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SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
 FORM 10-KSB    Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 2004 Commission File No. 333-116852 GEORGIA TRUST BANCSHARES, INC.  Georgia
(State of Incorporation)
    
    34-1985678
(I.R.S. Employer Identification Number)3570 Financial Center Way, Suite 2
Buford, Georgia
(Address of Principal Executive Offices)
    
    30519
(Zip Code)
 (770) 614-7644
(Issuers Telephone Number, Including Area Code)    Securities registered under Section 12(b) of the Exchange Act: Title of Each Class
    
    Name of Exchange on Which RegisteredNone
    
    N/A
 Securities registered under Section 12(g) of the Exchange Act:None Check whether the issuer: (1) has filed all reports required to be filed by Section 13 or
15(d) of the Exchange Act during the past 12 months (or 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 þ  No o Check if disclosure of delinquent filers in response to Item 405 of Regulation S-B is not
contained in this form, and no disclosure will be contained, to the best of the issuers knowledge,
in definitive proxy or information statements incorporated by reference in Part III of this Form
10-KSB or any amendment to this Form 10-KSB.  Yes þ The issuers revenues for its most recent fiscal year were $0. The aggregate market value of the common stock held by non-affiliates of the issuer on March
28, 2005 was $14,245,000. As of such date, no organized trading market existed for the Common
Stock of the issuer. The aggregate market value was computed by reference to the fair market value
of the Common Stock of the issuer based on recent sales of the Common Stock. For the purpose of
this response, directors, executive officers and holders of 5% or more of the issuers common stock are
considered the affiliates of the issuer at that date. Although directors and executive officers of
the registrant were assumed to be affiliates of the issuer for purposes of this calculation, the
classification is not to be interpreted as an admission of such status. As of March 28, 2005, there were 1,800,000 shares of the issuers common stock outstanding. Transitional Small Business Disclosure Format (check one):  Yes o  No þ




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TABLE OF CONTENTS  PART ICAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTSItem 1. Description of BusinessSUPERVISION AND REGULATIONItem 2. PropertiesItem 3. Legal ProceedingsItem 4. Submission of Matters to a Vote of Security Holders.PART IIItem 5. Market for Common Equity and Related Stockholder MattersItem 6. Managements Discussion and Analysis of Financial Condition and Plan of OperationsItem 7. Financial StatementsItem 8. Changes in and Disagreements with Accountants on Accounting and Financial DisclosureItem 8A. Controls and ProceduresItem 8B. Other InformationPART IIIItem 9. Directors and Executive Officers of the RegistrantItem 10. Executive CompensationItem 11. Security Ownership of Certain Beneficial Owners and ManagementItem 12. Certain Relationships and Related TransactionsPART IVItem 13. ExhibitsItem 14. Principal Accountant Fees and ServicesSIGNATURESEX-21.1 SUBSIDIARIES OF THE REGISTRANTEX-31.1 CERTIFICATION OF THE CEOEX-31.2 CERTIFICATION OF THE CFOEX-32.1 SECTION 906 CERTIFICATION OF CEO AND CFO    Table of Contents  
 PART I 
 CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS Some of the statements of Georgia Trust Bancshares, Inc., a Georgia corporation (Georgia
Trust Bancshares), included in this Report, including matters discussed under the caption
Managements Discussion and Analysis of Financial Condition and Plan of Operations, are
forward-looking statements. Forward-looking statements include statements about the
competitiveness of the banking industry, potential regulatory obligations, potential economic
growth in the primary service areas of Georgia Trust Bank, future growth and earnings, the business
strategies of Georgia Trust Bank and Georgia Trust Bancshares, capital expenditures of Georgia
Trust Bancshares and Georgia Trust Bank, and other statements that are not historical facts. The
words anticipate, estimate, project, intend, expect, believe, forecast and similar
expressions are also intended to identify the forward-looking statements, but some of these
statements may use other phrasing. These forward-looking statements are not guarantees of future
performance and are subject to a number of risks, uncertainties and other factors that could cause
the Companys actual results, performance or achievements to differ materially from those expressed
or implied by these forward-looking statements. These factors include, among other things:  
    we lack an operating history from which to base an estimate of our future financial performance;
    we may be unable to implement key elements of our business strategy;
    we may be unable to retain key personnel;
    we may face increased competition from other financial institutions;
    there may be a lack of sustained growth in the economy of Gwinnett County and Cobb
County, Georgia;
    we may experience rapid fluctuations in interest rates; and
    we may experience changes in the legislative and regulatory environment. Many of these factors are beyond our ability to control or predict, and readers are cautioned
not to put undue reliance on such forward-looking statements. We disclaim any obligation to update
or revise publicly or otherwise any forward-looking statements to reflect subsequent events, new
information or future circumstances, except as required by law. References in this Report to we, us, and our collectively refer to Georgia Trust
Bancshares, Inc. and Georgia Trust Bank. 
