<TABLE>
<CAPTION>
                                                                                EXHIBIT 13.1
                                                                                ------------


                NORTH GEORGIA COMMUNITY FINANCIAL PARTNERS, INC.
                                 AND SUBSIDIARY

                          CONSOLIDATED FINANCIAL REPORT
                                DECEMBER 31, 2003


                                TABLE OF CONTENTS
                                -----------------


                                                                   PAGE
                                                                  -------

INDEPENDENT AUDITOR'S REPORT. . . . . . . . . . . . . . . . . . . .     1

FINANCIAL STATEMENTS

     CONSOLIDATED BALANCE SHEETS. . . . . . . . . . . . . . . . . .     2
     CONSOLIDATED STATEMENTS OF INCOME. . . . . . . . . . . . . . .     3
     CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME. . . . . . . .     4
     CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY. . . . . . . .     5
     CONSOLIDATED STATEMENTS OF CASH FLOWS. . . . . . . . . . . . .     6
     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS . . . . . . . . . .  7-22


<PAGE>
                          INDEPENDENT AUDITOR'S REPORT


TO THE BOARD OF DIRECTORS
NORTH GEORGIA COMMUNITY FINANCIAL PARTNERS, INC.
CALHOUN, GEORGIA


          We  have audited the accompanying consolidated balance sheets of NORTH
GEORGIA  COMMUNITY  FINANCIAL  PARTNERS,  INC. AND SUBSIDIARY as of December 31,
2003  and 2002, and the related consolidated statements of income, comprehensive
income,  stockholders'  equity  and  cash flows for the years then ended.  These
financial  statements  are  the responsibility of the Company's management.  Our
responsibility  is  to express an opinion on these financial statements based on
our  audits.


          We  conducted  our  audits  in  accordance  with  auditing  standards
generally  accepted  in  the  United States of America.  Those standards require
that  we plan and perform the audit to obtain reasonable assurance about whether
the  financial  statements are free of material misstatement.  An audit includes
examining,  on  a test basis, evidence supporting the amounts and disclosures in
the  financial  statements.  An  audit  also  includes  assessing the accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating  the  overall  financial statement presentation.  We believe that our
audits  provide  a  reasonable  basis  for  our  opinion.


          In  our  opinion,  the  consolidated  financial statements referred to
above  present fairly, in all material respects, the financial position of North
Georgia  Community  Financial  Partners,  Inc. and subsidiary as of December 31,
2003  and 2002, and the results of their operations and their cash flows for the
years then ended, in conformity with accounting principles generally accepted in
the  United  States  of  America.

                                        /s/  MAULDIN  &  JENKINS,  LLC




Atlanta, Georgia
January 8, 2004


                                        1
<PAGE>
                      NORTH GEORGIA COMMUNITY FINANCIAL PARTNERS, INC.
                                       AND SUBSIDIARY
                                 CONSOLIDATED BALANCE SHEETS
                                 DECEMBER 31, 2003 AND 2002


                                 ASSETS                              2003           2002
                                 ------                          -------------  ------------
<S>                                                              <C>            <C>

Cash and due from banks                                          $  2,835,258   $ 2,018,636
Interest-bearing deposits in banks                                     22,653        87,688
Federal funds sold                                                          -     1,500,000
Securities available-for-sale                                      24,325,575    22,964,367
Restricted equity securities, at cost                                 832,875       621,425

Loans, net of unearned income                                      71,639,749    50,899,257
Less allowance for loan losses                                        873,650       675,246
                                                                 -------------  ------------
          Loans, net                                               70,766,099    50,224,011

Premises and equipment, net                                         2,412,304     1,917,066
Other assets                                                        2,155,570     1,580,095
                                                                 -------------  ------------

          TOTAL ASSETS                                           $103,350,334   $80,913,288
                                                                 =============  ============

                    LIABILITIES AND STOCKHOLDERS' EQUITY
                    ------------------------------------

Deposits
    Noninterest-bearing                                          $  6,203,941   $ 4,331,034
    Interest-bearing                                               81,368,328    61,718,894
                                                                 -------------  ------------
         Total deposits                                            87,572,269    66,049,928
    Other borrowings                                                5,000,000     2,000,000
    Securities sold under repurchase agreements                     1,273,544     4,230,135
    Other liabilities                                                 404,246       216,880
                                                                 -------------  ------------
         TOTAL LIABILITIES                                         94,250,059    72,496,943
                                                                 -------------  ------------

Commitments and contingencies

Stockholders' equity
    Preferred stock, no par value; 2,000,000 shares authorized;
        none issued and outstanding
    Common stock, no par value; 10,000,000 shares authorized;
         912,167 issued and outstanding                             9,417,401     9,417,401
    Accumulated deficit                                              (354,271)   (1,488,060)
    Accumulated other comprehensive income                             37,145       487,004
                                                                 -------------  ------------
          TOTAL STOCKHOLDERS' EQUITY                                9,100,275     8,416,345
                                                                 -------------  ------------

          TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY             $103,350,334   $80,913,288
                                                                 =============  ============
<FN>

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
</TABLE>


                                        2
<PAGE>
<TABLE>
<CAPTION>
                   NORTH GEORGIA COMMUNITY FINANCIAL PARTNERS, INC.
                                    AND SUBSIDIARY
                           CONSOLIDATED STATEMENTS OF INCOME
                        YEARS ENDED DECEMBER 31, 2003 AND 2002


                                                                     2003          2002
                                                                -------------  -------------
<S>                                                             <C>            <C>

INTEREST INCOME
    Loans, including fees                                          3,881,060      3,112,609
    Taxable securities                                               772,396      1,240,373
    Federal funds sold                                                20,567         34,511
    Interest-bearing deposits at other financial institutions          3,330            255
                                                                -------------  -------------
          TOTAL INTEREST INCOME                                    4,677,353      4,387,748
                                                                -------------  -------------

INTEREST EXPENSE
    Deposits                                                       1,568,536      1,607,288
    Other borrowings                                                  68,246          8,012
    Securities sold under repurchase agreements                       42,869         83,729
                                                                -------------  -------------
          TOTAL INTEREST EXPENSE                                   1,679,651      1,699,029
                                                                -------------  -------------

          NET INTEREST INCOME                                      2,997,702      2,688,719
PROVISION FOR LOAN LOSSES                                            255,000        153,000
                                                                -------------  -------------
          NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES      2,742,702      2,535,719
                                                                -------------  -------------

OTHER INCOME
    Service charges on deposit accounts                              369,340        278,410
    Security gains (losses), net                                     255,954              -
    Other operating income                                           296,965        229,828
                                                                -------------  -------------
          TOTAL OTHER INCOME                                         922,259        508,238
                                                                -------------  -------------

OTHER EXPENSES
    Salaries and employee benefits                                 1,509,738      1,221,762
    Occupancy and equipment expenses                                 369,780        335,885
    Capitalized loan origination costs                              (203,221)      (167,708)
    Other operating expenses                                       1,069,458        928,956
                                                                -------------  -------------
          TOTAL OTHER EXPENSES                                     2,745,755      2,318,895
                                                                -------------  -------------

