off  any  remaining  negative
      goodwill.

These statements are not expected to have a significant  impact on the Bank. The
standards will be required to be implemented by the Bank by January 1, 2002.

16. Selected Quarterly Financial Data (unaudited):

The  following  tables  present  summarized  quarterly  data for the years ended
December 31, 2001 and 2000: (Dollars in Thousands)


                                    Year Ended December 31, 2001
                                           Three Months Ended
                              March 31   June 30  September 30 December 31
Net interest income              $927     $937       $  983     $1,045
Other income                      106     141           146        208
Other expense                     895     929           942      1,020
Net income                       $138     $149       $  187     $  233
                                  ---     ----       ------     ------
                                  ===     ====       ======     ======

Earnings per share(1)            $ 0.15   $0.15      $ 0.17     $ 0.23
                                  =====   =====      ======     ======

                                       Year Ended December 31, 2001
                                           Three Months Ended
                              March 31   June 30  September 30 December 31
Net interest income              $865     $957         $977       $996
Other income                       61       64           73         64
Other expense                     751      858          875        933
                                  ---      ---          ---        ---
Net income                       $175     $163         $175       $127
                                  =====   =====        =====      =====

Earnings per share(1)            $ 0.17   $0.17        $0.16      $0.13
                                  =====   =====        =====      =====


(1)  Earnings  per share  data  above has been  restated  to reflect a 10% stock
dividend in 2001.


                                       22
<PAGE>


                        Report of Independent Accountants


To the Board of Directors First Commerce Corporation
Charlotte, North Carolina

      We have  audited the  accompanying  consolidated  balance  sheets of First
Commerce  Corporation  and  subsidiary as of December 31, 2001 and 2000, and the
related consolidated  statements of operations and comprehensive income, changes
in stockholders' equity and cash flows for the years then ended. 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. The consolidated  financial statements of First Commerce Corporation
for the year  ended  December  31,  1999 were  audited by other  auditors  whose
report,  dated  January 14,  2000,  expressed  an  unqualified  opinion on those
financial statements.

      We conducted our audits in accordance  with auditing  standards  generally
accepted in the United States of America.  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,  the consolidated  financial  statements referred to above
present  fairly,  in all  material  respects,  the  financial  position of First
Commerce  Corporation  and  subsidiary as of December 31, 2001 and 2000, and the
results  of their  operations  and their  cash flows for the years then ended in
conformity with accounting principles generally accepted in the United States of
America.



Mc GLADEY & PULLEN, LLP
Charlotte, North Carolina January 11, 2002


                                       23
<PAGE>

Robert D. Culbertson
President
The Morehead Group
(insurance
consulting firm)

G. Dixon Handshaw
President
Handshaw &
Associates
(computer based
training)

Harriet A. Kaplan
Publisher and President
The Leader
(weekly newspaper)

Earl D. Leake
Vice President
Lance, Inc.
(baked goods manufacturer)
William G. Loeffler
Chairman (Retired)
Loeffler Ketchum
Mountjoy
(advertising & public
firm)

Penny J. Parks
President
Parks & Co.
(computer consulting
firm)

James Y. Preston *
Partner
Parker, Poe, Adams, &
Bernstein, LLP
(attorneys)

* Chairman
David M. Sidbury
President
David M. Sidbury, Inc.
(commercial
construction com-
pany)

Richard C. Siskey
Managing Partner
Wall Street Capitol
(insurance and
financial plan-
ning firm)

James E. Smith
Owner
Northcross Lanes at the
Lake
(recreational complex)
William G. Staton
Chairman
Staton Financial
Advisors, LLC
(investment advisory
company)

Wesley W. Sturges
President & CEO
First Commerce Bank

Howard E. Virkler
President (Retired)
The Virkler Company
(specialty chemical
manu-
facturer)


S T A F F
---------


Cathy J. Bartow
Customer Service
Representative - Main

Gina E. Belcher
Loan Officer Assistant

Jennifer Epps
Accountant

Kelly L. Greer
Teller - Main

Stuart L. Hester
Vice President
Commercial Loan
Officer

Ann S. Holt
Assistant Vice
President
Controller

Elizabeth K. Jameson
Loan Officer Assistant
Assistant Secretary
Supervisor

Edward Jarvis
Vice President
Information Technology
Dianne R. Johnston
Customer Service
Representative -
Cornelius