 Item 1. Description of Business Background Georgia Trust Bancshares.  Georgia Trust Bancshares was incorporated as a Georgia corporation
on May 20, 2004 to serve as a bank holding company for Georgia Trust Bank. We completed our
initial public offering on March 11, 2005, pursuant to which we raised approximately $17.9 million,
after deducting offering expenses. On December 30, 2004, we received approval from the Board of
Governors of the Federal Reserve System and the Georgia Department of Banking and Finance (the
Georgia Department) for Georgia Trust Bancshares to become a bank holding company. Accordingly,
on March 1, 2005, Georgia Trust Bancshares used $12.5 million of the net proceeds of the initial
public offering to acquire all of the outstanding shares of common stock of Georgia Trust Bank. Georgia Trust Bancshares has been organized to make it easier for Georgia Trust Bank to serve
its future customers. The holding company structure provides flexibility for expanding our banking
business by possibly acquiring other financial institutions and providing additional capital and
banking-related services. A holding company structure will make it easier for us to raise capital
for Georgia Trust Bank because we will be able to issue securities without the need for prior
banking regulatory approval and the proceeds of debt securities issued by the holding company can
be invested in the bank as primary capital.




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The executive offices of Georgia Trust Bancshares are located at 3570 Financial Center Way,
Suite 2, Buford, Georgia 30519. Our telephone number at such address is (770) 614-7644. Georgia Trust Bank.  On May 12, 2004, we filed applications on behalf of Georgia Trust Bank
with the Georgia Department to organize as a state bank and with the FDIC to obtain insurance for
Georgia Trust Banks deposits. We received final approval of Georgia Trust Banks charter
application on November 5, 2004, and its application for deposit insurance from the FDIC on October
14, 2004. We are currently preparing the modular facility that will serve as Georgia Trust Banks
main office and expect the bank to open for business on or about April 25, 2005. In addition, we intend to open our branch
office in Kennesaw, Cobb County, Georgia in the third quarter of 2005. This branch will also initially operate
from a modular facility. Georgia Trust Bank performs banking services customary for full service banks of similar size
and character. Such services include making consumer loans, real estate loans, commercial loans
and commercial leases, providing other banking services, such as cash management services,
travelers checks, and maintaining deposit accounts such as checking accounts, money market
accounts, and a variety of certificates of deposit and IRA accounts. Market Area and Competition Primary Service Area.  Georgia Trust Banks primary service areas are Gwinnett County and Cobb
County, Georgia. Our primary service areas represent a geographic area that includes the city of
Buford, Georgia and the city of Kennesaw, Georgia. Located 37 miles northeast and 27 miles
northwest, respectively, of the Georgia State Capitol and 49 miles from each other, Gwinnett County
and Cobb County have experienced rapid growth over the last decade. Highways I-85 and I-985 run
through Gwinnett County and Highways I-75, I-285, I-20 and I-575 run through Cobb County. Gwinnett
County is home to the Mall of Georgia which his expected to continue to drive residential and
commercial growth in the area. Cobb County is home to Kennesaw State University, Six Flags Over
Georgia and the White Water Amusement Park. According to the U.S. Census Bureau, the estimated population of Gwinnett County was 644,386
in 2002, which represents an increase of 83% from 1990. The U.S. Census Bureau projects that the
population of Gwinnett County will continue to grow over the next several years, with an estimated
population of 773,589 by 2008, an increase of approximately 32% from 2000. This represents
projected annual growth in population of 4%, compared to projected national growth of 1.32%. The
estimated population in Cobb County was 644,186 in 2002, which represents an increase of 44% from
1990. The U.S. Census Bureau projects that the population of Cobb County will continue to grow
over the next several years, with an estimated population of 738,269 in 2008. According to the
American Community Survey, the estimated number of housing units within Gwinnett County was 236,000
in 2002, an increase of 16.7% from 2000 and the estimated number of housing units within Cobb
County was 251,000, an increase of 10.3% from 2000. In 2002, the estimated median household income
for Gwinnett County and Cobb County respectively is $57,291 and $62,034, which compares favorably
to Georgias median household income of $43,316. Industry, Labor and Employment.  According to the Georgia Department of Labor, over 15,080
businesses are located in Gwinnett County and 41,324 businesses are located in Cobb County.