          INCOME  BEFORE INCOME TAXES                                919,206        725,062

INCOME TAX (BENEFITS)                                               (214,583)             -
                                                                -------------  -------------

                    NET INCOME                                     1,133,789        725,062
                                                                =============  =============

BASIC EARNINGS PER SHARE                                                1.24           0.79
                                                                =============  =============

DILUTED EARNINGS PER SHARE                                              1.20           0.78
                                                                =============  =============
<FN>

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
</TABLE>


                                        3
<PAGE>
<TABLE>
<CAPTION>
                         NORTH GEORGIA COMMUNITY FINANCIAL PARTNERS, INC.
                                          AND SUBSIDIARY
                          CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                              YEARS ENDED DECEMBER 31, 2003 AND 2002


                                                                              2003         2002
                                                                           -----------  ----------
<S>                                                                        <C>          <C>

NET INCOME                                                                 $1,133,789   $  725,062
                                                                           -----------  ----------

OTHER COMPREHENSIVE INCOME (LOSS):

        Net unrealized holding gains (losses) arising during the period
            net of tax (benefits) of $(120,028) in 2003 and $- - in 2002     (291,168)     538,723

        Reclassifications adjustment for gains realized
            in net income, net of taxes of $97,263                           (158,691)           -
                                                                           -----------  ----------

OTHER COMPREHENSIVE INCOME (LOSS)                                            (449,859)     538,723
                                                                           -----------  ----------

COMPREHENSIVE INCOME                                                       $  683,930   $1,263,785
                                                                           ===========  ==========
<FN>

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
</TABLE>


                                        4
<PAGE>
<TABLE>
<CAPTION>

                          NORTH GEORGIA COMMUNITY FINANCIAL PARTNERS, INC.
                                           AND SUBSIDIARY
                           CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                               YEARS ENDED DECEMBER 31, 2003 AND 2002


                                    COMMON STOCK                          ACCUMULATED
                                ---------------------                        OTHER         TOTAL
                                           AMOUNT        ACCUMULATED     COMPREHENSIVE  STOCKHOLDERS'
                                SHARES     PAID-IN         DEFICIT       INCOME (LOSS)     EQUITY
                                -------  ------------  ---------------  ---------------  -----------
<S>                             <C>      <C>           <C>              <C>              <C>

BALANCE, DECEMBER 31, 2001      911,167  $  9,405,401  $   (2,213,122)  $      (51,719)  $7,140,560
    Net income                        -             -         725,062                -      725,062
    Issuance of common stock      1,000        12,000               -                -       12,000
    Other comprehensive income        -             -               -          538,723      538,723
                                -------  ------------  ---------------  ---------------  -----------
BALANCE, DECEMBER 31, 2002      912,167     9,417,401      (1,488,060)         487,004    8,416,345
    Net income                        -             -       1,133,789                -    1,133,789
    Other comprehensive income        -             -               -         (449,859)    (449,859)
                                -------  ------------  ---------------  ---------------  -----------
BALANCE, DECEMBER 31, 2003      912,167  $  9,417,401  $     (354,271)  $       37,145   $9,100,275
                                =======  ============  ===============  ===============  ===========
<FN>

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
</TABLE>


                                        5
<PAGE>
<TABLE>
<CAPTION>
                      NORTH GEORGIA COMMUNITY FINANCIAL PARTNERS, INC.
                                       AND SUBSIDIARY
                            CONSOLIDATED STATEMENTS OF CASH FLOWS
                           YEARS ENDED DECEMBER 31, 2003 AND 2002


                                                                   2003           2002
                                                               -------------  -------------
<S>                                                            <C>            <C>
OPERATING ACTIVITIES
    Net income                                                 $  1,133,789   $    725,062
    Adjustments to reconcile net income to net cash
        provided by operating activities:
          Depreciation                                              227,474        217,789
          Provision for loan losses                                 255,000        153,000
          Gain on sales of securities                              (255,954)             -
          (Increase) decrease in interest receivable                (12,786)         1,073
          Increase (decrease) in interest payable                    57,082        (25,026)
                                                               -------------  -------------
          Net other operating activities                           (160,780)        12,079

              Net cash provided by operating activities           1,243,825      1,083,977
                                                               -------------  -------------

INVESTING ACTIVITIES
    Net (increase) decrease in interest-bearing deposits in
         other financial institutions                                65,035        (85,488)
    Purchases of securities available-for-sale                  (27,153,960)   (17,765,983)
    Proceeds from maturities of securities available-for-sale    17,153,638     20,567,238
    Proceeds from sales of securities available-for-sale          8,445,209              -
    Purchases of restricted equity securities                      (211,450)      (330,725)
    Net (increase) decrease  in federal funds sold                1,500,000     (1,500,000)
    Net increase in loans                                       (21,068,713)   (10,290,158)
    Purchase of premises and equipment                             (722,712)       (93,067)
                                                               -------------  -------------

            Net cash used in investing activities               (21,992,953)    (9,498,183)
                                                               -------------  -------------

FINANCING ACTIVITIES
    Net increase in deposits                                     21,522,341      2,803,641
    Net increase in other borrowings                              3,000,000      2,000,000
    Net increase (decrease) in securities sold under
         repurchase agreements                                   (2,956,591)     4,074,213
    Net proceeds from sale of common stock                                -         12,000
                                                               -------------  -------------

            Net cash provided by financing activities            21,565,750      8,889,854
                                                               -------------  -------------

Net increase in cash and due from banks                             816,622        475,648

Cash and due from banks at beginning  of year                     2,018,636      1,542,988
                                                               -------------  -------------

Cash and due from banks at end of year                         $  2,835,258   $  2,018,636
                                                               =============  =============

SUPPLEMENTAL DISCLOSURE
    Cash paid for interest                                     $  1,622,569   $  1,724,055

NONCASH TRANSACTIONS
    Other real estate acquired in settlement of loans          $    271,625   $          -
<FN>

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
</TABLE>


                                        6
<PAGE>
                NORTH GEORGIA COMMUNITY FINANCIAL PARTNERS, INC.
                                 AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

          NATURE  OF  OPERATIONS

            North  Georgia Community Financial Partners, Inc. (the "Company") is
            a bank holding company whose principal activity is the ownership and
            management  of  its  wholly-owned subsidiary, North Georgia National
            Bank (the "Bank"). The Bank is a commercial bank located in Calhoun,
            Gordon  County,  Georgia.  The Bank provides a full range of banking
            services to individual and corporate customers in its primary market
            area  of  Gordon  County  and  surrounding  counties.

          BASIS OF PRESENTATION AND ACCOUNTING ESTIMATES

            The  consolidated  financial  statements include the accounts of the
            Company  and  its  subsidiary. Significant intercompany transactions
            and  balances  have  been  eliminated  in  consolidation.

