<PAGE>

                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549
                            ______________________

                                   FORM 10-K


                ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934


                 For the fiscal year ended  December 31, 2000
                                            -----------------

                      Commission file number   000-23465
                                               ---------

                         CODDLE CREEK FINANCIAL CORP.
            ------------------------------------------------------
            (Exact name of registrant as specified in its charter)
<TABLE>
 <S>                                                                     <C>
            North Carolina                                                           56-2045998
    -------------------------------                                      -----------------------------------
    (State or other jurisdiction of                                      (I.R.S. Employer Identification No.)
    incorporation or organization)

        347 North Main Street
     Mooresville, North Carolina                                                         28115
 ---------------------------------------                                               ----------
 (Address of principal executive office)                                               (Zip Code)
</TABLE>


                                (704) 664-4888
           -------------------------------------------------------
             (Registrant's Telephone Number, Including Area Code)


       Securities Registered Pursuant to Section 12(b) of the Act:  None
                                                                    ----

          Securities Registered Pursuant to Section 12(g) of the Act:

                          Common Stock, no par value
                          --------------------------
                               (Title of class)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.       Yes     X               No
                                              -------                -------

Indicate by check mark if disclosure of delinquent filers in response to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

State the aggregate market value of the voting stock held by non-affiliates of
the registrant (excluding five percent owners as non-affiliates).  The aggregate
market value shall be computed by reference to the price at which the stock was
sold, or the average bid and asked prices of such stock, as of a specified date
within 60 days prior to the date of filing.  $18,527,634 common stock, no par
                                             --------------------------------
value, based on the closing price of such common stock on March 14, 2001.
-------------------------------------------------------------------------

Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.
699,156 shares of common stock, no par value, outstanding at March 14, 2001.
----------------------------------------------------------------------------


                      DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Annual Report of Coddle Creek Financial Corp. for the year ended
December 31, 2000 (the "2000 Annual Report"), are incorporated by reference into
Part I, Part II and Part IV.

Portions of the Proxy Statement for the 2001 Annual Meeting of Shareholders of
Coddle Creek Financial Corp. to be held on April 26, 2001, are incorporated by
reference into Part III.

Portions of the Registration Statement of Coddle Creek Financial Corp. On Form
S-1, Registration No. 333-35497, dated September 12, 1997, as amended on
November 5 and 10, 1997, are incorporated by reference into Part IV.
<PAGE>

                                    PART I

ITEM 1. BUSINESS

General

     Prior to December 30, 1997, Mooresville Savings Bank, Inc., S.S.B. (the
"Bank") operated as a mutual North Carolina-chartered savings bank. On December
30, 1997, the Bank converted from a North Carolina-chartered mutual savings bank
to a North Carolina-chartered stock savings bank (the "Conversion"). In
connection with the Conversion, all of the issued and outstanding capital stock
of the Bank was acquired by Coddle Creek Financial Corp., a North Carolina
corporation (the "Company"), which was organized to become the holding company
of the Bank. At that time, the Company had an initial public offering of its
common stock, no par value (the "Common Stock").

     The Company is a bank holding company registered with the Board of
Governors of the Federal Reserve System (the "Federal Reserve") under the Bank
Holding Company Act of 1956, as amended (the "BHCA") and the savings bank
holding company laws of North Carolina. The Company's executive office is
located at 347 North Main Street, Mooresville, North Carolina.

     The Company's activities consist of investing the remaining proceeds of its
initial public offering which were retained at the holding company level,
holding the indebtedness outstanding from the Mooresville Savings Bank, Inc.,
SSB Employee Stock Ownership Plan (the "ESOP") and owning the Bank. The
Company's principal sources of income are earnings on its investments and
interest payments received from the ESOP with respect to the ESOP loan. In
addition, the Company will receive any dividends which are declared and paid by
the Bank on its capital stock. Subsequent to the Conversion, the Company has
paid two special dividends to its shareholders, a portion of which is to qualify
as a return of capital. The amounts of these dividends were $17.18 and $20.00,
which were paid on September 8, 1999 and January 24, 2001, respectively. The
major expenses of the Company include interest expense related to the Company's
short term indebtedness, the proceeds of which funded the return of capital
distributions to shareholders.

     At December 31, 2000, the Company and the Bank had total assets of $151.7
million, net loans of $130.5 million, deposits of $104.4 million and
stockholders' equity of $35.0 million.

     The Bank was originally chartered in 1937. It has been a member of the
Federal Home Loan Bank ("FHLB") system, and its deposits have been federally
insured since 1947. The Bank's deposits are insured by the Savings Association
Insurance Fund (the "SAIF") of the Federal Deposit Insurance Corporation (the
"FDIC") to the maximum amount permitted by law. The Bank conducts business
through three (3) full service offices in Mooresville, Cornelius and
Huntersville, North Carolina.

     The Bank is engaged primarily in the business of attracting retail deposits
from the general public and using such deposits to make mortgage loans secured
by real estate. The Bank makes one-to-four family residential real estate loans,
loans secured by multi-family residential and commercial property, construction
loans and equity line of credit loans. The Bank also makes loans which are not
secured by real property, such as loans secured by pledged deposit accounts and
various types of secured and unsecured consumer loans. The Bank's primary source
of revenue is interest income from its lending activities. The Bank's other
major sources of revenue are interest and dividend income from investments,
interest income from its interest-earning deposit balances in other depository
institutions, and transactions and fee income from its lending and deposit
activities. The major expenses of the Bank are interest on deposits and general
and administrative expenses such as employee compensation and benefits, federal
deposit insurance premiums, data processing expenses and occupancy expenses.
<PAGE>

     The operations of the Bank and depository institutions in general are
significantly influenced by general economic conditions and by related monetary
and fiscal policies of depository institution regulatory agencies, including the
Federal Reserve, the FDIC and the North Carolina Administrator, Savings
Institutions Division, North Carolina Department of Commerce (the
"Administrator"). Deposit flows and cost of funds are influenced by interest
rates on competing investments and general market rates of interest. Lending
activities are affected by the demand for financing of real estate and other
types of loans, which in turn are affected by the interest rates at which such
financing may be offered and other factors affecting local demand and
availability of funds.

     At December 31, 2000, the Company and the Bank had a total of 30 full-time
employees and 2 part-time employees.

     The Company has no operations and conducts no business of its own other
than owning the Bank, investing its portion of the net proceeds received in the
Conversion and lending funds to the ESOP.  Accordingly, the discussion of the
business which follows in the Form 10-K concerns the business conducted by the
Bank, unless otherwise indicated.

Lending Activities

     General. The Bank is engaged primarily in the business of attracting
deposits from the general public and using such deposits to make mortgage loans
secured by real estate. The Bank's primary source of revenue is interest and fee
income from its lending activities, consisting primarily of mortgage loans for
the purchase or refinancing of one-to-four family residential real property
located in its primary market area. The Bank also makes loans secured by multi-
family and nonresidential properties, construction loans, equity line loans,
savings account loans and various types of secured and unsecured consumer loans.
Approximately 97% of the Bank's gross loan portfolio is secured by real estate.
As of December 31, 2000, all of the loans in the Bank's real estate loan
portfolio were secured by properties in North Carolina. On December 31, 2000,
the Bank's largest single outstanding loan had a balance of approximately
$600,000. This loan was performing in accordance with its original terms. In
addition to interest earned on loans, the Bank receives fees in connection with
loan originations, loan servicing, loan modifications, late payments, loan
assumptions and other miscellaneous services. The Bank generally does not sell
its loans; both fixed and adjustable rate loans are originated with the
intention that they will be held in the Bank's loan portfolio.

     Loan Portfolio Composition. The Bank's net loan portfolio totaled
approximately $130.5 million at December 31, 2000 representing 86.0% of the
Bank's total assets at such date. At December 31, 2000, 81.2% of the Bank's
gross loan portfolio was composed of one-to-four family residential mortgage
loans. Multi-family residential and non-residential real estate loans
represented 3.5% on such date. Construction loans and equity lines represented
5.2% and 7.5%, respectively, of the Bank's loan portfolio, before net items, on
such date, and consumer loans, including installment and other loans, totaled
2.6% of the Bank's gross loan portfolio. As of December 31, 2000, 15.7% of the
loans in the Bank's loan portfolio, before net items, had adjustable interest
rates. Loans maturing or repricing on or after December 31, 2000, consist of
fixed rate real estate loans of $103.4 million, adjustable rate real estate
loans of $21.4 million, construction loans of $4.3 million and other loans of
$2.3 million. See Note 3 to the "Notes to Consolidated Financial Statements" in
the 2000 Annual Report.

     One to Four Family Residential Real Estate Lending. The Bank's primary
lending activity, which it intends to continue to emphasize, is the origination
of fixed and adjustable rate mortgage loans to enable borrowers to purchase or
refinance one-to-four family residential real property. Consistent with the
Bank's emphasis on being a community-oriented financial institution, it is and
has been the Bank's strategy to focus its lending efforts in its primary market
area. On December 31, 2000, approximately 81.2% of the Bank's real estate loan
portfolio, before net items, consisted of one-to-four family residential real
estate loans. These include both loans secured by detached single-family
residences and condominiums and loans secured by housing containing not more
than four separate dwelling units. Of such loan amounts, 9.6% had adjustable
interest rates.
<PAGE>

     Adjustable rate loans are generally considered to involve a greater degree
of credit risk than fixed rate loans because borrowers may have difficulty
meeting their payment obligations if interest rates and required payment amounts
increase substantially. Substantially all of the fixed-rate loans in the Bank's
mortgage loan portfolio have due on sale provisions allowing the Bank to declare
the unpaid balance due and payable in full upon the sale or transfer of an
interest in the property securing the loan.