Gwinnett County has approximately 5,900 service firms, over 3,100 retail trade businesses, over
2,100 construction firms and approximately 789 manufacturing firms while Cobb County has
approximately 15,567 service firms, 2,043 retail trade businesses, 2,059 construction firms and 657
manufacturing firms. According to the Georgia Department of Labor, in 2002, the service sector, which includes
professional, business, health and educational services, represents the largest employment sector,
providing 24% and 30% of Gwinnett County and Cobb County jobs, respectively. The other predominant
employment sectors of Gwinnett County are the retail trade, manufacturing and construction sectors,
providing 17%, 11% and 10% of Gwinnett 2




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Countys jobs, respectively. According to the Georgia Department of Labor, the largest
employers in Gwinnett County are Scientific Atlanta, Ciba Vision Corporation, Avon Products,
Dispensing Systems, Ikon Office Solutions and Nextel Communications. The other predominant
employment sectors of Cobb County are retail trade, manufacturing, finance, insurance, real estate,
and rental leasing and construction, providing 11%, 10%, 9% and 9%, respectively. The largest
employers in Cobb County are Cobb County Public Schools, WellStar Health Systems, Inc., IBM
Corporation, Lockhead Martin Aeronautics Company and The Home Depot, Inc. With this diversified employment base, Gwinnett County and Cobb County have enjoyed steady
employment. According to the Georgia Department of Community Affairs, Gwinnett County and Cobb
Countys average annual unemployment rate was 2.4% and 2.8%, respectively, between 1996 and 2000,
compared to the Georgia average unemployment rate of 4.2% and the national average unemployment
rate of 4.8%, for the same period. According to the Georgia Department of Labor, the average
unemployment rate for Gwinnett County and Cobb County, respectively, in 2000 was 2.4% and 2.8%,
compared to the Georgia average of 3.8% and the national average of 4%. We believe that Gwinnett County and Cobb County present a growing and diversified economic
environment that will support Georgia Trust Bancshares formation. As a community bank, Georgia
Trust Bank will be designed to serve the needs of the citizens and businesses within this growing
economy. Competition.  The banking business is highly competitive. Georgia Trust Bank will compete
with other commercial banks, savings and loan associations, credit unions, and money market mutual
funds operating in its primary service area. As of June 30, 2004, the latest date for which
information is available, Gwinnett County is served by 37 insured financial institutions operating
a total of 186 retail branches while Cobb County is served by 30 insured financial institutions
operating a total of 172 retail branches. A number of these competitors are well established in
our two primary service areas. According to the FDIC, bank and thrift deposits in Gwinnett County grew from approximately
$4,197,000,000 in June 1997 to approximately $8,168,000 in June 2004, an increase of approximately
95% while bank and thrift deposits in Cobb County grew from approximately $4,127,000,000 in June
1997 to approximately $7,093,000 in June 2004, an increase of approximately 72%. We compete directly with many of the institutions currently operating in Gwinnett and Cobb
Counties. Additionally, we anticipate further competition as existing institutions in the market
expand their branch networks or as institutions from other markets branch into our two primary
service areas. For example, several community banks are in organization or were recently formed in
neighboring counties, and we expect that one or more of these banks may attempt to enter the
Gwinnett County and Cobb County markets within the next five years. We recognize that most of our competitors have substantially greater resources and lending
limits than we have and provide other services, such as extensive and established branch networks
and trust services, which we will not provide initially. As a result of these competitive factors,
we may have to pay higher interest rates to attract depositors or extend credit with lower interest
rates to attract borrowers. However, we will attempt to minimize these competitive factors and
attract new banking relationships by offering our customers a personalized approach to banking. A number of large national and regional institutions have entered or expanded in our two
primary service areas as a result of the acquisition of smaller community banks. A number of these
large national and regional institutions are well established within our two primary service areas,
holding over 50% of deposits on combined basis within each of the Gwinnett County and Cobb County
areas as of June 30, 2004. These large national and regional institutions include SunTrust Bank,
Bank of America, Wachovia, and SouthTrust Bank. With respect to these large national and regional institutions, many of the customer service
functions, as well as authority for loan approval, are located outside of our two primary service
areas. We believe an attractive opportunity exists for a new bank that positions itself as a
locally-owned community bank headquartered in Gwinnett County. We intend to differentiate Georgia
Trust Bank from our competitors primarily through our active calling 3




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programs for directors and officers, our involvement in the communities we serve, the quality
and experience of our staff and our convenient office locations. Lending Services Lending Policy.  Georgia Trust Bank is being established to generally support Gwinnett County
and Cobb County; consequently, we will aggressively lend money to creditworthy borrowers within
these two limited geographic areas. We will emphasize real estate-related loans, including
construction loans for residential and commercial properties, and primary and secondary mortgage
loans for the acquisition or improvement of personal residences, as well as commercial loans to
small- and medium-sized businesses and professional concerns. We will also emphasize consumer