            In  preparing  the  consolidated  financial statements in accordance
            with  accounting  principles generally accepted in the United States
            of America, management is required to make estimates and assumptions
            that  affect  the reported amounts of assets and liabilities and the
            disclosure  of  contingent  assets and liabilities as of the balance
            sheet  date and the reported amounts of revenues and expenses during
            the  reporting  period.  Actual  results  could  differ  from  those
            estimates.

            Material  estimates that are particularly susceptible to significant
            change relate to the determination of the allowance for loan losses,
            the  valuation  of foreclosed real estate, and contingent assets and
            liabilities.  The determination of the adequacy of the allowance for
            loan  losses  is  based  on  estimates  that  are  susceptible  to
            significant  changes  in  the  economic  environment  and  market
            conditions.  In  connection  with the determination of the estimated
            losses  on  loans  and  the  valuation  of  foreclosed  real estate,
            management  obtains  independent  appraisals  for  significant
            collateral.

          CASH, DUE FROM BANKS AND CASH FLOWS

            For  purposes  of  reporting  cash  flows,  cash  and due from banks
            include  cash  on  hand,  cash  items  in  process of collection and
            amounts  due  from  banks.  Cash  flows from loans, interest-bearing
            deposits  in banks, federal funds sold, deposits and securities sold
            under  repurchase  agreements  are  reported  net.

            The  Bank  is  required  to  maintain reserve balances in cash or on
            deposit  with  the  Federal  Reserve  Bank, based on a percentage of
            deposits.  The  total  of  those  reserve balances was approximately
            $314,000  at  December  31,  2003.

          SECURITIES

            The  amortization  of  premiums  and  accretion  of  discounts  are
            recognized  in  interest  income  using the interest method over the
            life  of  the  securities.  Securities  not  classified  as
            held-to-maturity,  including  equity  securities  with  readily
            determinable  fair  values, are classified as available-for-sale and
            recorded  at  fair  value  with unrealized gains and losses excluded
            from  earnings  and  reported  in  accumulated  other  comprehensive
            income,  net of the related tax effect. Equity securities, including
            restricted  equity  securities,  without a readily determinable fair
            value  are  classified  as  available-for-sale and recorded at cost.

            Realized  gains  and  losses, determined on the basis of the cost of
            specific securities sold, are included in earnings on the settlement
            date.  Declines  in  the  fair  value  of  held-to-maturity  and
            available-for-sale securities below their cost that are deemed to be
            other  than  temporary are reflected in earnings as realized losses.


                                        7
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

          LOANS

            Loans  are reported at their outstanding principal balances less the
            allowance  for  loan losses. Interest income is accrued based on the
            outstanding principal balance. Loan origination fees, net of certain
            direct  loan  origination  costs,  are deferred and recognized as an
            adjustment  to  yield  over  the life of the loan using the interest
            method  which  approximates a level yield. The origination costs for
            loans  are  reflected  as  a  reduction  of  other  expenses  in the
            statement  of  income.

            The  accrual  of  interest  on  loans  is  discontinued  when,  in
            management's opinion, the borrower may be unable to meet payments as
            they  become  due,  unless  the  loan  is well-secured. All interest
            accrued but not collected for loans that are placed on nonaccrual or
            charged  off  is  reversed against interest income unless management
            believes  that  the  accrued  interest  is  recoverable  through the
            liquidation  of  collateral.  Interest income on nonaccrual loans is
            recognized  on  the  cash-basis  or  cost-recovery method, until the
            loans  are returned to accrual status. Loans are returned to accrual
            status  when  all  the  principal  and  interest amounts are brought
            current  and  future  payments  are  reasonable  assured.

            A  loan is considered impaired when it is probable, based on current
            information  and  events,  the Company will be unable to collect all
            principal  and  interest  payments  due  in  accordance  with  the
            contractual terms of the loan agreement. Impaired loans are measured
            by either the present value of expected future cash flows discounted
            at  the loan's effective interest rate, the loan's obtainable market
            price, or the fair value of the collateral if the loan is collateral
            dependent.  The  amount  of  impairment,  if any, and any subsequent
            changes  are  included in the allowance for loan losses. Interest on
            accruing  impaired  loans is recognized as long as such loans do not
            meet  the  criteria  for  nonaccrual  status.

          ALLOWANCE  FOR  LOAN  LOSSES

            The allowance for loan losses is established through a provision for
            loan  losses charged to expense. Loan losses are charged against the
            allowance  when  management  believes  the  collectibility  of  the
            principal  is  unlikely. Subsequent recoveries, if any, are credited
            to  the  allowance.

            The allowance is an amount that management believes will be adequate
            to  absorb  estimated  losses  relating  to  specifically identified
            loans,  as well as probable credit losses inherent in the balance of
            the  loan portfolio, based on an evaluation of the collectibility of
            existing loans and prior loss experience. This evaluation also takes
            into  consideration such factors as changes in the nature and volume
            of  the  loan  portfolio,  overall  portfolio  quality,  reviews  of
            specific  problem  loans,  concentrations  and  current  economic
            conditions  that  may  affect  the  borrower's  ability to pay. This
            evaluation  does  not  include  the  effects  of  expected losses on
            specific  loans or groups of loans that are related to future events
            or  expected  changes  in economic conditions. While management uses
            the  best  information  available  to  make  its  evaluation, future
            adjustments  to  the  allowance  may  be  necessary  if  there  are
            significant  changes in economic conditions. In addition, regulatory
            agencies,  as  an  integral  part  of  their  examination  process,
            periodically  review  the  Bank's allowance for loan losses, and may
            require  the  Bank to make additions to the allowance based on their
            judgment  about  information  available to them at the time of their
            examinations.  The  allowance  consists  of  specific,  general  and
            unallocated components. The specific component relates to loans that
            are  classified  as either doubtful, substandard or special mention.
            For such loans that are also classified as impaired, an allowance is
            established  when  the discounted cash flows (or collateral value or
            observable  market  price)  of  the  impaired loan is lower than the
            carrying  value  of  that  loan.  The  general  component  covers
            non-classified  loans  and  is  based  on historical loss experience
            adjusted  for  qualitative  factors.  An  unallocated  component  is
            maintained  to  cover  uncertainties  that could affect management's
            estimate  of  probable  losses.  The  unallocated  component  of the
            allowance  reflects  the  margin  of  imprecision  inherent  in  the
            underlying  assumptions  used  in  the  methodologies for estimating
            specific  and  general  losses  in  the  portfolio.


                                        8
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

          PREMISES AND EQUIPMENT

            Land  is carried at cost. Premises and equipment are carried at cost
            less  accumulated depreciation. Depreciation is computed principally
            by  the  straight-line method over the estimated useful lives of the
            assets.

          OTHER REAL ESTATE OWNED

            Other real estate owned represents properties acquired through or in
            lieu  of loan foreclosure and are initially recorded at the lower of
            cost  or  fair value less estimated costs to sell. Any write-down to
            fair  value  at  the  time of transfer to other real estate owned is
            charged  to the allowance for loan losses. Costs of improvements are
            capitalized,  whereas  costs  relating  to holding other real estate
            owned  and  subsequent  declines  in  the  value  are  expensed. The
            carrying  amount of other real estate owned at December 31, 2003 was
            $271,625. The Company had no other real estate owned at December 31,
            2002.