     Historically, the Bank has not originated its one-to-four family
residential mortgage or other loans with the intention that they will be sold in
the secondary market. Accordingly, the Bank originates fixed rate one-to-four
family residential real estate loans which satisfy the Bank's underwriting
requirements and are tailored to its local community, but do not necessarily
satisfy various technical FHLMC and FNMA underwriting requirements and purchase
requirements not related to documentation.

     Although the Bank believes that many of its one to four family residential
loans could be sold in the secondary market, some of such nonconforming loans
could be sold only after the Bank incurred certain costs and/or discounted the
purchase price. As a result, the Bank's loan portfolio is less liquid than would
be the case if it was composed entirely of loans originated in conformity with
secondary market requirements.

     As of December 31, 2000, the Bank had 88 loan relationships with individual
borrowers in excess of $200,000, totaling approximately $7.2 million or 5.5% of
the Bank's total loan portfolio. The majority of these loans are secured by
residential real estate located near or on Lake Norman, North Carolina, which is
located in parts of Catawba, Iredell, Lincoln and Mecklenburg counties. While
these loans are currently performing according to the terms of their loan
documents, an economic downturn in the Bank's primary market area, in which Lake
Norman is located, could have an adverse effect on the performance of these
loans.

     See also Note 3 of the "Notes to Consolidated Financial Statements" in the
2000 Annual Report.

Investment Securities

     Interest and dividend income from investment securities generally provides
the second largest source of income to the Company and the Bank after interest
on loans. In addition, the Bank receives interest income from deposits in other
financial institutions.

     At December 31, 2000, the Company's investment portfolio totaled
approximately $15.9 million and consisted of U.S. government and agency
securities, FHLB and municipal bonds, equity securities, interest-earning
deposits and certificates of deposit in other financial institutions and stock
of the FHLB of Atlanta.

     As a member of the FHLB of Atlanta, the Bank is required to maintain an
investment in stock of the FHLB of Atlanta equal to the greater of 1% of the
Bank's outstanding home loans or 5% of its outstanding advances from the FHLB of
Atlanta. No ready market exists for such stock, which is carried at cost. As of
December 31, 2000, the Bank's investment in stock of the FHLB of Atlanta was
$1.2 million.

     North Carolina regulations require the Bank to maintain a minimum amount of
liquid assets which may be invested in specified short-term securities. See "--
Regulation of Bank-Liquidity." The Bank's current investment policy provides
that investment decisions will be made by George W. Brawley, Jr., President and
Chief Executive Officer, or by Dale W. Brawley, Executive President and
Treasurer, in his absence, and reviewed monthly by the Board of Directors. The
investment policy provides that the objectives of the investment portfolio are
to: (i) establish an acceptable level of interest rate and credit risk for all
investments; (ii) generate an acceptable rate of return on investments; (iii)
provide for adequate levels of liquidity for the Bank; and (iv) provide guidance
to management by the Board of Directors on the investments desired for the Bank.

     Permitted investments include FHLB daily time deposits, insured
certificates of deposit, government securities and government agency securities.
The investment policy also permits investment in the general obligations of
municipalities primarily located within North Carolina. Such general obligations
are considered less
<PAGE>

risky since they are repaid with taxes collected by the municipality, not with
revenues from a particular project. At December 31, 2000, $1.8 million or 11.60%
of the Company's investment portfolio consisted of municipal bonds issued by
municipalities located in North Carolina, all of which had an A or above rating
by Moodys Investment Service.

     At December 31, 2000, the market value of the Company's investment
securities available for sale and held to maturity, excluding interest-earning
deposits, certificates of deposit and stock of the FHLB of Atlanta (all of which
had a total market value of $4.3 million) was $4.2 million.

     See Note 2 of "Notes to Consolidated Financial Statements" in the 2000
Annual Report.

Deposits and Borrowings

     Deposits. Deposits are the primary source of the Bank's funds for lending
and other investment purposes. The Bank attracts both short-term and long-term
deposits from the general public by offering a variety of accounts and rates.
The Bank offers passbook savings accounts, statement savings accounts,
negotiable order of withdrawal ("NOW") accounts, money market demand accounts,
non-interest-bearing accounts, and fixed interest rate certificates with varying
maturities. At December 31, 2000, 72.2% of the Bank's deposits consisted of
certificate accounts, 9.2% consisted of passbook savings accounts, 17.4%
consisted of interest-bearing transaction (NOW and Money Market) accounts and
1.2% consisted of noninterest-bearing transaction accounts. Deposit flows are
greatly influenced by economic conditions, the general level of interest rates,
competition, and other factors, including the restructuring of the thrift
industry. The Bank's savings deposits traditionally have been obtained primarily
from its primary market area. The Bank utilizes traditional marketing methods to
attract new customers and savings deposits, including print, television and
radio media advertising, direct mailings and the internet. The Bank does not
utilize the services of deposit brokers. At December 31, 2000, 1999, and 1998,
the Bank's deposits totaled $104.4 million, $90.6 million, and $87.6 million,
respectively. See Note 5 to the "Notes to Consolidated Financial Statements" in
the 2000 Annual Report.

     In addition to deposits, the Bank derives funds from loan principal
repayments, interest payments, investment income and principal repayments,
interest from its own interest-earning deposits, interest income and advances
from the FHLB of Atlanta and otherwise from its operations. Loan repayments are
a relatively stable source of funds while deposit inflows and outflows may be
significantly influenced by general interest rates and money market conditions.

     Borrowings. The Bank may use borrowings on a short-term basis to compensate
for reductions in the availability of funds from other sources. Borrowings may
also be used on a longer term basis for general business purposes. The Bank's
principal source of long-term borrowings are advances from the FHLB of Atlanta.
The FHLB system functions in a reserve credit capacity for savings institutions.
As a member, the Bank is required to own capital stock in the FHLB of Atlanta
and is authorized to apply for advances from the FHLB of Atlanta on the security
of that stock and a floating lien on certain of its real estate secured loans
and other assets. Each credit program has its own interest rate and range of
maturities. Depending on the program, limitations on the amount of advances are
based either on a fixed percentage of an institution's net worth or on the FHLB
of Atlanta's assessment of the institution's creditworthiness. At December 31,
2000, the Bank had outstanding advances from the FHLB equal to $5.0 million.
Interest on such advances is payable at a 6.52% interest rate with the balance
due on September 17, 2001. Advances from the FHLB are collateralized by the
Bank's stock in the FHLB and qualifying first mortgage loans.

     In addition to the foregoing, at December 31, 2000, the Company had a note
payable outstanding for which $4.0 million remained due and outstanding on that
date. On January 23, 2001, the Bank borrowed additional funds and executed a new
promissory note in the amount of $16 million. Under the terms of the January 23,
2001 note, interest installment payments are due monthly at the prime rate less
1.00% with the principal balance due July 24, 2002. The note is collateralized
by the Bank's common stock.

     See Notes 6 and 18 to the "Notes to Consolidated Financial Statements" in
the 2000 Annual Report.
<PAGE>

Subsidiaries

     The Company has no subsidiaries other than the Bank.  The Bank has no
subsidiaries.

Results of Operations

     The Bank's results of operations are dependent primarily on net interest
income, which is the difference between the income earned on its interest-
earning assets, such as loans and investments, and the cost of its interest-
bearing liabilities, consisting of deposits and borrowings. The Bank's
operations are affected to a much lesser degree by non-interest income, such as
transaction and other service fee income, and other sources of income. The
Bank's net income is also affected by, among other things, provisions for loan
losses and operating expenses. The Bank's principal operating expenses, aside
from interest expense, consist of compensation and employee benefits, office
occupancy costs, data processing expenses and federal deposit insurance
premiums. The Bank's results of operations are also significantly affected by
general economic and competitive conditions, particularly changes in market
interest rates, government legislation and policies concerning monetary and
fiscal affairs, housing and financial institutions and the attendant actions of
regulatory authorities.

Market Area

     The Bank's primary market area consists of the communities in an
approximately fifteen (15) mile radius around its headquarters office in
Mooresville, North Carolina.  This area includes portions of Iredell,
Mecklenburg, Lincoln, Catawba, Rowan and Cabarrus counties in North Carolina.
Mooresville is located only thirty (30) miles north of Charlotte, North Carolina
and the Bank's primary market area is and will continue to be significantly
affected by its close proximity to this major metropolitan area.

     Employment in the Bank's primary market area is diversified among
manufacturing, agricultural, retail and wholesale trade, government, services
and utilities.  Major employers include Lake Norman Regional Medical Center,
Walmart, and Mooresville Graded Schools.