loans to individuals. We attempt to avoid concentrations of loans to a single industry or based on a single type of
collateral. To address the risks inherent in making loans, we maintain an allowance for loan
losses based on, among other things, an evaluation of our loan loss experience, the amount of past
due and nonperforming loans, current and anticipated economic changes and the values of certain
loan collateral. Based upon such factors, our management makes various assumptions and judgments
about the ultimate collectibility of the loan portfolio and provides an allowance for potential
loan losses based upon a percentage of the outstanding balances and for specific loans. However,
because there are certain risks that cannot be precisely quantified, managements judgment of the
allowance is necessarily an approximation and imprecise. The adequacy and methodology of our
allowance for loan losses is subject to regulatory examination and compared to a peer group of
financial institutions identified by the banks regulatory agencies. Loan Approval and Review.  Our loan approval policies provide for various levels of officer
lending authority. When the amount of total loans to a single borrower exceeds that individual
officers lending authority, either an officer with a higher lending limit or our Loan Committee
determines whether to approve the loan request. We do not make any loans to any of our directors
or executive officers unless our board of directors first approves the loan, and the terms of the
loan are no more favorable than would be available to any comparable borrower. We may make small
loans to our directors and executive officers without the prior approval of our board of directors,
in accordance with regulatory limits for such loans. Lending Limits.  Our lending activities are subject to a variety of lending limits imposed by
law. Differing limits apply in some circumstances based on the type of loan or the nature of the
borrower, including the borrowers relationship to Georgia Trust Bank. In general, however, we are
able to loan any one borrower a maximum amount equal to either:  
    15% of Georgia Trust Banks statutory capital base if the loan is not fully secured; or
    25% of the banks statutory capital base if the entire amount of the loan is fully secured. Our management team has not yet established any minimum or maximum loan limits other than the
statutory lending limits described above. These limits will increase or decrease as our capital
increases or decreases as a result of its earnings or losses, among other reasons. We may sell
participations in our loans to other financial institutions in order to meet all of the lending
needs of loan customers. Credit Risks.  The principal economic risk associated with each category of loans that we
expect to make is the creditworthiness of the borrower. Borrower creditworthiness is affected by
general economic conditions and the strength of the relevant business market segment. General
economic factors affecting a borrowers ability to repay include interest, inflation and employment
rates, as well as other factors affecting a borrowers customers, suppliers and employees. With respect to real estate loans generally, the ability of a borrower to repay a real estate
loan will depend upon a number of economic factors, including employment levels and fluctuations in
the value of real estate. In the case of a real estate purchase loan, the borrower may be unable
to repay the loans at the end of the loan term and 4




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may thus be forced to refinance the loan at a higher interest rate, or, in certain cases, the
borrower may default as a result of its inability to refinance the loan. In either case, the risk
of nonpayment by the borrower is increased. In the case of a real estate construction loan, there
is generally no income from the underlying property during the construction period, and the
developers personal obligations under the loan are typically limited. Each of these factors
increases the risk of nonpayment by the borrower. The marketability of all real estate loans,
including adjustable rate mortgage loans, is also generally affected by the prevailing level of
interest rates. The well established financial institutions in our two primary service areas are likely to
make proportionately more loans to medium  to large-sized businesses than we will make. Many of
our anticipated commercial loans will be made to small  to medium-sized business that may be less
able to withstand competitive, economic and financial pressures than large borrowers. Our
commercial loan portfolio is expected to consist of loans to individual, partnership and corporate
borrowers that are primarily located in Gwinnett County or Cobb County. Accordingly, we anticipate
that our commercial borrowers will reflect the diversified businesses of our two primary service
areas, and will principally include service, retail trade and manufacturing firms. The risks
associated with commercial loans depend to a large extent upon various economic factors, including
the strength of the economy in each of our two primary service areas and the ability of our
commercial borrowers to properly evaluate and respond to a changing marketplace. In addition, our
commercial borrowers will likely face risks related specifically to the unique nature of their
business. For example, service and retail trade firms may incur risks associated with labor
shortages and consumer preference changes, while manufacturing firms may incur risks associated
with raw material and labor shortages, as well as currency fluctuations. Consumer loans generally involve more credit risks than other loans because of the type and
nature of the underlying collateral or because of the absence of any collateral. Consumer loan
repayments are dependent on the borrowers continuing financial stability and are likely to be
adversely affected by job loss, divorce and illness. Furthermore, the application of various
federal and state laws, including federal and state bankruptcy and insolvency laws, may limit the
amount which can be recovered on such loans in the case of default. In most cases, any repossessed
collateral will not provide an adequate source of repayment of the outstanding loan balance.