          SECURITIES SOLD UNDER REPURCHASE AGREEMENTS AND COLLATERAL

            Securities  sold under repurchase agreements are generally accounted
            for  as  collateralized financing transactions. They are recorded at
            the amounts at which the securities were sold plus accrued interest.
            The  Company  monitors  its exposure with respect to securities sold
            under  repurchase agreements, and a request for the return of excess
            securities held by the counterparty is made when deemed appropriate.

            The  Company  pledges  assets to collateralize repurchase agreements
            and  other  secured financings such as public deposits, treasury tax
            and  loan  and  other short-term borrowings. Pledged securities that
            can  be  sold  or  repledged  by the secured party are classified as
            securities  pledged as collateral on the consolidated balance sheet.
            The carrying value of securities owned by the Company that have been
            loaned  or  pledged  to counterparties where those counterparties do
            not  have  the  right  to  sell or repledge at December 31, 2003 are
            $16,869,000.  All  of  these securities were classified as available
            for  sale.

          INCOME TAXES

            Deferred  income tax assets and liabilities are determined using the
            balance  sheet method. Under this method, the net deferred tax asset
            or liability is determined based on the tax effects of the temporary
            differences  between  the  book and tax bases of the various balance
            sheet  assets  and  liabilities  and  gives  current  recognition to
            changes  in  tax  rates  and  laws.

          EARNINGS PER SHARE

            Basic  earnings per share are computed by dividing net income by the
            weighted  average  number  of  shares  of  common stock outstanding.
            Diluted  earnings  per  share are computed by dividing net income by
            the  sum  of  the  weighted-average number of shares of common stock
            outstanding  and  potential  common  shares. Potential common shares
            consist  of  stock  options.

          COMPREHENSIVE INCOME

            Accounting  principles  generally  require  that recognized revenue,
            expenses,  gains  and  losses  be  included  in net income. Although
            certain  changes in assets and liabilities, such as unrealized gains
            and  losses  on  available-for-sale  securities,  are  reported as a
            separate  component of the equity section of the balance sheet, such
            items,  along  with  net  income,  are  components  of comprehensive
            income.


                                        9
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

          STOCK-BASED COMPENSATION

            The  Company  has a stock-based employee compensation plan, which is
            described  more  fully in Note 9. The Company accounts for this plan
            under  the recognition and measurement principles of APB Opinion No.
            25,  Accounting  for  Stock  Issued  to  Employees,  and  related
            Interpretations.  No  stock-based  employee  compensation  cost  is
            reflected  in net income, as all options granted under this plan had
            an  exercise price equal to the market value of the underlying stock
            on  the date of grant. The following table illustrates the effect on
            net  income  and  earnings  per share if the Company had applied the
            fair  value  recognition  provisions  of  SFAS  Statement  No.  123,
            Accounting  for  Stock-Based  Compensation,  to stock-based employee
            compensation.

<TABLE>
<CAPTION>
                                                     YEARS ENDED DECEMBER 31,
                                                  ------------------------------
-                                                      2003            2002
                                                  ---------------  -------------
<S>                                               <C>              <C>
Net income, as reported                           $    1,133,789   $    725,062
Deduct: Total stock-based employee compensation
   expense determined under fair value based
   method for all awards, net of tax effect              (46,238)       (51,913)
                                                  ---------------  -------------
Pro forma net income (loss)                       $    1,087,551   $    673,149
                                                  ===============  =============
Earnings (losses) per share:
   Basic - as reported                            $         1.24   $       0.79
                                                  ===============  =============
   Basic - pro forma                              $         1.19   $       0.74
                                                  ===============  =============
   Diluted - as reported                          $         1.20   $       0.78
                                                  ===============  =============
   Diluted - pro forma                            $         1.15   $       0.73
                                                  ===============  =============
</TABLE>

          RECENT ACCOUNTING STANDARDS

            In  December  2002,  the  FASB  issued  SFAS No. 148, Accounting for
            Stock-Based  Compensation-Transition  and  Disclosure.  SFAS No. 148
            amends  SFAS  No.  123,  Accounting for Stock-Based Compensation, to
            provide  alternative  methods  of  transition  for  an  entity  that
            voluntarily changes to the fair value based method of accounting for
            stock-based  employee  compensation.  It  also amends the disclosure
            provisions of SFAS No. 123 to require prominent disclosure about the
            effects  on  reported  net  income  of an entity's accounting policy
            decisions  with  respect  to  stock-based employee compensation. The
            Company  has not elected to adopt the recognition provisions of this
            Statement  for  stock-based employee compensation and has elected to
            continue  with accounting methodology in Opinion No. 25 as permitted
            by  SFAS  No.  123.


                                       10
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 2.   SECURITIES

            The  amortized  cost and fair value of securities available-for-sale
            are  summarized  as  follows:

<TABLE>
<CAPTION>
                                                GROSS        GROSS
                                 AMORTIZED   UNREALIZED    UNREALIZED      FAIR
                                   COST         GAINS        LOSSES        VALUE
                                -----------  -----------  ------------  -----------
<S>                             <C>          <C>          <C>           <C>
DECEMBER 31, 2003:
U.S. TREASURY AND U.S.
  GOVERNMENT AGENCIES           $12,827,934  $    91,049  $   (58,950)  $12,860,033
STATE AND MUNICIPAL SECURITIES      100,562            -         (256)      100,306
MORTGAGE-BACKED SECURITIES       11,337,169       71,901      (43,834)   11,365,236
                                -----------  -----------  ------------  -----------
                                $24,265,665  $   162,950  $  (103,040)  $24,325,575
                                ===========  ===========  ============  ===========

December 31, 2002:
U.S. Government and
  agency securities             $ 9,787,635  $   169,514  $    (2,006)  $ 9,955,143
Equity securities                 2,655,253      204,997            -     2,860,250
Mortgage-backed securities       10,034,475      114,499            -    10,148,974
                                -----------  -----------  ------------  -----------
                                $22,477,363  $   489,010  $    (2,006)  $22,964,367
                                ===========  ===========  ============  ===========
</TABLE>

            At  December  31,  2003,  no  securities  had  been  in a continuous
            unrealized  loss  position  for  more  than  one  year.

            Securities  with  a carrying value of $16,869,000 and $12,252,000 at
            December  31,  2003  and  2002, respectively, were pledged to secure
            public deposits and for other purposes required or permitted by law.
            Gross  gains  of  $255,954  and  $  -  -  were  realized on sales of
            securities  for  the  years  ended  December  31,  2003  and  2002,
            respectively.

            The  amortized  cost and fair value of securities available-for-sale
            as  of  December  31,  2003 by contractual maturity are shown below.
            Actual  maturities  may  differ  from contractual maturities because
            issuers  may  have  the  right to call or prepay obligations with or
            without  call  or  prepayment  penalties.