Competition

     The Bank has operated in the Mooresville community for more than 60 years
and is the only financial institution headquartered in Mooresville.  However,
the Bank faces strong competition both in attracting deposits and making real
estate and other loans.  Its most direct competition for deposits has
historically come from other savings institutions, credit unions, brokerage
firms and commercial banks located in its primary market area, including large
financial institutions which have greater financial and marketing resources
available to them.  Bank of America and First Union, two national money center
commercial banks, are currently headquartered in Charlotte, North Carolina,
which is only 30 miles from the Bank's primary market area.  As of December 31,
2000, there were 8, 9 and 7 depository institutions with a total of 14, 9 and 8
offices in Mooresville, Cornelius and Huntersville, North Carolina,
respectively.  Based upon June 30, 2000 comparative data, the Bank had 21.5% and
6.99% of the deposits in Mooresville and Iredell County, respectively.  As a
result of this intense competition, the Bank's branch offices, excluding the
Mooresville office, have lower levels of deposits than the industry average.

     The Bank has also faced additional significant competition for investors'
funds from short-term money market securities and other corporate and government
securities.  While the Bank's market share of deposits has decreased in recent
years, its deposit base has grown principally due to economic growth in the
Bank's market area.  The ability of the Bank to attract and retain savings
deposits depends on its ability to generally provide a rate of return, liquidity
and risk comparable to that offered by competing investment opportunities.

     The Bank also experiences strong competition for real estate loans from
other savings institutions, commercial banks, and mortgage banking companies.
The Bank competes for loans primarily through the interest rates and loan fees
it charges, the efficiency and quality of services it provides borrowers, and
its more flexible
<PAGE>

underwriting standards. Competition may increase as a result of the continuing
reduction of restrictions on the interstate operations of financial
institutions.

Supervision and Regulation

     Bank holding companies and state savings banks are extensively regulated
under both federal and state law. The following is a brief summary of certain
statutes and rules and regulations that affect or will affect the Company and
the Bank. This summary is qualified in its entirety by reference to the
particular statute and regulatory provisions referred to below, and it is not
intended to be an exhaustive description of the statutes or regulations
applicable to the Company and the Bank. Supervision, regulation and examination
of the Company and the Bank by the regulatory agencies are intended primarily
for the protection of depositors rather than shareholders of the Company.

Regulation of the Company

     General. The Company was organized for the purpose of acquiring and holding
all of the capital stock of the Bank to be issued in the Conversion. As a
savings bank holding company subject to the Bank Holding Company Act of 1956, as
amended ("BHCA"), the Company is subject to certain regulations of the Federal
Reserve. Under the BHCA, a bank holding company such as the Company, which does
not qualify as a financial holding company under the GLB Act (as hereinafter
defined), is prohibited from engaging in activities other than banking, managing
or controlling banks or other permissible subsidiaries, furnishing services to
or performing services for its subsidiaries or engaging in any other activity
which the Federal Reserve determines to be so closely related to banking or
managing or controlling banks as to be a proper incident thereto. The BHCA also
prohibits the Company from acquiring direct or indirect control of more than 5%
of the outstanding voting stock or substantially all of the assets of any bank
or savings bank or merging or consolidating with another bank holding company or
savings bank holding company without prior approval of the Federal Reserve.

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

     Similarly, Federal Reserve approval (or, in certain cases, non-objection)
must be obtained prior to any person acquiring control of the Company. Control
is conclusively presumed to exist if, among other things, a person owns,
controls, or has the power to vote 25% or more of any class of voting stock of
the holding company or controls in any manner the election of a majority of the
directors of the holding company. Control is presumed to exist if a person owns,
controls, or has the power to vote more than 10% of any class of voting stock
and the stock is registered under Section 12 of the Exchange Act or the acquiror
will be the largest shareholder after the acquisition.

     There are a number of obligations and restrictions imposed on bank holding
companies and their depository institution subsidiaries by law and regulatory
policy that are designed to minimize potential loss to the depositors of such
depository institutions and FDIC insurance funds in the event the depository
institution becomes in danger of default or is in default. For example, to avoid
receivership of an insured depository institution subsidiary, a bank holding
company is required to guarantee the compliance of any insured depository
institution subsidiary that has become "undercapitalized" with the terms of any
capital restoration plan filed by such subsidiary with its appropriate federal
banking agency up to the lesser of (i) an amount equal to 5% of the
institution's total assets at the time the institution became undercapitalized,
or (ii) the amount which is necessary to bring the institution into compliance
with all acceptable capital standards as of the time the institution initially
fails to comply with such capital restoration plan. Under a policy of the
Federal Reserve with respect to bank holding company operations, a bank holding
company is required to serve as a source of financial strength to its subsidiary
depository institutions and to commit resources to support such institutions in
circumstances where it might not do so absent such policy. The Federal Reserve
under the BHCA also has the authority to require a bank holding company to
terminate any activity or to relinquish control of a nonbank subsidiary (other
than a nonbank subsidiary of a bank) upon the
<PAGE>

Federal Reserve's determination that such activity or control constitutes a
serious risk to the financial soundness and stability of any bank subsidiary of
the bank holding company.

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

     As a result of the Company's ownership of the Bank, the Company will be
registered under the savings bank holding company laws of North Carolina.
Accordingly, the Company is also subject to regulation and supervision by the
Administrator.

     Financial Services Modernization Legislation. The Gramm-Leach-Bliley Act
(the "Act" or the "GLB Act") was signed into law on November 12, 1999 to remove
barriers separating banking, securities and insurance firms and to make other
reforms. Certain provisions of the Act were effective immediately upon signing;
other provisions generally took effect between 120 days and 18 months following
enactment.

     Financial Affiliations. Title I of the Act facilitates affiliations among
banks, securities firms and insurance companies. Financial organizations may
structure new financial affiliations through a holding company structure, or a
financial subsidiary (with limitations on activities and appropriate
safeguards). A bank holding company may now qualify as a financial holding
company and expand into a wide variety of services that are financial in nature,
provided that its subsidiary depository institutions are well-managed, well-
capitalized and have received a "satisfactory" rating on their last Community
Reinvestment Act ("CRA") examination. A bank holding company which does not
qualify as a financial holding company under the Act is generally limited in the
types of activities in which it may engage to those that the Federal Reserve
Board had recognized as permissible for a bank holding company prior to the date
of enactment of the Act. See "Regulation of the Company--General," for a
discussion of the traditional types of permissible activities for a bank holding
company.

     National banks remain limited in the scope of activities they may exercise
directly within the bank, but an eligible national bank may have a financial
subsidiary that exercises many of the expanded financial services authorized for
a financial holding company. A national bank cannot engage in merchant banking
either directly or through a subsidiary, but a financial holding company is
authorized to have an affiliate company that engages in merchant banking.

     Subject to approval by the appropriate state banking regulatory authority
and upon meeting certain eligibility criteria, state banks may have financial
subsidiaries that can engage in activities permitted for financial subsidiaries
of national banks.

     Functional Regulation. The Act designates the Federal Reserve as the
overall umbrella supervisor of the new financial services holding companies. The
Act adopts a system of functional regulation where the primary regulator is
determined by the nature of activity rather than the type of institution. Under
this principle, securities activities are regulated by the SEC and other
securities regulators, insurance activities by the state insurance authorities,
and banking activities by the appropriate banking regulator.

     Insurance. The Act reaffirms that states are the regulators for insurance
activities of all persons, including acting as the functional regulator for the
insurance activities of federally-chartered banks. However, states may not
prevent depository institutions and their affiliates from conducting insurance
activities.
<PAGE>

     Privacy. The Act imposes restrictions on the ability of financial services
firms such as the Company and the Bank to share customer information with non-
affiliated third parties. The Act: 1) requires financial services firms to
establish privacy policies and disclose them annually to customers, explaining
how nonpublic personal information is shared with affiliates and third parties;
2) currently requires that regulatory agencies to have standards for sharing
customer information; 3) permits customers to prohibit ("opt-out") of the
disclosure of personal information to non-affiliated third parties; 4) prohibits
the sharing of customer information with marketers of credit card and other
account numbers; and, 5) prohibits "pretext" calling. The privacy provisions,
however, do allow a community bank to share information with third parties that
sell financial products, such as insurance companies or securities firms. The
privacy provision became effective in November 2000, with full compliance
required by July 1, 2001.

     Additional Provisions. (1) The Act reforms the Federal Home Loan Bank
System to provide small banks with greater access to funds for making loans to
small business and small farmers. (2) The Act obligates operators of automated
teller machines ("ATMs") to provide notices to customers regarding surcharge
practices. (3) The Act provides that financial institutions with less than $250
million in assets will normally be examined for compliance with the Community
Reinvestment Act ("CRA") only once every five years if they maintain an
"outstanding" rating and once every four years they if have a "satisfactory"
rating. CRA agreements between financial institutions and community groups must
be disclosed and reported to the public.

     Capital Adequacy Guidelines for Holding Companies. The Federal Reserve has
adopted capital adequacy guidelines for bank holding companies and banks that
are members of the Federal Reserve system and have consolidated assets of $150
million or more. For bank holding companies with less than $150 million in
consolidated assets, the guidelines are applied on a bank-only basis unless the
parent bank holding company (i) is engaged in nonbank activity involving
significant leverage or (ii) has a significant amount of outstanding debt that
is held by the general public.