Rachel T. Juszkiewicz
Loan Officer Assistant

David E. Keul
Senior Vice President
Chief Financial Officer
and Secretary

Ann M. Lambrose
Teller - SouthPark

David L. Lawing
Vice President
Loan Administration

Luisa N. Loayza
Teller - SouthPark

Jennifer L. Love
Office Manager - Main

Angela R. Lovelace
Office Manager -
Cornelius
Edward R. Mennona
Assistant Vice
President
Commercial Loan
Officer

Ethel L. Milliken
Vice President
Assistant Secretary
Loan Operation
Manager

Falecia C. Morrow
Loan Administrator

Carol S. Norket
Teller - Cornelius

Brenda R. Peters
Assistant Vice
President Retail
Loan Officer

Michael F. Prickett
Vice President
Commercial Loan Officer

Pamela H. Rade
Operations Manager

Christopher L. Sharpe
Vice President
Commercial Loan Officer
Phyllis R. Smith
Loan Officer Assistant

Ranjana Sontakay
Office Manager - SouthPark

Suzette R. Southern
Executive Assistant

Wesley W. Sturges
President and
Chief Executive Officer

Aubrey Swanson
Teller - Main

Derek G. Thompson
Senior          Vice
President
Commercial   Banking
Manager

Ashley R. Whitener
Customer Service
Representative - SouthPark


                                       24


<PAGE>

                            Stockholders Information

<TABLE>
<CAPTION>
<S>                                  <C>                                   <C>
INDEPENDENT                                  COUNSEL                       TRANSFER AGENT
ACCOUNTANTS                          Brooks, Pierce, McLendon              Registrar and Transfer Company
McGladrey & Pullen, LLP              Humphrey & Leonard, L.L.P.            Cranford. New Jersey 07016
One Morrocroft Centre                230 North Elm  Street                  (800) 368-5948
6805 Morrison Boulevard Suite 200    2000 Renaissance Plaza
Charlotte, North Carolina 28211      Greensboro, North Carolina 27401
 Street
</TABLE>

--------------------------------------------------------------------------------

 Notice of Annual Meeting
The Annual Meeting of Shareholders of First Commerce Corporation will be held
on April 23, 2002, at 5:00 p.m., at Levine Museum of the South,
200 East 7th St., Charlotte, North Carolina 28202.

--------------------------------------------------------------------------------

             MARKET FOR THE COMMON STOCK, STOCK PRICES AND DIVIDENDS

The Corporations  common stock is quoted on the NASDAQ Over the Counter Bulletin
Board under the symbol  "FCMM".  As of December 31, 2001,  the  Corporation  had
issued and  outstanding  1,014,684  shares of common stock which was held by 646
stock- holders of record,  not including the number of persons or entities whose
stock is held in nominee  or street  name  through  various  brokerage  firms or
banks.  In May  2001,  a  holding  company  structure  was  formed  and  all the
authorized  and  outstanding  common  stock of First  Commerce  Bank  "FCBD" was
converted to common stock of the  Corporation.  Since its  organization  in June
1996, trading in the Bank's common stock, and subsequently in the Corporations
common stock, has been very thin.

To date, the Comoration has not paid any cash dividends.

                       QUARTERLY COMMON STOCK PERFORMANCE

 Quarter Ending                                  Stock Price
                                       High                   Low
 December 31, 2001                    $12.00                 $7.77
 September 30, 2001                     8.82                  7.77
 June 30, 2001                          9.09                  7.05
 March 31, 2001                         8.41                  5.46
 December 31, 2000
 September 30, 2000                    $8.98                 $5.45
 June 30, 2000                          8.64                  6.71
 March 31, 2001                         9.55                  7.73
                                        9.09                  7.50






The above  quotations  reflect  inter-dealer  quotes,  without  retail  mark-up,
mark-down or commission,  and may not represent actual  transactions.  The above
quotations were obtained from a stock  quotation  reporting  service.  All share
prices have been adjusted for the 10% stock dividend in November 2001.







<PAGE>








Main Office                      SouthPark Office      Cornelius Office
301 S. McDowell St., Ste. 100    4415 Sharon Road      8222 Village Harbor Drive
Charlotte, NC 28204              Charlotte, NC 2811    Cornelius, NC 28031
(704) 945-6565                   (704) 362-0664        (704) 987-9990