Although the underwriting process for consumer loans includes a comparison of the value of the
security, if any, to the proposed loan amount, we cannot predict the extent to which the borrowers
ability to pay, and the value of the security, will be affected by prevailing economic and other
conditions. Real Estate Loans.  We will make commercial real estate loans, construction and development
loans, and residential real estate loans. These loans will include some commercial loans where we
will take a security interest in real estate out of an abundance of caution and not as the
principal collateral for the loan, but will exclude home equity loans, which are classified as
consumer loans.    Commercial Real Estate.  Our commercial real estate loan terms are generally
will be limited to five years or less, although payments may be structured on a longer
amortization basis. Interest rates may be fixed or adjustable, with an origination fee
generally being charged on each loan funded. We will attempt to reduce credit risk on our
commercial real estate loans by emphasizing loans on owner-occupied office and retail
buildings where the ratio of the loan principal to the value of the collateral as
established by independent appraisal does not exceed 80.0%. We will also project minimum
levels of net projected cash flow available for debt service based on the type of loan. In
addition, we may require personal guarantees from the principal owners of the property
supported by a review by our management of the principal owners personal financial
statements. Risks associated with commercial real estate loans include fluctuations in the
value of real estate, new job creation trends, tenant vacancy rates and the quality of the
borrowers management. We will attempt to limit our risk by analyzing borrowers cash flow
and collateral value on an ongoing basis.    Construction and Development Loans.  Our construction and development loans
will be made both on a pre-sold and speculative basis. If the borrower has entered into an
agreement to sell the property prior to beginning construction, then the loan is considered
to be on a pre-sold basis. If the borrower has not entered into an agreement to sell the
property prior to beginning construction, then the loan is considered to be on a speculative
basis. Construction and development loans are generally made with a term of nine months and
interest is paid periodically. The ratio of the loan principal to the value of the 5




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collateral as established by independent appraisal will not generally exceed 80.0%.