     Bank holding companies subject to the Federal Reserve's capital adequacy
guidelines are required to comply with the Federal Reserve's risk-based capital
guidelines. Under these regulations, the minimum ratio of total capital to risk-
weighted assets (including certain off-balance sheet activities, such as standby
letters of credit) is 8%. At least half of the total capital is required to be
"Tier I capital," principally consisting of common stockholders' equity, non-
cumulative perpetual preferred stock, and a limited amount of cumulative
perpetual preferred stock, less certain goodwill items. The remainder ("Tier II
capital") may consist of a limited amount of subordinated debt, certain hybrid
capital instruments and other debt securities, perpetual preferred stock, and a
limited amount of the general loan loss allowance. In addition to the risk-based
capital guidelines, the Federal Reserve has adopted a minimum Tier I capital
(leverage) ratio, under which a bank holding company must maintain a minimum
level of Tier I capital to average total consolidated assets of at least 3% in
the case of a bank holding company which has the highest regulatory examination
rating and is not contemplating significant growth or expansion. All other bank
holding companies are expected to maintain a Tier I capital (leverage) ratio of
at least 1% to 2% above the stated minimum.

     Repurchase Limitations. Federal regulations require that the Company must
obtain Federal Reserve approval in order to use more than 10% of its net worth
to make stock repurchases during any 12 month period unless the Company (i) both
before and after the redemption satisfies capital requirements for "well
capitalized" state member banks; (ii) received a one or two rating in its last
examination; and (iii) is not the subject of any unresolved supervisory issues.

     Federal Securities Laws. The Company has registered its Common Stock with
the SEC pursuant to Section 12(g) of the Exchange Act and will not deregister
the Common Stock for a period of three years following the completion of the
Conversion. As a result of such registration, the proxy and tender offer rules,
insider trading reporting requirements, annual and periodic reporting and other
requirements of the Exchange Act are applicable to the Company.

     The registration under the Securities Act of any offerings of the Common
Stock does not cover the resale of such shares. Shares of the Common Stock
purchased by persons who are not affiliates of the Company may be
<PAGE>

resold without registration. Shares purchased by an affiliate of the Company are
subject to the resale provisions of Rule 144 under the Securities Act. So long
as the Company meets the current public information requirements of Rule 144
under the Securities Act, each affiliate of the Company who complies with the
other conditions of Rule 144 (including those that require the affiliate's sale
to be aggregated with those of certain other persons) will be able to sell in
the public market, without registration, a number of shares not to exceed, in
any three-month period, the greater of (i) 1% of the outstanding shares of the
Company or (ii) the average weekly volume of trading in such shares during the
preceding four calendar weeks. Provision may be made in the future by the
Company to permit affiliates to have their shares registered for sale under the
Securities Act under certain circumstances. There are currently no demand
registration rights outstanding. However, in the event the Company at some
future time determines to issue additional shares from its authorized but
unissued shares, the Company might offer registration rights to certain of its
affiliates who want to sell their shares.

Regulation of the Bank

     General. Federal and state legislation and regulation significantly affect
the operations of federally insured savings institutions and other federally
regulated financial institutions. The operations of regulated depository
institutions, including the Bank, is subject to changes in applicable statutes
and regulations from time to time. Such changes may or may not be favorable to
the Bank.

     The Bank is an insured North Carolina-chartered savings bank that is a
member of the FHLB system. Its deposits are insured through the SAIF, and it is
subject to supervision and examination by and the regulations and reporting
requirements of the FDIC and the Administrator, which are its primary federal
and state banking regulators respectively.

     As an insured institution, the Bank is prohibited from engaging as
principal in any activity, or acquiring or retaining any equity investment of a
type or in an amount, that is not permitted for national banks unless (i) the
FDIC determines that the activity or investment would pose no significant risk
to the SAIF, and (ii) the Bank is, and continues to be, in compliance with all
applicable capital standards.  A savings bank generally is prohibited from
investing more than 15% of its total assets in business, commercial, corporate
and agricultural loans and from directly or indirectly acquiring or retaining
any corporate debt security that is not of investment grade (generally referred
to as "junk bonds").

     Subject to limitation by the Administrator, North Carolina-chartered
savings banks may make any loan or investment or engage in any activity which is
permitted to federally chartered institutions.  However, a North Carolina-
chartered savings bank cannot invest more than 15% of its total assets in
business, commercial, corporate and agricultural loans.  In addition to such
lending authority, North Carolina-chartered savings banks are authorized to
invest funds, in excess of loan demand, in certain statutorily permitted
investments, including but not limited to (i) obligations of the United States,
or those guaranteed by it; (ii) obligations of the State of North Carolina;
(iii) bank demand or time deposits; (iv) stock or obligations of the federal
deposit insurance fund or a FHLB; (v) savings accounts of any savings
institution as approved by the board of directors; and (vi) stock or obligations
of any agency of the State of North Carolina or of the United States or of any
corporation doing business in North Carolina whose principal business is to make
education loans.

     In addition, the Bank is subject to various regulations promulgated by the
Federal Reserve including, without limitation, Regulation B (Equal Credit
Opportunity), Regulation D (Reserves), Regulation E (Electronic Fund Transfers),
Regulation O (Loans to Executive Officers, Directors and Principal
Shareholders), Regulation Z (Truth in Lending), Regulation CC (Availability of
Funds) and Regulation DD (Truth in Savings).

     The FDIC and the Administrator have broad powers to enforce laws and
regulations applicable to the Bank.  Among others, these powers include the
ability to assess civil money penalties, to issue cease and desist or removal
orders and to initiate injunctive actions.  In general, these enforcement
actions may be initiated in response to violations of laws and regulations and
the conduct of unsafe and unsound practices.
<PAGE>

     Transactions with Affiliates. Under current federal law, transactions
between the Bank and any affiliate are governed by Sections 23A and 23B of the
Federal Reserve Act. An affiliate of the Bank is any company or entity that
controls, is controlled by or is under common control with the savings bank.
Generally, subsidiaries of a bank, other than a bank subsidiary, and certain
other types of companies are not considered to be affiliates. Generally,
Sections 23A and 23B (i) limit the extent to which the Bank or its subsidiaries
may engage in "covered transactions" with any one affiliate to an amount equal
to 10% of such the Bank's capital stock and surplus, and contain an aggregate
limit on all such transactions with all affiliates to an amount equal to 20% of
such capital stock and surplus and (ii) require that all such transactions be on
terms substantially the same, or at least as favorable, to the Bank or the
subsidiary as those provided to a nonaffiliate. The term "covered transaction"
includes the making of loans or other extensions of credit to an affiliate, the
purchase of assets from an affiliate, the purchase of, or an investment in, the
securities of an affiliate, the acceptance of securities of an affiliate as
collateral for a loan or extension of credit to any person, or issuance of a
guarantee, acceptance or letter of credit on behalf of an affiliate.

     Further, current federal law has extended to savings banks the restrictions
contained in Section 22(h) of the Federal Reserve Act with respect to loans to
directors, executive officers and principal stockholders. Under Section 22(h),
loans to directors, executive officers and stockholders who, directly or
indirectly, own more than 10% of any class of voting securities of a savings
bank, and certain affiliated entities of any of the foregoing, may not exceed,
together with all other outstanding loans to such person and affiliated
entities, the savings bank's loans-to-one borrower limit as established by
federal law (as discussed below). Section 22(h) also prohibits loans above
amounts prescribed by the appropriate federal banking agency to directors,
executive officers or stockholders who own more than 10% of a savings bank, and
their respective affiliates, unless such loan is approved in advance by a
majority of the disinterested directors of the board of directors of the savings
bank and the Company. Any "interested" director may not participate in the
voting. The Federal Reserve has prescribed the loan amount (which includes all
other outstanding loans to such person), as to which such prior board of
director approval is required, as being the greater of $25,000 or 5% of
unimpaired capital and unimpaired surplus (up to $500,000). Further, pursuant to
Section 22(h) the Federal Reserve requires that loans to directors, executive
officers, and principal stockholders be made on terms substantially the same as
offered in comparable transactions to other persons and not involve more than
the normal risk of repayment or present other unfavorable features. Section
22(h) also imposes additional limits on amounts a savings bank can loan to an
executive officer or director.

     FDIC Insurance Assessments. The Bank is also subject to insurance
assessments imposed by the FDIC. The FDIC currently uses a risk-based assessment
system that takes into account the risks attributable to different categories
and concentrations of assets and liabilities for purposes of calculating deposit
insurance assessments payable by insured depository institutions. The risk-based
assessment system categorizes institutions as "well capitalized," "adequately
capitalized" or "undercapitalized." These three categories are substantially
similar to the prompt corrective action categories (see "-Prompt Corrective
Action"), with the "undercapitalized" category including institutions that are
"undercapitalized," "significantly undercapitalized" and "critically
undercapitalized" for prompt corrective action purposes. Institutions also are
assigned by the FDIC to one of three supervisory subgroups within each capital
group. The particular supervisory subgroup to which an institution is assigned
is based on a supervisory evaluation provided to the FDIC by the institution's
primary federal banking regulator and information which the FDIC determines to
be relevant to the institution's financial condition and the risk posed to the
deposit insurance fund. An institution's insurance assessment rate then is
determined based on the capital category and supervisory subgroup to which it is
assigned. Under the risk-based assessment system, there are nine assessment risk
classifications (i.e., combinations of capital groups and supervisory subgroups)
to which different assessment rates (ranging from zero to 31 basis points) are
applied. The Bank's federal deposit insurance premium expenses, including all
assessments (e.g. FICO assessments) imposed by the FDIC, totaled $20,641,
$56,263, and $59,395 for the years ended December 31, 2000, 1999, and 1998,
respectively. In addition, the bank pays premiums assessed against all banks
based on their deposit levels to service debt on bonds issued to recapitalize
the deposit insurance funds.