<TABLE>
<CAPTION>
                              SECURITIES AVAILABLE-FOR-SALE
                            ---------------------------------
                               AMORTIZED           FAIR
                                  COST             VALUE
                            ----------------  ---------------
<S>                         <C>               <C>
Due from one to five years  $      8,929,884  $     8,975,779
Due from five to ten years         3,998,602        3,984,550
Due after ten years                        -                -
                            ----------------  ---------------
                            $     12,928,486  $    12,960,329
                            ================  ===============
Mortgage-backed securities  $     11,337,179  $    11,365,246
                            ================  ===============
</TABLE>


                                       11
<PAGE>
NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS


NOTE 3.     LOANS

            The  composition  of  loans  is  summarized  as  follows:

<TABLE>
<CAPTION>
                                       DECEMBER 31,
                                --------------------------
                                       2003          2002
                                ------------  ------------
<S>                             <C>           <C>
Commercial and agricultural     $16,029,000   $11,575,000
Real estate - construction        2,767,000     2,742,000
Real estate - mortgage           48,442,000    32,585,000
Consumer installment and other    4,401,749     3,997,257
                                ------------  ------------
                                 71,639,749    50,899,257
Allowance for loan losses          (873,650)     (675,246)
                                ------------  ------------
Loans, net                      $70,766,099   $50,224,011
                                ============  ============
</TABLE>

            Changes  in  the  allowance  for  loan  losses  are  as  follows:

<TABLE>
<CAPTION>
                                                  YEARS ENDED DECEMBER 31,
                                               ---------------  -------------
                                                    2003            2002
                                               ---------------  -------------
<S>                                            <C>              <C>
Balance, beginning of year                     $      675,246   $    527,192
   Provision for loan losses                          255,000        153,000
   Loans charged off                                  (92,815)       (39,546)
   Recoveries of loans previously charged off          36,219         34,600
                                               ---------------  -------------
Balance, end of year                           $      873,650   $    675,246
                                               ===============  =============
</TABLE>

            The  total  recorded investment in impaired loans, consisting solely
            of  loans  on nonaccrual status, was $5,505 and $213,053 at December
            31,  2003  and 2002, respectively. There were no impaired loans that
            had  related  allowances  determined in accordance with SFAS No 114,
            Accounting by Creditors for Impairment of a Loan, as of December 31,
            2003 and 2002. The average recorded investment in impaired loans for
            2003  and  2002  was  $123,774  and  $39,249, respectively. Interest
            income  recognized  on impaired loans for cash payments received was
            not  material  for the years ended December 31, 2003 and 2002. There
            were  no  loans  past  due  ninety  days  or more and still accruing
            interest  at  December  31,  2003  and  2002,  respectively.

            In the ordinary course of business, the Company has granted loans to
            certain related parties, including directors, executive officers and
            their  affiliates.  The  interest  rates  on  these  loans  were
            substantially  the  same  as  rates  prevailing  at  the time of the
            transaction  and repayment terms are customary for the type of loan.
            Changes  in related party loans for the year ended December 31, 2003
            are  as  follows:

<TABLE>
<CAPTION>
<S>                           <C>
Balance, beginning of year    $ 625,141
  Advances                      176,479
  Repayments                   (547,160)
                              ----------
Balance, end of year          $ 254,460
                              ==========
</TABLE>


                                       12
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 4.   PREMISES AND EQUIPMENT

          Premises and equipment are summarized as follows:

<TABLE>
<CAPTION>
                                         DECEMBER 31,
                                ---------------------------
                                      2003          2002
                                --------------  -----------
<S>                             <C>             <C>

Land                            $     909,836   $  500,000
Building and land improvements      1,034,575      999,713
Equipment                           1,338,822    1,071,063
Construction in process                19,256            -
                                --------------  -----------
                                    3,302,489    2,570,776
Accumulated depreciation             (890,185)    (653,710)
                                --------------  -----------
                                $   2,412,304   $1,917,066
                                ==============  ===========
</TABLE>

NOTE 5.     DEPOSITS

            The  aggregate  amount of time deposits in denominations of $100,000
            or  more  at  December  31,  2003  and  2002  was  $22,645,070  and
            $10,226,007, respectively. The scheduled maturities of time deposits
            at  December  31,  2003  are  as  follows:

<TABLE>
<CAPTION>
<S>          <C>
2004         $26,887,808
2005          14,762,900
2006             634,174
2007             100,008
2008             109,066
             -----------
             $42,493,956
             ===========
</TABLE>

            At  December  31,  2003  the  Company  had  deposits to one customer
            totaling  $14,462,460.

NOTE 6.     OTHER BORROWINGS

            Other borrowings consist of advances from the Federal Home Loan Bank
            totaling  $5,000,000  as  of December 31, 2003, and $2,000,000 as of
            December  31,  2002. These advances are collateralized by securities
            and  interest on the advances is payable quarterly at variable rates
            ranging  from  1.22%  to  2.98%.  The advances at December 31, 2003,
            mature  as  follows:

<TABLE>
<CAPTION>
                                                        DECEMBER 31,
                                                            2002
                                                        -------------
<S>                                                     <C>

November 5, 2012, with a call date of November 4, 2004  $   2,000,000
September 24, 2004                                          2,000,000
September 25, 2008                                          1,000,000
                                                        -------------
                                                        $   5,000,000
                                                        =============
</TABLE>


                                       13
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 7.     SECURITIES SOLD UNDER REPURCHASE AGREEMENTS

            Securities  sold  under  repurchase  agreements,  which  are secured
            borrowings,  generally  mature  within  one  to  four  days from the
            transaction  date.  Securities  sold under repurchase agreements are
            reflected  at  the  amount  of  cash received in connection with the
            transactions.  The  Company  may  be  required to provide additional
            collateral based on the fair value of the underlying securities. The
            Company  monitors  the  fair value of the underlying securities on a
            daily basis. Securities sold under repurchase agreements at December
            31,  2003  and  2002  were  $1,273,544 and $4,230,135, respectively.


NOTE 8.     EMPLOYEE BENEFIT PLAN

            The  Company  has  a  savings incentive retirement plan covering all
            employees.  Contributions to the plan charged to expense during 2003
            and  2002  amounted  to  $18,300  for  each  year.

            The Company has a deferred compensation plan providing for death and
            retirement  benefits  for its chief executive officer. The estimated
            amounts  to  be  paid  under  the compensation plan are being funded
            through  the  purchase  of  life insurance policies on the executive
            officer. The balance of the policy cash surrender values included in
            other  assets  at  December  31,  2003  and  2002  is $1,076,468 and
            $1,017,498, respectively. Income recognized on the policies amounted
            to  $45,735  and  $54,142  for the years ended December 31, 2003 and
            2002, respectively. Deferred compensation expense recognized for the
            years  ended  December  31,  2003  and  2002 amounted to $55,355 and
            $26,919,  respectively. The deferred compensation liability balances
            as  of  December  31,  2003  and  2002  were  $82,274  and  $26,919,
            respectively.