Additionally, speculative loans will be based on the borrowers financial strength and cash
flow position. Loan proceeds will be disbursed based on the percentage of completion and
only after the project has been inspected by an experienced construction lender or
appraiser. Risks associated with construction loans include fluctuations in the value of
real estate and new job creation trends.    Residential Real Estate.  Our residential real estate loans will consist of
residential first and second mortgage loans and residential construction loans. We will
offer fixed and variable rates on our mortgages with the amortization of first mortgages
with maturity dates of three years and beyond. These loans will be made consistent with our
appraisal policy and with the ratio of the loan principal to the value of collateral as
established by independent appraisal generally not to exceed 80.0%. We expect these loan to
value ratios will be sufficient to compensate for fluctuations in real estate market value
and to minimize losses that could result from a downturn in the residential real estate
market. Commercial Loans.  A primary component of our loan portfolio will be loans for commercial
purposes. Our commercial loan portfolio is expected to consist of loans principally to retail
trade, service and manufacturing firms located in our primary service area. The terms of these
loans will vary by purpose and by type of underlying collateral, if any. We will typically make
equipment loans for a term of seven years or less at fixed or variable rates, with the loan fully
amortized over the term. Equipment loans generally will be secured by the financed equipment, and
the ratio of the loan principal to the value of the financed equipment or other collateral will
generally be 75.0% or less. Loans to support working capital will typically have terms not
exceeding one year and will usually be secured by accounts receivable, inventory, or other
collateral, as well as personal guarantees of the principals of the business. For loans secured by
accounts receivable or inventory, principal will typically be repaid as the assets securing the
loan are converted into cash, and for loans secured with other types of collateral, principal will
typically be due at maturity. The quality of the commercial borrowers management and its ability
both to evaluate properly changes in the supply and demand characteristics for its products and
services and to respond effectively to such changes are significant factors in a commercial
borrowers creditworthiness. Consumer Loans.  We will make a variety of loans to individuals for personal, family and
household purposes, including secured and unsecured installment and term loans, home equity loans
and home equity lines of credit. Consumer loan repayments depend upon the borrowers financial
stability and are more likely to be adversely affected by divorce, job loss, illness and personal
hardships. Because many consumer loans are secured by depreciable assets such as boats, cars, and
trailers, the loan should be amortized over the useful life of the asset. The borrower will
generally be required to be employed for at least 12 months prior to obtaining the loan. The loan
officer will review the borrowers past credit history, past income level, debt history and, when
applicable, cash flow and determine the impact of all these factors on the ability of the borrower
to make future payments as agreed. Consumer loans will generally be made at a fixed rate of
interest. Deposit Services We will seek to establish solid core deposits, including checking accounts, money market
accounts, savings accounts, a variety of certificates of deposit and IRA accounts. To attract
deposits, we will employ an aggressive marketing plan in our two primary service areas and feature
a broad product line and competitive services. The primary sources of deposits will be residents
of, and businesses and their employees located in, our two primary service areas. We plan to
obtain these deposits through personal solicitation by our officers and directors, direct mail
solicitations and advertisements in the local media. In order to attract our initial deposit base,
we may offer higher interest rates on various deposit accounts. Other Banking Services Other anticipated bank services include overdraft protection, direct deposit, wire transfers,
night depository, safe deposit boxes, travelers checks, debit cards and automatic drafts. We plan
to become associated with a shared network of automated teller machines that our customers will be
able to use throughout Georgia and other regions. We may offer annuities, mutual funds and other
financial services through a third party that has not yet been chosen. We also plan to offer
Mastercard® and VISA® credit card services through a correspondent bank as an
agent for the 6




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bank. We will not exercise trust powers during our early years of operation. We may in the
future offer a full-service trust department, but cannot do so without the prior approval of the
Georgia Department. Marketing and Advertising Our target customers will be the residents and the small  to medium-sized businesses and
their employees located in our two primary service areas. We intend to develop our image as a community-oriented bank with an emphasis on quality
service and personal contact. While we plan to utilize traditional advertising mediums such as
local newspapers and local event sponsorship, we plan to focus our marketing efforts on leveraging
the existing relationships of our directors and management, principally through our formal calling
program. Investments In addition to loans, we will make other investments primarily in obligations of the United
States or obligations guaranteed as to principal and interest by the United States and other
taxable securities. These investments will include U.S. Treasury bills with treasury notes, as
well as investments in securities of federally sponsored agencies, such as Federal Home Loan Bank
bonds. In addition, we may also invest in federal funds, negotiable certificates of deposit,
bankers acceptances, mortgage backed securities, corporate bonds and municipal or other tax-free
bonds. No investment in any of those instruments will exceed any applicable limitation imposed by
law or regulation. Our Investment Committee will review the investment portfolio on an ongoing
basis in order to ensure that the investments conform to our policy as set by our board of
directors. Asset and Liability Management Our Investment Committee will manage our assets and liabilities and will strive to provide an
optimum and stable net interest margin, a profitable after-tax return on assets and return on
equity and adequate liquidity. The committee will conduct these management functions within the
framework of written loan and investment policies that we will adopt. The committee will attempt
to maintain a balanced position between rate sensitive assets and rate sensitive liabilities.
Specifically, it will chart assets and liabilities on a matrix by maturity, effective duration and
interest adjustment period and attempt to manage any gaps in maturity ranges. Employees As of December 31, 2004, we had 4 employees. Georgia Trust Bancshares does not have any
employees who are not also employees of Georgia Trust Bank. 