     Under the FDIA, an institution's deposit insurance may be terminated by the
FDIC upon a finding that the institution has engaged in unsafe and unsound
practices, is in an unsafe or unsound condition, or has violated any applicable
law, regulation, rule, order, or condition imposed by the FDIC.
<PAGE>

     Based on the current financial condition and capital levels of the Bank,
the Bank does not expect that FDIC insurance assessments will have a material
impact on the Bank's future earnings.

     Community Reinvestment Act. Under the Community Reinvestment Act ("CRA") as
implemented by regulations of the FDIC, an insured institution has a continuing
and affirmative obligation consistent with its safe and sound operation to help
meet the credit needs of its entire community, including low and moderate income
neighborhoods. The CRA does not establish specific lending requirements or
programs for financial institutions, nor does it limit an institution's
discretion to develop, consistent with the CRA, the types of products and
services that it believes are best suited to its particular community. The CRA
requires the federal banking regulators, in connection with their examinations
of insured institutions, to assess the institutions' records of meeting the
credit needs of their communities, using the ratings of "outstanding,"
"satisfactory," "needs to improve," or "substantial noncompliance," and to take
that record into account in its evaluation of certain applications by those
institutions. All institutions are required to make public disclosure of their
CRA performance ratings. During the Bank's last compliance examination, the Bank
received a "satisfactory" rating with respect to CRA compliance. For further
discussion regarding the CRA, see "-Financial Services Modernization
Legislation."

     Net Worth and Capital Adequacy Requirements Applicable to the Bank. The
Bank is required to comply with the capital adequacy standards established by
state and federal laws and regulations. The Administrator requires that savings
banks maintain net worth not less than 5% of its total assets. Intangible assets
must be deducted from net worth and assets when computing compliance with this
requirement. The Bank complied with the Administrator's net worth requirements
as of December 31, 2000.

     In addition, the FDIC has promulgated risk-based capital and leverage
capital guidelines for determining the adequacy of a bank's capital, and all
applicable capital standards must be satisfied for the Bank to be considered in
compliance with the FDIC's requirements. Under the FDIC's risk-based capital
measure, the minimum ratio ("Total Risk-Based Capital Ratio") of a bank's total
capital to its risk-weighted assets (including certain off-balance-sheet items,
such as standby letters of credit) is 8.0%. At least half of total capital must
be composed of common equity, undivided profits, minority interests in the
equity accounts of consolidated subsidiaries, qualifying non-cumulative
perpetual preferred stock, and a limited amount of cumulative perpetual
preferred stock, less goodwill and certain other intangible assets ("Tier 1
Capital"). The remainder may consist of certain subordinated debt, certain
hybrid capital instruments and other qualifying preferred stock, a limited
amount of loan loss reserves, and net unrealized holding gains on equity
securities ("Tier 2 Capital"). At December 31, 2000, the Bank's Total Risk-Based
Capital Ratio and its ratio of Tier 1 Capital to risk-weighted assets ("Tier 1
Risk-Based Capital Ratio") were 39.8% and 38.7%, respectively, which were well
above the FDIC's minimum risk-based capital guidelines.

     Under the FDIC's leverage capital measure, the minimum ratio (the "Leverage
Capital Ratio") of Tier 1 Capital to total assets is 3.0% for banks that meet
certain specified criteria, including having the highest regulatory rating. All
other banks generally are required to maintain an additional cushion of 100 to
200 basis points above the stated minimum. The FDIC's guidelines also provide
that banks experiencing internal growth or making acquisitions will be expected
to maintain strong capital positions substantially above the minimum levels
without significant reliance on intangible assets, and the FDIC has indicated
that it will consider a bank's "Tangible Leverage Ratio" (deducting all
intangible assets) and other indicia of capital strength in evaluating proposals
for expansion or new activities. At December 31, 2000, the Bank's Leverage
Capital Ratio was 20.8% which was well above the FDIC's minimum leverage capital
guidelines.

     Failure to meet the FDIC's capital guidelines could subject a bank to a
variety of enforcement remedies, including issuance of a capital directive, the
termination of deposit insurance by the FDIC, a prohibition on the taking of
brokered deposits, and certain other restrictions on its business. As described
below, substantial additional restrictions can be imposed upon FDIC-insured
depository institutions that fail to meet applicable capital requirements.
See "-Prompt Corrective Action." The FDIC also considers interest rate risk
(arising when the interest rate sensitivity of an institution's assets does not
match the sensitivity of its liabilities or its off-balance-sheet
<PAGE>

position) in the evaluation of a bank's capital adequacy. Banks with excessive
interest rate risk exposure may be required to maintain higher levels of capital
to protect them against that exposure.

     Loans-To-One-Borrower. The Bank is subject to the Administrator's loans-to-
one-borrower limits. Under these limits, no loans and extensions of credit to
any borrower outstanding at one time and not fully secured by readily marketable
collateral shall exceed 15% of the net worth of the savings bank. Loans and
extensions of credit fully secured by readily marketable collateral may comprise
an additional 10% of net worth. These limits also authorize savings banks to
make loans-to-one-borrower, for any purpose, in an amount not to exceed
$500,000. A savings bank also is authorized to make loans-to-one-borrower to
develop domestic residential housing units, not to exceed the lesser of $30
million or 30% of the savings bank's net worth, provided that the purchase price
of each single-family dwelling in the development does not exceed $500,000 and
the aggregate amount of loans made pursuant to this authority does not exceed
150% of the savings bank's net worth. These limits also authorize a savings bank
to make loans-to-one-borrower to finance the sale of real property acquired in
satisfaction of debts in an amount up to 50% of the savings bank's net worth.

     As of December 31, 2000, the largest aggregate amount of loans which the
Bank had to any one borrower was $696,000. The Bank does not believe that the
loans-to-one-borrower limits will have a significant impact on its business,
operations and earnings.

     Limits on Rates Paid on Deposits and Brokered Deposits. Regulations
promulgated by the FDIC place limitations on the ability of insured depository
institutions to accept, renew or roll-over deposits by offering rates of
interest which are significantly higher than the prevailing rates of interest on
deposits offered by other insured depository institutions in the depository
institution's normal market area. Under these regulations, "well capitalized"
depository institutions may accept, renew or roll-over such deposits without
restriction, "adequately capitalized" depository institutions may accept, renew
or roll-over such deposits with a waiver from the FDIC (subject to certain
restrictions on payments of rates) and "undercapitalized" depository
institutions may not accept, renew, or roll-over such deposits. The regulations
contemplate that the definitions of "well capitalized," "adequately capitalized"
and "undercapitalized" will be the same as the definitions adopted by the FDIC
to implement the corrective action provisions discussed below. See "-Prompt
Corrective Action." As of December 31, 2000, the Bank was considered "well
capitalized," and, thus, was not subject to the limitations on rates payable on
its deposits.

     Only "well capitalized" depository institutions may accept, renew or roll-
over brokered deposits without prior regulatory approval. "Adequately
capitalized" banks and savings banks may accept, renew or roll-over brokered
deposits with a waiver from the FDIC (subject to certain restrictions on payment
of rates), while "undercapitalized" banks and savings banks may not accept,
renew or roll-over brokered deposits. The regulations contemplate that the
definitions of "well capitalized," "adequately capitalized" and
"undercapitalized" are the same as the definitions adopted by the agencies to
implement the prompt corrective action provisions discussed below. See "-Prompt
Corrective Action."

     Federal Home Loan Bank System. The FHLB system provides a central credit
facility for member institutions. As a member of the FHLB of Atlanta, the Bank
is required to own capital stock in the FHLB of Atlanta in an amount at least
equal to the greater of 1% of the aggregate principal amount of its unpaid
residential mortgage loans, home purchase contracts and similar obligations at
the end of each calendar year, or 5% of its outstanding advances (borrowings)
from the FHLB of Atlanta. On December 31, 2000, the Bank was in compliance with
this requirement.

     Each FHLB is required to contribute at least 10% of its reserves and
undivided profits to fund the principal and a portion of the interest on certain
bonds and certain other obligations which are used to fund the resolution of
troubled savings association cases, and to transfer a percentage of its annual
net earnings to the Affordable Housing Program. These contributions continue to
reduce the FHLB of Atlanta's earnings and the Bank's dividends on its FHLB of
Atlanta stock.
<PAGE>

     Reserve Requirements. Pursuant to regulations of the FRB, all FDIC-insured
depository institutions must maintain average daily reserves against their
transaction accounts. No reserves are required to be maintained on the first
$5.0 million of transaction accounts, but reserves equal to 3.0% must be
maintained on the aggregate balances of transaction accounts between $5.0
million and $44.3 million, and reserves equal to 10.0% must be maintained on
aggregate balances in excess of $44.3 million. These percentages are subject to
adjustment by the FRB. Because the Bank's reserves are required to be maintained
in the form of vault cash or in a non-interest-bearing account at a Federal
Reserve Bank, one effect of the reserve requirement is to reduce the amount of
the Bank's interest-earning assets. At December 31, 2000, the Bank met FDIC
reserve requirements.