NOTE 9.     STOCK COMPENSATION PLAN

            The  Company  has an incentive stock option plan with 400,000 shares
            of  common  stock reserved for options to key employees. Options are
            granted  at  prices  equal to the fair market value of the shares at
            the date of grant and are exercisable as determined by the Company's
            Board  of  Directors.  The options expire ten years from the date of
            grant.  Other  pertinent  information  related  to the options is as
            follows:

<TABLE>
<CAPTION>
                                             YEARS ENDED DECEMBER 31,
                                    -------------------------------------------
                                             2003                  2002
                                    ----------------------  -------------------
                                                 WEIGHTED-            Weighted-
                                                  AVERAGE             average
                                                 EXERCISE             Exercise
                                      NUMBER      PRICE      Number    Price
                                    ----------  ----------  --------  ---------
<S>                                 <C>         <C>         <C>       <C>
Under option, beginning of year       158,000   $    10.99  153,500   $   10.83
   Granted                                  -            -   14,500       12.00
   Exercised                                -            -        -           -
   Terminated                          (8,500)       10.82  (10,000)      10.00
                                    ----------              --------
Under option, end of year             149,500        11.00  158,000       10.99
                                    ==========              ========

Exercisable, end of year              114,300        10.69  103,400       10.49
                                    ==========              ========

Weighted average fair value of
   options granted during the year         N/A              $  4.01
                                    ==========              ========
</TABLE>


                                       14
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 9.     STOCK  COMPENSATION  PLAN  (CONTINUED)

            Information  pertaining  to options outstanding at December 31, 2003
            is  as  follows:

<TABLE>
<CAPTION>
                                    OPTIONS OUTSTANDING                 OPTIONS EXERCISABLE
                  ---------------------------------------------------  ----------------------
                                            WEIGHTED-
                                             AVERAGE        WEIGHTED-              WEIGHTED-
                                            REMAINING        AVERAGE                AVERAGE
RANGE OF          NUMBER                   CONTRACTUAL       EXERCISE    NUMBER     EXERCISE
EXERCISE PRICES   OUTSTANDING                 LIFE            PRICE    EXERCISABLE    PRICE
                  -------------------  -------------------  ---------  -----------  ---------
<S>               <C>                  <C>                  <C>              <C>      <C>

10.00 - $12.00               149,500           6.23 years   $   11.00      114,300  $   10.69
                  ===================                                  ===========
</TABLE>

            The  fair  value  of  each  option grant is estimated on the date of
            grant  using  the  Black-Scholes  option-pricing  model  with  the
            following  weighted-average  assumptions:

<TABLE>
<CAPTION>
                          DECEMBER 31,
                              2002
                         -------------
<S>                      <C>

Dividend yield                      0%
Expected life                10 years
Expected volatility              0.01%
Risk-free interest rate          4.11%
</TABLE>

NOTE 10.     INCOME TAXES


              Income  tax  expense  consists  of  the  following:

<TABLE>
<CAPTION>
                                                YEARS ENDED DECEMBER 31,
                                             ------------------------------
                                                  2003            2002
                                             ---------------  -------------
<S>                                          <C>              <C>
Current                                      $      366,701   $    310,303
Deferred                                            (46,307)       (53,970)
Change in valuation allowance                      (534,977)      (256,333)
                                             ---------------  -------------
               Income tax expense (benefit)  $     (214,583)  $          -
                                             ===============  =============
</TABLE>

            The  Company's  income tax expense differs from the amounts computed
            by  applying the federal income tax statutory rates to income before
            income  taxes.  A  reconciliation  of the differences is as follows:

<TABLE>
<CAPTION>
                                     YEARS ENDED DECEMBER 31,
                                  ------------------------------
                                        2003           2002
                                  ---------------  -------------
<S>                               <C>              <C>

Income taxes at statutory rate    $      312,530   $    246,521
   Other items                             7,864          9,812
   Change in valuation allowance        (534,977)      (256,333)
                                  ---------------  -------------
Income tax expense                $     (214,583)  $          -
                                  ===============  =============
</TABLE>


                                       15
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 10.     INCOME TAXES (CONTINUED)

The components of deferred income taxes are as follows:

<TABLE>
<CAPTION>
                                               DECEMBER 31,
                                          ---------------------
                                            2003        2002
                                          ---------  ----------
<S>                                       <C>        <C>
Deferred tax assets:
  Loan loss reserves                      $211,169   $ 171,019
  Preopening and organizational expenses     4,084      40,338
  Deferred compensation                     31,047      10,158
  Net operating loss carryforward           30,966     383,918
  Other real estate owned                   29,575           -
  Other                                     34,091      32,688
                                          ---------  ----------
                                           340,932     638,121
Valuation allowance                        (40,474)   (391,607)
                                          ---------  ----------
                                           300,458     246,514
                                          ---------  ----------

Deferred tax liabilities:
  Depreciation                              72,125      62,670
  Securities available-for-sale             22,765     183,844
                                          ---------  ----------
                                            94,890     246,514
                                          ---------  ----------

Net deferred income tax assets            $205,568   $       -
                                          =========  ==========
</TABLE>

NOTE 11.    EARNINGS PER SHARE

            Presented  below  is  a  summary of the components used to calculate
            basic  and  diluted  earnings  per  share.


<TABLE>
<CAPTION>
                                                                        YEARS ENDED DECEMBER 31,
                                                                      --------------  ------------
                                                                           2003           2002
                                                                      --------------  ------------
<S>                                                                   <C>             <C>
Basic Earnings Per Share:
   Weighted average common shares outstanding                                912,167       912,159
                                                                      ==============  ============

Net income                                                            $    1,133,789  $    725,062
                                                                      ==============  ============

Basic earnings per share                                              $         1.24  $        .79
                                                                      ==============  ============

Diluted Earnings Per Share:
   Weighted average common shares outstanding                                912,167       912,159
   Net effect of the assumed exercise of stock options based on the
      treasury stock method using average market prices for the year          32,817        14,126
                                                                      --------------  ------------
   Total weighted average common shares and
      common stock equivalents outstanding                                   944,984       926,285
                                                                      ==============  ============

Net income                                                            $    1,133,789  $    725,062
                                                                      ==============  ============

Diluted earnings per share                                            $         1.20  $        .78
                                                                      ==============  ============
</TABLE>


                                       16
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 12.     COMMITMENTS AND CONTINGENCIES

          LOAN COMMITMENTS

            The  Company  is  a  party  to  financial  instruments  with
            off-balance-sheet  risk in the normal course of business to meet the
            financing  needs  of  its  customers.  These  financial  instruments
            include  commitments to extend credit and standby letters of credit.
            The  involve,  to  varying  degrees,  elements  of  credit  risk and
            interest rate risk in excess of the amount recognized in the balance
            sheets. The majority of all commitments to extend credit and standby
            letters  of  credit  are  variable  rate  instruments.