 SUPERVISION AND REGULATION The following discussion describes the material elements of the regulatory framework that
applies to banks and bank holding companies and provides certain specific information related to
Georgia Trust Bancshares and Georgia Trust Bank. Regulation of Georgia Trust Bancshares Georgia Trust Bancshares is a bank holding company registered with the Federal Reserve under
the Bank Holding Company Act. As a result, Georgia Trust Bancshares and any future non-bank
subsidiaries are subject to the supervision, examination and reporting requirements of the Bank
Holding Company Act and the regulations of the Federal Reserve. Acquisitions.  The Bank Holding Company Act requires every bank holding company to obtain the
prior approval of the Federal Reserve before:  
    it may acquire direct or indirect ownership or control of any voting shares of any
bank if, after such 7




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acquisition, the bank holding company will directly or indirectly own or control more
than 5% of the voting shares of the bank;
    it or any of its subsidiaries, other than a bank, may acquire all or substantially
all the assets of any bank; or
    it may merge or consolidate with any other bank holding company. The Bank Holding Company Act further provides that the Federal Reserve may not approve any
acquisition that would result in monopoly or would be in furtherance of any combination or
conspiracy to monopolize or attempt to monopolize the business of banking in any section of the
United States, or the effect of which may be substantially to lessen competition or to tend to
create a monopoly in any section of the United States, or that in any other manner would be a
restraint of trade, unless the anticompetitive effects of the proposed transaction are clearly
outweighed by the public interest in meeting the convenience and needs of the community to be
served. The Federal Reserve is also required to consider the financial and managerial resources
and future prospects of the bank holding companies and banks concerned and the convenience and
needs of the community to be served. Consideration of financial resources generally focuses on
capital adequacy, which is discussed below. Under the Riegle-Neal Interstate Banking and Branching Efficiency Act, the restrictions on
interstate acquisitions of banks by bank holding companies were repealed. As a result, Georgia
Trust Bancshares and other bank holding companies located in Georgia are able to acquire banks
located in any other state, and bank holding companies located outside of Georgia can acquire any
Georgia-based banks, in either case subject to certain deposit percentage and other restrictions.
The legislation provides that unless an individual state has elected to prohibit out-of-state banks
from operating interstate branches within its territory, adequately capitalized and managed bank
holding companies are able to consolidate their multistate banking operations into a single bank
subsidiary and to branch interstate through acquisitions. De novo branching by an out-of-state
bank is permitted only if it is expressly permitted by the laws of the host state. Georgia does
not permit de novo branching by an out-of-state bank. Therefore, the only method by which an
out-of-state bank or bank holding company may enter Georgia is through an acquisition. Georgia has
adopted an interstate banking statute that removes the existing restrictions on the ability of
banks to branch interstate through mergers, consolidations and acquisitions. However, Georgia law
prohibits a bank holding company from acquiring control of a financial institution until the target
financial institution has been in existence and continuously operating as a bank for three years.
As a result, no bank holding company may acquire control of Georgia Trust Bancshares until after
the third anniversary of Georgia Trust Banks commencement of operations. Activities.  The Bank Holding Company Act has generally prohibited a bank holding company from
engaging in activities other than banking or managing or controlling banks or other permissible
subsidiaries and from acquiring or retaining direct or indirect control of any company engaged in
any activities other than those determined by the Federal Reserve to be closely related to banking
or managing or controlling banks as to be a proper incident thereto. Provisions of the
Gramm-Leach-Bliley Act, discussed below, have expanded the permissible activities of a bank holding
company and its subsidiaries. In determining whether a particular activity is permissible, the
Federal Reserve must consider whether the performance of such an activity can be reasonably
expected to produce benefits to the public, such as a greater convenience, increased competition,
or gains in efficiency, that outweigh possible adverse effects such as undue concentration of
resources, decreased or unfair competition, conflicts of interest, or unsound banking practices. Gramm-Leach-Bliley Act.  The Gramm-Leach-Bliley Act implemented major changes to the statutory
framework for providing banking and other financial services in the United States. The
Gramm-Leach-Bliley Act, among other things, eliminated many of the restrictions on affiliations
among banks and securities firms, insurance firms, and other financial service providers. A bank
holding company that qualifies as a financial holding company will be permitted to engage in
activities that are financial in nature or incident or complimentary to a financial activity. The
activities that the Gramm-Leach-Bliley Act expressly lists as financial in nature include insurance
activities, providing financial and instant advisory services, underwriting securities and limited
merchant banking activities. 8