     Restrictions on Acquisitions. Federal law generally provides that no
"person," acting directly or indirectly or through or in concert with one or
more other persons, may acquire "control," as that term is defined in FDIC
regulations, of a state savings bank without giving at least 60 days written
notice to the FDIC and providing the FDIC an opportunity to disapprove the
proposed acquisition. Pursuant to regulations governing acquisitions of control,
control of an insured institution is conclusively deemed to have been acquired
by, among other things, the acquisition of more than 25% of any class of voting
stock. In addition, control is presumed to have been acquired, subject to
rebuttal, upon the acquisition of more than 10% of any class of voting stock.
Such acquisitions of control may be disapproved if it is determined, among other
things, that (i) the acquisition would substantially lessen competition; (ii)
the financial condition of the acquiring person might jeopardize the financial
stability of the savings bank or prejudice the interests of its depositors; or
(iii) the competency, experience or integrity of the acquiring person or the
proposed management personnel indicates that it would not be in the interest of
the depositors or the public to permit the acquisitions of control by such
person.

     Liquidity. The Bank is subject to the liquidity requirements established by
the Administrator. North Carolina law requires savings banks to maintain cash
and readily marketable investments of not less that 10% of the savings bank's
total assets. The computation of liquidity under North Carolina regulation
allows the inclusion of mortgage-backed securities and investments which, in the
judgment of the Administrator, have a readily marketable value, including
investments with maturities in excess of five years. On December 31, 2000, the
Bank's liquidity ratio, calculated in accordance with North Carolina
regulations, was approximately 12.05%.

     Prompt Corrective Action. Current federal law establishes a system of
prompt corrective action to resolve the problems of undercapitalized
institutions. Under this system, the FDIC has established five capital
categories ("well capitalized," "adequately capitalized," "undercapitalized,"
"significantly undercapitalized," and "critically undercapitalized"). The FDIC
is required to take certain mandatory supervisory actions and is authorized to
take other discretionary actions with respect to institutions in the three
undercapitalized categories. The severity of any action taken will depend upon
the capital category in which an institution is placed. Generally, subject to a
narrow exception, current federal law requires the FDIC to appoint a receiver or
conservator for an institution that is critically undercapitalized.

     Under the FDIC's rules implementing the prompt corrective action
provisions, an insured, state-chartered savings bank that (i) has a Total Risk-
Based Capital Ratio of 10.0% or greater, a Tier 1 Risk-Based Capital Ratio of
6.0% or greater, and a Leverage Ratio of 5.0% or greater, and (ii) is not
subject to any written agreement, order, capital directive, or prompt corrective
action directive issued by the FDIC, is deemed to be "well capitalized." A
savings bank with a Total Risk-Based Capital Ratio of 8.0% or greater, a Tier 1
Risk-Based Capital Ratio of 4.0% or greater, and a Leverage Ratio of 4.0%" or
greater, is considered to be "adequately capitalized." A savings bank that has a
Total Risk-Based Capital Ratio of less than 8.0%, a Tier 1 Risk-Based Capital
Ratio of less than 4.0%, or a Leverage Ratio of less than 4.0%, is considered to
be "undercapitalized." A bank that has a Total Risk-Based Capital Ratio of less
than 6.0%, a Tier 1 Risk-Based Capital Ratio of less than 3.0%, or a Leverage
Ratio of less than 3.0%, is considered to be "significantly undercapitalized,"
and a savings bank that has a ratio of tangible equity capital to assets equal
to or less than 2.0% is deemed to be "critically undercapitalized." For purposes
of these rules, the term "tangible equity" includes core capital elements
counted as Tier 1 Capital for purposes of the risk-based capital standards (see
"-Capital Adequacy"), plus the amount of outstanding cumulative perpetual
preferred stock (including related surplus), minus all intangible assets (with
certain exceptions). A savings bank may be deemed to
<PAGE>

be in a capitalization category lower than indicated by its actual capital
position if it receives an unsatisfactory examination rating.

     A savings bank that is categorized as "undercapitalized," "significantly
undercapitalized," or "critically undercapitalized," is required to submit an
acceptable capital restoration plan to the FDIC. An "undercapitalized" savings
bank also is generally prohibited from increasing its average total assets,
making acquisitions, establishing any branches, or engaging in any new line of
business, except in accordance with an accepted capital restoration plan or with
the approval of the FDIC. In addition, the FDIC is given authority with respect
to any "undercapitalized" savings bank to take any of the actions it is required
to or may take with respect to a "significantly undercapitalized" savings bank
if it determines that those actions are necessary to carry out the purpose of
the law.

     At December 31, 2000, the Bank had the requisite capital levels to qualify
as "well capitalized."

     Interstate Banking. The Bank Holding Company Act, as amended by the
interstate banking provisions of the Riegle-Neal Interstate Banking and
Branching Efficiency Act of 1994 (the "Interstate Banking Law"), permits
adequately capitalized and managed bank holding companies to acquire control of
the assets of banks in any state. Acquisitions are subject to antitrust
provisions that cap at 10% the portion of the total deposits of insured
depository institutions in the United States that a single bank holding company
may control and generally cap at 30% the portion of the total deposits of
insured depository institutions in a state that a single bank holding company
may control. Under certain circumstances, states have the authority to increase
or decrease the 30% cap, and states may set minimum age requirements of up to
five years on target banks within their borders.

     Subject to certain conditions and the states' right to opt out of certain
provisions, the Interstate Banking Law also permits interstate branching by
allowing a bank in one state to merge with a bank located in a different state.
Each state was allowed to accelerate the effective date for interstate mergers
by adopting a law authorizing merger transactions prior to June 1, 1997, or it
could "opt out" and thereby prohibit interstate branching by enacting
legislation to that effect prior to that date. The Interstate Banking Law also
permits banks to establish branches in other states by opening new branches or
acquiring existing branches of other banks, provided the laws of those other
states specifically permit that form of interstate branching. North Carolina has
adopted statutes which, under certain conditions, authorize out-of-state bank
holding companies and banks to acquire or merge with North Carolina banks and to
establish or acquire branches in North Carolina.

     Restrictions on Dividends and Other Capital Distributions. A North
Carolina-chartered stock savings bank may not declare or pay a cash dividend on,
or repurchase any of, its capital stock if the effect of such transaction would
be to reduce the net worth of the institution to an amount which is less than
the minimum amount required by applicable federal and state regulations. In
addition, a North Carolina-chartered stock savings bank, for a period of five
years after its conversion from mutual to stock form, must obtain the written
approval from the Administrator before declaring or paying a cash dividend on
its capital stock in an amount in excess of one-half of the greater of (i) the
institution's net income for the most recent fiscal year end, or (ii) the
average of the institution's net income after dividends for the most recent
fiscal year end and not more than two of the immediately preceding fiscal year
ends, if applicable. Under FDIC regulations, stock repurchases may be made by
the savings bank only upon receipt of FDIC approval.

     Also, without the prior written approval of the Administrator, a North
Carolina-chartered stock savings bank, for a period of five years after its
conversion from mutual to stock form, may not repurchase any of its capital
stock. The Administrator will give approval to repurchase only upon a showing
that the proposed repurchase will not adversely affect the safety and soundness
of the institution.

     In addition, the Bank is not permitted to declare or pay a cash dividend on
or repurchase any of its capital stock if the effect thereof would be to cause
its net worth to be reduced below the amount required for the liquidation
account established in connection with the Bank's conversion from mutual to
stock ownership.
<PAGE>

     The Company paid regular cash dividends totaling $1.91 per share during the
year ended December 31, 2000.

     Other Federal and North Carolina Regulations. The federal banking agencies,
including the FDIC, have developed joint regulations requiring disclosure of
contingent assets and liabilities and, to the extent feasible and practicable,
supplemental disclosure of the estimated fair market value of assets and
liabilities. Additional joint regulations require annual examinations of all
insured depository institutions by the appropriate federal banking agency, with
some exceptions for small, well-capitalized institutions and state-chartered
institutions examined by state regulators, and establish operational and
managerial, asset quality, earnings and stock valuation standards for insured
depository institutions, as well as compensation standards when such
compensation would endanger the insured depository institution or would
constitute an unsafe practice. The Bank does not believe that these regulations
have had or will have a material adverse effect on its current operations.

     The grounds for appointment of a conservator or receiver for a North
Carolina savings bank on the basis of an institution's financial condition
include: (i) insolvency, in that the assets of the savings bank are less than
its liabilities to depositors and others; (ii) substantial dissipation of assets
or earnings through violations of law or unsafe or unsound practices; (iii)
existence of an unsafe or unsound condition to transact business; (iv)
likelihood that the savings bank will be unable to meet the demands of its
depositors or to pay its obligations in the normal course of business; and (v)
insufficient capital or the incurring or likely incurring of losses that will
deplete substantially all of the institution's capital with no reasonable
prospect of replenishment of capital without federal assistance.