            The Company's exposure to credit loss in the event of nonperformance
            by  the  other  party to the financial instrument for commitments to
            extend  credit  and  standby letters of credit is represented by the
            contractual  amount  of those instruments. The Company uses the same
            credit policies in making commitments and conditional obligations as
            it does for on-balance-sheet instruments. A summary of the Company's
            commitments  is  as  follows:

<TABLE>
<CAPTION>
                                            DECEMBER 31,
                                     -----------------------
                                        2003         2002
                                     -----------  ----------
<S>                                  <C>          <C>
Commitments to extend credit         $10,110,000  $8,494,000
Financial standby letters of credit    1,087,000     322,000
                                     -----------  ----------
                                     $11,197,000  $8,816,000
                                     ===========  ==========
</TABLE>

            Commitments to extend credit are agreements to lend to a customer as
            long  as  there  is no violation of any condition established in the
            contract. Commitments generally have fixed expiration dates or other
            termination  clauses and may require payment of a fee. Since many of
            the commitments are expected to expire without being drawn upon, the
            total  commitment  amounts  do not necessarily represent future cash
            requirements.  The  collateral  obtained, if deemed necessary by the
            Company  upon  extension  of credit, is based on management's credit
            evaluation  of  the  party.

            Standby  letters of credit are conditional commitments issued by the
            Company to guarantee the performance of a customer to a third party.
            Those  guarantees are primarily issued to support public and private
            borrowing  arrangements. The credit risk involved in issuing letters
            of  credit  is  essentially  the  same as that involved in extending
            loans  to  customers.  Collateral  held  varies  and  is required in
            instances  which  the  Company  deems  necessary.

          CONTINGENCIES

            In the normal course of business, the Company is involved in various
            legal  proceedings.  In  the  opinion  of  management, any liability
            resulting  from  such  proceedings would not have a material adverse
            effect  on  the  Company's  financial  statements.

NOTE 13.     CONCENTRATIONS OF CREDIT

            The  Company  originates  primarily  commercial,  residential  and
            consumer  loans  to  customers  in  Gordon  County  and  surrounding
            counties.  The ability of the majority of the Company's customers to
            honor their contractual loan obligations is dependent on the economy
            in  these  areas.

            Sixty-eight  percent of the Company's loan portfolio is concentrated
            in  loans  secured by real estate, of which a substantial portion is
            secured  by  real  estate  in  the  Company's  primary  market area.
            Accordingly,  the  ultimate  collectibility of the loan portfolio is
            susceptible to changes in market conditions in the Company's primary
            market  area. The other significant concentrations of credit by type
            of  loan  are  set  forth  in  Note  3.

            The Company, as a matter of policy, does not generally extend credit
            to  any  single  borrower or group of related borrowers in excess of
            15%  of  the  Bank's capital and surplus as defined by the Office of
            the  Comptroller  of  the  Currency,  or  approximately  $1,482,000.


                                       17
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 14.     REGULATORY MATTERS

            The  Bank  is  subject  to  certain  restrictions  on  the amount of
            dividends that may be declared without prior regulatory approval. At
            December 31, 2003, no dividends could be declared without regulatory
            approval.

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

            Quantitative  measures  established  by regulation to ensure capital
            adequacy  require the Bank to maintain minimum amounts and ratios of
            Total and Tier I capital to risk-weighted assets, as defined, and of
            Tier  I  capital to average assets, as defined. Management believes,
            as  of  December 31, 2003 and 2002, the Company and the Bank met all
            capital  adequacy  requirements  to  which  they  are  subject.

            As  of  December  31,  2003,  the  most recent notification from the
            Federal  Deposit  Insurance Corporation categorized the Bank as well
            capitalized  under  the  regulatory  framework for prompt corrective
            action.  To  be  categorized  as  well  capitalized,  the  Bank must
            maintain  minimum  Total  risk-based,  Tier  I risk-based and Tier I
            leverage  ratios  as  set forth in the following table. There are no
            conditions  or  events  since  that  notification  that  management
            believes  have  changed  the  Bank's  category.

            The  Company  and  the  Bank's actual capital amounts and ratios are
            presented  in  the  following  table:

<TABLE>
<CAPTION>
                                                                             TO BE WELL
                                                            FOR CAPITAL   CAPITALIZED UNDER
                                                             ADEQUACY     PROMPT CORRECTIVE
                                             ACTUAL          PURPOSES     ACTION PROVISIONS
                                        ---------------  ---------------  -----------------
                                        AMOUNT   RATIO   AMOUNT   RATIO   AMOUNT   RATIO
                                        -------  ------  -------  ------  -------  --------
<S>                                     <C>      <C>     <C>      <C>     <C>      <C>
                                                     (DOLLARS IN THOUSANDS)
                                        ---------------------------------------------------
DECEMBER 31, 2003:
TOTAL CAPITAL TO RISK WEIGHTED ASSETS
  CONSOLIDATED                          $ 9,936  13.06%  $ 6,086      8%  $   N/A       N/A
  BANK                                  $ 9,882  12.99%  $ 6,086      8%  $ 7,607       10%
TIER I CAPITAL TO RISK WEIGHTED ASSETS
  CONSOLIDATED                          $ 9,063  11.91%  $ 3,043      4%  $   N/A       N/A
  BANK                                  $ 9,009  11.84%  $ 3,043      4%  $ 4,564        6%
TIER I CAPITAL TO AVERAGE ASSETS
  CONSOLIDATED                          $ 9,063   8.76%  $ 4,139      4%  $   N/A       N/A
  BANK                                  $ 9,009   8.71%  $ 4,139      4%  $ 5,174        5%

December 31, 2002:
Total Capital to Risk Weighted Assets
  Consolidated                          $ 8,603  14.85%  $ 4,634      8%  $   N/A       N/A
  Bank                                  $ 8,545  14.75%  $ 4,634      8%  $ 5,793       10%
Tier I Capital to Risk Weighted Assets
  Consolidated                          $ 7,928  13.68%  $ 2,317      4%  $   N/A       N/A
  Bank                                  $ 7,870  13.58%  $ 2,317      4%  $ 3,476        6%
Tier I Capital to Average Assets
  Consolidated                          $ 7,928  10.08%  $ 3,145      4%  $   N/A       N/A
  Bank                                  $ 7,870  10.01%  $ 3,145      4%  $ 3,931       5%
</TABLE>


                                       18
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 15.     FAIR VALUE OF FINANCIAL INSTRUMENTS

            The  fair value of a financial instrument is the current amount that
            would  be  exchanged between willing parties, other than in a forced
            liquidation.  Fair value is best determined based upon quoted market
            prices.  However,  in  many  instances,  there  are no quoted market
            prices  for  the  Company's  various financial instruments. In cases
            where quoted market prices are not available, fair value is based on
            discounted  cash  flows  or  other  valuation  techniques.  These
            techniques  are  significantly  affected  by  the  assumptions used,
            including  the  discount  rate  and  estimates of future cash flows.
            Accordingly,  the  fair  value  estimates  may not be realized in an
            immediate  settlement  of  the instrument. SFAS No. 107, Disclosures
            about  Fair  Values  of  Financial  Instruments,  excludes  certain
            financial  instruments  and  all  nonfinancial  instruments from its
            disclosure  requirements.  Accordingly,  the  aggregate  fair  value
            amounts  presented may not necessarily represent the underlying fair
            value  of  the  Company.