     North Carolina law provides a procedure by which savings institutions may
consolidate or merge, subject to approval of the Administrator. The approval is
conditioned upon findings by the Administrator that, among other things, such
merger or consolidation will promote the best interests of the members or
stockholders of the merging institutions. North Carolina law also provides for
simultaneous mergers and conversions and for supervisory mergers conducted by
the Administrator.

     Future Requirements. Statutes and regulations which contain wide-ranging
proposals for altering the structures, regulations and competitive relationships
of financial institutions are introduced regularly. Neither the Company nor the
Bank can predict whether or in what form any proposed statute or regulation will
be adopted or the extent to which the business of the Company and the Bank may
be affected by such statute or regulation.


ITEM 2. DESCRIPTION OF PROPERTIES

     The following table sets forth the location of the Bank's principal office
in Mooresville, North Carolina and its full service branch office in Cornelius
and Huntersville, North Carolina, as well as certain other information relating
to these offices as of December 31, 2000.

<TABLE>
<CAPTION>
                                                                              Owned
                                                                              -----
                                                    Net Book Value              or                   Deposits
                                                    --------------              --                  ---------
                    Address                          of Property              leased              (In Thousands)
                    -------                          -----------              ------              -------------
<S>                                                 <C>                       <C>                 <C>
Mooresville:                                                 $207,000                 Owned                 $ 89,118
------------                                                 --------                 -----                 --------
347 North Main Street
---------------------
Mooresville, North Carolina 28115
---------------------------------
Cornelius:                                                   $276,000                 Owned                 $  8,871
----------                                                   --------                 -----                 --------
20209 Highway 73 West
---------------------
Cornelius, North Carolina 28031
-------------------------------
Huntersville:                                                $181,000                 Owned                 $  6,380
-------------                                                --------                                       --------
401 Gilead Road
---------------
Huntersville, North Carolina 28078
----------------------------------
</TABLE>
<PAGE>

                                                $664,000           $104,369
                                                ========           ========


     In addition, the Bank owns a 1.24 acre lot located at Highway 150 West, 239
West Plaza Drive, Mooresville, North Carolina, purchased in 1988 for future
expansion purposes. The net book value of this property at December 31, 2000 was
$65,000. The total net book value of the Bank's furniture, fixtures and
equipment on December 31, 2000 was $330,000. The properties are considered by
the Bank's management to be in good condition and adequately covered by
insurance.

     See Note 4 to the "Notes To Consolidated Financial Statements" to the 2000
Annual Report.

ITEM 3.   LEGAL PROCEEDINGS

     In the opinion of management, neither the Company nor the Bank is involved
in any pending legal proceedings other than routine, non-material proceedings
occurring in the ordinary course of business.

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     No matter was submitted to a vote of the Company's stockholders during the
quarter ended December 31, 2000.


                                    PART II

ITEM 5.   MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     See the information under the section captioned "Common Stock Information"
on page 55 in the Company's 2000 Annual Report, which section is incorporated
herein by reference. See "Item 1. BUSINESS-Regulation of the Company --
Repurchase Limitations, and -- Regulation of the Bank--Restrictions on Dividends
and Other Capital Distributions" above for regulatory restrictions which limit
the ability of the Company to pay dividends to its shareholders and the Bank to
pay dividends to the Company.

ITEM 6.   SELECTED FINANCIAL DATA

     The information required by this Item is set forth in the table captioned
"Selected Consolidated Financial Data" on pages 2 and 3 of the Company's 2000
Annual Report which is incorporated herein by reference.

ITEM 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATION

     See the information set forth under Item 1 above and the information set
forth under the section captioned "Management's Discussion and Analysis of
Financial Condition and Operating Results" on pages 4 through 6 in the Company's
2000 Annual Report, which section is incorporated herein by reference.

ITEM 7A   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     Pages 6 through 8 of the Company's 2000 Annual Report are herein
incorporated by reference.
<PAGE>

ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The consolidated financial statements of the Company and supplementary data
set forth on pages 18 through 53 of the Company's 2000 Annual Report are
incorporated herein by reference.

ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
          FINANCIAL DISCLOSURE

     N/A.
                                   PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     The information required by this Item regarding directors and executive
officers of the Company is set forth under the sections captioned "Proposal 1 -
Election of Directors - Nominees" on pages 6 and 7 of the Proxy Statement of the
2001 Annual Meeting of Stockholders (the "Proxy Statement") and "Proposal 1 -
Election of Directors - Executive Officers" on pages 10 and 11 of the Proxy
Statement, which sections are incorporated herein by reference.

     The information required by this Item regarding compliance with Section
16(a) of the Securities Exchange Act of 1934 is set forth under the section
captioned "Section 16(a) Beneficial Ownership Reporting Compliance" set forth on
page 6 of the Proxy Statement, which is incorporated herein by reference.

ITEM 11.  EXECUTIVE COMPENSATION

     The information required by this Item is set forth under the sections
captioned "Proposal 1 - Election of Directors - Directors' Compensation" on
pages 9 and 10 and " - Executive Compensation" on pages 11 through 19 of the
Proxy Statement, which sections are incorporated herein by reference.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The information required by this Item is incorporated by reference from the
section captioned "Security Ownership of Certain Beneficial Owners" on pages 3
through 6 of the Proxy Statement.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     See the section captioned "Proposal 1 - Election of Directors - Certain
Indebtedness and Transactions of Management" on page 21 of the Proxy Statement,
which section is incorporated herein by reference.  Also, see Note 13 to the
"Notes of Consolidated Financial Statements" of the 2000 Annual Report.

                                    PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

14(a)1.   Consolidated Financial Statements (contained in the Company's 2000
          Annual Report which is attached hereto as Exhibit (13) and
          incorporated herein by reference) including the following:

          (a)  Independent Auditors' Report;

          (b)  Consolidated Statements of Financial Condition as of December 31,
               2000 and 1999;
<PAGE>

          (c)  Consolidated Statements of Income and Comprehensive Income for
               the Years Ended December 31, 2000, 1999 and 1998;

          (d)  Consolidated Statements of Cash Flows for the Years Ended
               December 31, 2000, 1999 and 1998;

          (e)  Consolidated Statements of Stockholder's Equity for the Years
               Ended December 31, 2000, 1999 and 1998;

          (f)  Notes to Consolidated Financial Statements.

14(a)2.   Consolidated Financial Statement Schedules

          All schedules have been omitted as the required information is either
          inapplicable or included in the Notes to Consolidated Financial
          Statements.

14(a)3.   Exhibits

          Exhibit (3)(i)      Certificate of Incorporation, incorporated herein
                              by reference to Exhibit (3)(i) to the Registration
                              Statement on Form S-1, Registration No. 333-35497,
                              dated September 12, 1997, and amended on November
                              5 and 10, 1997.

          Exhibit (3)(ii)     Bylaws, incorporated herein by reference to
                              Exhibit (3)(ii) to the Registration Statement on
                              Form S-1, Registration No. 333-35497, dated
                              September 12, 1997, and amended on November 5 and
                              10, 1997.

          Exhibit (4)         Specimen Stock Certificate, incorporated herein by
                              reference to Exhibit (4) to the Registration
                              Statement on Form S-1, Registration No. 333-35497,
                              dated September 12, 1997, and amended on November
                              5 and 10, 1997.

          Exhibit (10)(a)     Employment Agreement between Mooresville Savings
                              Bank, Inc., S.S.B. and George W. Brawley, Jr.
                              dated December 30, 1997, as amended on December
                              15, 1998, incorporated herein by reference to
                              Exhibit 10 (a) to the Company's Form 10-K for the
                              year ended December 31, 1998.

          Exhibit (10)(b)     Employment Agreement between Mooresville Savings
                              Bank, Inc., S.S.B. and Dale W. Brawley dated
                              December 30, 1997, as amended on December 15,
                              1998, incorporated herein by reference to Exhibit
                              10 (b) to the Company's Form 10-K for the year
                              ended December 31, 1998.

          Exhibit (10)(c)     Employment Agreement between Mooresville Savings
                              Bank, Inc., S.S.B. and Billy R. Williams dated
                              December 30, 1997, as amended on December 15,
                              1998, incorporated herein by reference to Exhibit
                              10 (c) to the Company's Form 10-K for the year
                              ended December 31, 1998.

          Exhibit (10)(d)     Employee Stock Ownership Plan and Trust of
                              Mooresville Savings Bank, Inc., S.S.B.,
                              incorporated by reference to Exhibit 10(d) to the
                              Company's Form 10-K for the year ended December
                              31, 1997.
<PAGE>

          Exhibit (10)(e)     Mooresville Savings Bank, Inc., S.S.B. Severance
                              Plan, incorporated herein by reference to Exhibit
                              10(f) to the Registration Statement on Form S-1,
                              Registration No. 333-35497, dated September 12,
                              1997, and as amended on November 5 and 10, 1997.

          Exhibit (10)(f)     Capital Maintenance Agreement between Coddle Creek
                              Financial Corp. and Mooresville Savings Bank,
                              Inc., S.S.B., incorporated by reference to Exhibit
                              10(f) to the Company's Form 10-K for the year
                              ended December 31, 1997.

          Exhibit (10)(g)     Management Recognition Plan of Mooresville Savings
                              Bank, Inc., S.S.B., incorporated herein by
                              reference to Exhibit 10(g) to the Company's Form
                              10-K for the year ended December 31, 1998.