            CASH, DUE FROM BANKS, INTEREST-BEARING DEPOSITS IN BANKS AND FEDERAL
            FUNDS  SOLD:  The  carrying  amounts  of  cash,  due  from  banks,
            interest-bearing  deposits  in  banks  and  federal  funds  sold
            approximate  fair  values.

            SECURITIES: Fair values for securities are based on available quoted
            market  prices.  The carrying values of restricted equity securities
            with  no  readily  determinable  fair value approximate fair values.

            LOANS:  For  variable-rate loans that reprice frequently and have no
            significant change in credit risk, fair values are based on carrying
            values.  For  other  loans,  the  fair  values  are  estimated using
            discounted  cash flow analyses, using interest rates currently being
            offered  for  loans  with  similar  terms  to borrowers with similar
            credit  quality.  Fair values for impaired loans are estimated using
            discounted cash flow analyses or underlying collateral values, where
            applicable.

            DEPOSITS:  The carrying amounts of demand deposits, savings deposits
            and  variable-rate  certificates  of  deposit approximate their fair
            values.  Fair  values  for  fixed-rate  certificates  of deposit are
            estimated  using  a  discounted  cash  flow calculation that applies
            interest rates currently being offered on certificates to a schedule
            of  aggregated  expected  monthly  maturities  on  time  deposits.

            OTHER  BORROWINGS  AND  SECURITIES SOLD UNDER REPURCHASE AGREEMENTS:
            The  carrying  value  of  other borrowings and securities sold under
            repurchase  agreements  approximates  their  fair  value.

            ACCRUED  INTEREST:  The  carrying  amounts  of  accrued  interest
            approximate their  fair  values.

            OFF-BALANCE-SHEET  INSTRUMENTS:  Fair  values  of  the  Company's
            off-balance-sheet  financial instruments are based on fees currently
            charged  to enter into similar agreements. Since the majority of the
            Company's off-balance-sheet instruments consist of nonfee-producing,
            variable-rate  commitments,  the  Company has determined they do not
            have  a  distinguishable  fair  value.


                                       19
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 15.     FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)

            The  carrying  amounts  and estimated fair  values  of the Company's
            financial  instruments  were  as  follows:

<TABLE>
<CAPTION>
                                           DECEMBER 31, 2003         December 31, 2002
                                       ------------------------  -------------------------
                                         CARRYING      FAIR        Carrying      Fair
                                          AMOUNT       VALUE        Amount       Value
                                       -----------  -----------  -----------  ------------
<S>                                    <C>          <C>          <C>          <C>
FINANCIAL ASSETS:
  Cash, due from banks,
   interest-bearing deposits in banks
   and federal funds sold              $ 2,857,911  $ 2,857,911  $ 3,606,324  $  3,606,324
  Securities                            25,158,450   25,158,450   23,585,792    23,585,792
  Loans                                 70,766,099   71,264,000   50,224,011    51,570,000
  Accrued interest receivable              506,591      506,591      493,805       493,805

FINANCIAL LIABILITIES:
  Deposits                              87,572,269   87,862,000   66,049,928    66,176,000
  Other borrowings and securities
   sold under repurchase agreements      6,273,544    6,273,544    6,230,135     6,230,135
  Accrued interest payable                 173,728      173,728      116,646       116,646
</TABLE>

NOTE 16.     SUPPLEMENTAL FINANCIAL DATA

            Components of other operating income and expenses in excess of 1% of
            total  revenue  are  as  follows:

<TABLE>
<CAPTION>
                                      YEARS ENDED DECEMBER 31,
                                    ----------------------------
                                         2003          2002
                                    --------------  ------------
<S>                                 <C>             <C>
OTHER OPERATING INCOME:
  Mortgage origination fee income   $      167,211  $    131,364
OTHER OPERATING EXPENSES:
  Data processing                          299,809       229,244
  Postage and office supplies               99,550        76,708
  Telephone expense                         57,146        47,677
  Legal and professional                   245,718       188,119
  Advertising and public relations         120,549       141,320
</TABLE>


                                       20
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 17.     PARENT COMPANY FINANCIAL INFORMATION

            The  following  information presents the condensed balance sheets as
            of December 31, 2003 and 2002 and the statements of income, and cash
            flows  of  North  Georgia Community Financial Partners, Inc. for the
            years  then  ended:

<TABLE>
<CAPTION>
               CONDENSED BALANCE SHEETS

                                          DECEMBER 31,
                                    ----------------------
                                       2003        2002
                                    ----------  ----------
<S>                                 <C>         <C>
ASSETS
  Cash                              $   54,536  $   58,742
  Investment in subsidiary           9,045,739   8,357,603
                                    ----------  ----------

      Total assets                  $9,100,275   8,416,345
                                    ==========  ==========

        TOTAL STOCKHOLDERS' EQUITY  $9,100,275  $8,416,345
                                    ==========  ==========
</TABLE>

<TABLE>
<CAPTION>
                       CONDENSED STATEMENTS OF INCOME

                                                         DECEMBER 31,
                                                   ----------------------
                                                      2003        2002
                                                   -----------  ---------
<S>                                                <C>          <C>
INCOME, OTHER                                      $      479   $  1,575
EXPENSES, OTHER                                         4,685     41,908
                                                   -----------  ---------

     Loss before equity in earnings of subsidiary      (4,206)   (40,333)

EQUITY IN EARNINGS OF SUBSIDIARY                    1,137,995    765,395
                                                   -----------  ---------

        NET INCOME                                 $1,133,789   $725,062
                                                   ===========  =========
</TABLE>


                                       21
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 17.     PARENT COMPANY FINANCIAL INFORMATION (CONTINUED)

<TABLE>
<CAPTION>
                      CONDENSED STATEMENTS OF CASH FLOWS

                                                         DECEMBER 31,
                                                  ------------------------
                                                      2003         2002
                                                  ------------  ----------
<S>                                               <C>           <C>
OPERATING ACTIVITIES
  Net income                                      $ 1,133,789   $ 725,062
  Adjustments to reconcile net income to
     net cash used in operating activities:
     Equity in earnings of subsidiary              (1,137,995)   (765,395)
                                                  ------------  ----------
       Net cash used in operating activities           (4,206)    (40,333)
                                                  ------------  ----------

FINANCING ACTIVITIES
  Net proceeds from sale of common stock                    -      12,000
                                                  ------------  ----------
       Net cash provided by financing activities            -      12,000
                                                  ------------  ----------

Net decrease in cash                                   (4,206)    (28,333)

Cash at beginning of year                              58,742      87,075
                                                  ------------  ----------

Cash at end of year                               $    54,536   $  58,742
                                                  ============  ==========
</TABLE>


                                       22
<PAGE>