          Exhibit (10)(h)     Stock Option Plan of Coddle Creek Financial Corp.,
                              incorporated herein by reference to Exhibit 10(h)
                              to the Company's Form 10-K for the year ended
                              December 31, 1998.

          Exhibit (10)(i)     (i) Amended and Restated Retirement Payment
                              Agreements between Mooresville Savings Bank, Inc.,
                              S.S.B. and each of Donald R. Belk, George W.
                              Brawley and Claude U. Voils, Jr. dated September
                              3, 1979, as amended and restated September 8, 1997
                              and as amended on December 16, 1998, incorporated
                              herein by reference to Exhibit 10(i)(i) to the
                              Company's Form 10-K for the year ended December
                              31, 1998.

                              (ii) Retirement Payment Agreement between
                              Mooresville Savings Bank, Inc., S.S.B. and Calvin
                              E. Tyner dated September 3, 1979, as amended on
                              September 8, 1997, incorporated herein by
                              reference to Exhibit 10(i)(ii) to the Company's
                              Form 10-K for the year ended December 31, 1998.

                              (iii) Amended and Restated Director's Deferred
                              Compensation Agreements between Mooresville
                              Savings Bank, Inc., S.S.B. and each of Donald R.
                              Belk, George W. Brawley, Jr., and Claude U. Voils,
                              Jr. dated January 1, 1985, as amended and restated
                              on March 31, 1988 and September 8, 1997 and as
                              amended for Messrs. Belk, Brawley, and Voils on
                              December 16, 1998, incorporated herein by
                              reference to Exhibit 10(i)(iii) to the Company's
                              Form 10-K for the year ended December 31, 1998.

                              (iv) Amended and Restated Director's Deferred
                              Compensation Agreements between Mooresville
                              Savings Bank, Inc., S.S.B. and each of Donald R.
                              Belk, George W. Brawley, Jr.., Calvin E. Tyner,
                              and Claude U. Voils, Jr. dated December 1, 1985,
                              as amended and restated on September 8, 1997 and
                              as amended for Messrs. Belk, Brawley and Voils on
                              December 16, 1998, incorporated herein by
                              reference to Exhibit 10(i)(iv) to the Company's
                              Form 10-K for the year ended December 31, 1998.

                              (v) Amended and Restated Retirement Plan
                              Agreements between Mooresville Savings Bank, Inc.,
                              S.S.B. and each of George W. Brawley, Jr., Donald
                              R. Belk, Claude U. Voils, Jr. and Calvin E. Tyner
                              dated November 1, 1993, as amended and restated on
                              September 15, 1997, and as amended for Messrs.
                              Brawley, Belk, and Voils on
<PAGE>

                              December 16, 1998, incorporated herein by
                              reference to Exhibit 10(i)(v) to the Company's
                              Form 10-K for the year ended December 31, 1998.

                              (vi) Amended and Restated Retirement Payment
                              Agreements between Mooresville Savings Bank,
                              S.S.B. and George W. Brawley, Jr. dated December
                              1, 1990, as amended and restated on September 8,
                              1997 and as amended on December 16, 1998,
                              incorporated herein by reference to Exhibit
                              10(i)(vi) to the Company's Form 10-K for the year
                              ended December 31, 1998.

                              (vii) Amended and Restated Retirement Payment
                              Agreement between Mooresville Savings Bank, S.S.B.
                              and Dale W. Brawley dated November 1, 1990,
                              amended and restated on October 21, 1993, as
                              amended and restated on September 8, 1997,
                              incorporated herein by reference to Exhibit
                              10(i)(vii) to the Company's Form 10-K for the year
                              ended December 31, 1998.

                              (viii) Amended and Restated Retirement Payment
                              Agreements between (a) Mooresville Savings Bank,
                              Inc., S.S.B. and each of Donald R. Belk, George W.
                              Brawley, Jr., and Claude U. Voils, Jr. dated March
                              1, 1993, as amended and restated on September 8,
                              1997 and as amended for each of them on December
                              16, 1998 and (b) Mooresville Savings Bank, Inc.,
                              S.S.B. and Dale W. Brawley dated February 11,
                              1993, as amended and restated on October 21, 1993
                              and September 8, 1997, incorporated herein by
                              reference to Exhibit 10(i)(viii) to the Company's
                              Form 10-K for the year ended December 31, 1998.

                              (ix) Amended and Restated Retirement Payment
                              Agreements between Mooresville Savings Bank, Inc.,
                              S.S.B. and each of Dale W. Brawley and George W.
                              Brawley, Jr. dated August 1, 1993, amended and
                              restated on October 23, 1993 for Dale W. Brawley,
                              as amended and restated on September 8, 1997, and
                              as amended for George W. Brawley on December 16,
                              1998, incorporated herein by reference to Exhibit
                              10(i)(ix) to the Company's Form 10-K for the year
                              ended December 31, 1998.

                              (x) Amended and Restated Retirement Payment
                              Agreement between Mooresville Savings Bank, Inc.,
                              S.S.B. and Jack G. Lawler dated June 1, 1994, as
                              amended and restated on September 8, 1997,
                              incorporated herein by reference to Exhibit
                              10(i)(x) to the Company's Form 10-K for the year
                              ended December 31, 1998.

                              (xi) Amended and Restated Salary Continuation
                              Agreements between Mooresville Savings Bank, Inc.,
                              S.S.B. and each of Dale W. Brawley, George W.
                              Brawley, Jr., Patricia B. Clontz, and Richard E.
                              Woods dated September 1, 1984, as amended and
                              restated on September 17, 1997, and as amended for
                              George W. Brawley on December 16, 1998,
                              incorporated herein by reference to Exhibit
                              10(i)(x) to the Company's Form 10-K for the year
                              ended December 31, 1998.

                              (xii) Amended and Restated Supplemental Income
                              Agreements between Mooresville Savings Bank, Inc.,
                              S.S.B. and each of Dale W.
<PAGE>

                              Brawley, George W. Brawley, Jr., Billy R.
                              Williams, Donald G. Jones and Richard E. Woods
                              dated November 1, 1993, as amended and restated on
                              September 17, 1997, and as amended for George W.
                              Brawley on December 16, 1998, incorporated herein
                              by reference to Exhibit 10(i)(xii) to the
                              Company's Form 10-K for the year ended December
                              31, 1998.

                              (xiii) Amended and Restated Salary Continuation
                              Agreements between Mooresville Savings Bank,
                              S.S.B. and each of Lucille Doster, Marie Hedrick,
                              Carol Huffman, Brenda Johnson, D. Glenn Jones, and
                              Nancy Lee Petrea dated February 1, 1988, as
                              amended and restated on September 17, 1997,
                              incorporated herein by reference to Exhibit
                              10(i)(xiii) to the Company's Form 10-K for the
                              year ended December 31, 1998.

          Exhibit (10)(j)     Mooresville Savings Bank, Inc., S.S.B. Non-
                              Qualified Excess Savings Plan, incorporated herein
                              by reference to Exhibit 10(i) to the Registration
                              Statement on Form S-1, Registration No. 333-35497,
                              dated September 12, 1997, as amended on November 5
                              and 10, 1997.

          Exhibit (11)        Statement regarding computation of per share
                              earnings.

          Exhibit (12)        Statement regarding computation of ratios.

          Exhibit (13)        2000 Annual Report to Security Holders.

          Exhibit (21)        See Item 1. "Business" for discussion of
                              subsidiaries.

          Exhibit (23)        Consent of Independent Certified Public
                              Accountants.

14(b)     The Company filed no reports on Form 8-K during the last quarter of
          the fiscal year ended December 31, 2000.
<PAGE>

                                  SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.


                                           CODDLE CREEK FINANCIAL CORP.


Date:  March 23, 2001                By:  /s/ George W. Brawley, Jr.
                                          --------------------------
                                          George W. Brawley, Jr.
                                          President and Chief Executive Officer


     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated:

<TABLE>
<CAPTION>
Signature                                    Title                        Date
---------                                    -----                        ----
<S>                                <C>                               <C>
/s/ George W. Brawley, Jr.         President, Chief Executive        March 23, 2001
------------------------
George W. Brawley, Jr.             Officer and Director

/s/ Dale W. Brawley                Executive Vice President,         March 23, 2001
------------------------
Dale W. Brawley                    Treasurer and Director

/s/ Billy R. Williams              Chief Financial Officer,          March 23, 2001
------------------------
Billy R. Williams                  Chief Accounting Officer,
                                   Controller and Secretary

/s/ Donald R. Belk                 Director                          March 23, 2001
------------------------
Donald R. Belk

/s/ Jack G. Lawler                 Director                          March 23, 2001
------------------------
Jack G. Lawler

/s/ Claude U. Voils, Jr.           Director                          March 23, 2001
------------------------
Claude U. Voils, Jr.

/s/ Don E. Mills, Jr.              Director                          March 23, 2001
------------------------
Don E. Mills, Jr.
</TABLE>
<PAGE>

                               INDEX TO EXHIBITS


Exhibit No.              Description
------------------------------------

Exhibit (11)   Statement regarding computation of per share earnings.

Exhibit (12)   Statement regarding computation of ratios.

Exhibit (13)   2000 Annual Report to Security Holders.

Exhibit (23)   Consent of Independent Certified Public Accountants.