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To become eligible for these expanded activities, a bank holding company must qualify as a
financial holding company. To qualify as a financial holding company, each insured depository
institution controlled by the bank holding company must be well-capitalized, well-managed, and have
at least a satisfactory rating under the Community Reinvestment Act. In addition, the bank holding
company must file a declaration with the Federal Reserve of its intention to become a financial
holding company. We presently have no plans to become a financial holding company. Although considered to be one of the most significant banking laws since Depression-era
statutes were enacted, because of our small size and recent organization, we do not expect the
Gramm-Leach-Bliley Act to materially affect our initial products, services or other business
activities. We do not believe that the Gramm-Leach-Bliley Act will have a material adverse impact
on our operations. To the extent that it allows banks, securities firms, and insurance firms to
affiliate, the financial services industry may experience further consolidation. The
Gramm-Leach-Bliley Act may have the result of increasing the amount of competition that we face
from larger institutions and other companies offering financial products and services, many of
which may have substantially more financial resources. Support of Subsidiary Institutions.Under Federal Reserve policy, Georgia Trust Bancshares is
expected to act as a source of financial strength for, and to commit resources to support its
banking subsidiaries. This support may be required at times when, absent such Federal Reserve
policy, Georgia Trust Bancshares may not be inclined to provide it. In addition, any capital loans
by a bank holding company to its banking subsidiaries are subordinate in right of payment to
deposits and to certain other indebtedness of such banks. In the event of a bank holding companys
bankruptcy, any commitment by the bank holding company to a federal bank regulatory agency to
maintain the capital of a banking subsidiary will be assumed by the bankruptcy trustee and entitled
to a priority of payment. Regulation of Georgia Trust Bank As a Georgia state chartered bank, Georgia Trust Bank will be examined and regulated by the
FDIC and the Georgia Department. The major functions of the FDIC with respect to insured banks
include paying depositors to the extent provided by law in the event an insured bank is closed
without adequately providing for payment of the claims of depositors, acting as receiver of state
banks placed in receivership when so appointed by state authorities, and preventing the continuance
or development of unsound and unsafe banking practices. In addition, the FDIC also approves
conversions, mergers, consolidations, and assumption of deposit liability transactions between
insured banks and noninsured banks or institutions to prevent capital or surplus diminution in such
transactions where the resulting bank is an uninsured bank. The Georgia Department will regulate all areas of Georgia Trust Banks banking operations,
including mergers, establishment of branches, loans, interest rates, and reserves. Georgia Trust
Bank will also be subject to Georgia banking and usury laws restricting the amount of interest
which it may charge in making loans or other extensions of credit. With respect to expansion,
Georgia law permits, with required regulatory approval, the establishment of de novo branches in an
unlimited number of counties within the State of Georgia by the subsidiary banks of bank holding
companies then engaged in the business of banking in Georgia. Prompt Corrective Action.  The Federal Deposit Insurance Corporation Improvement Act
establishes a system of prompt corrective action to resolve the problems of undercapitalized
institutions. Under this system, the federal banking regulators are required to establish five
capital categories (well capitalized, adequately capitalized, undercapitalized, significantly
undercapitalized, and critically undercapitalized) and are required to take certain mandatory
supervisory actions, and are authorized to take other discretionary actions, with respect to
institutions in the three undercapitalized categories, the severity of which will depend upon the
capital category in which the institution is placed. Generally, subject to a narrow exception, the
banking regulator must appoint a receiver or conservator for an institution that is critically
undercapitalized. The federal banking regulators have specified by regulation the relevant capital
level for each category. An institution that is categorized as undercapitalized, significantly undercapitalized, or
critically 9




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undercapitalized is required to submit an acceptable capital restoration plan to its
appropriate federal banking regulator. A bank holding company must guarantee that a subsidiary
depository institution meets its capital restoration plan, subject to certain limitations. The
obligation of a controlling holding company to fund a capital restoration plan is limited to the
lesser of 5% of an undercapitalized subsidiarys assets or the amount required to meet regulatory
capital requirements. An undercapitalized institution is also 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 appropriate federal banking regulator may treat an
undercapitalized institution in the same manner as it treats significantly undercapitalized
institutions if it determines that those actions are necessary. FDIC Insurance Assessments.  The FDIC adopted a risk-based assessment system for insured
depository institutions that takes into account the risks attributable to different categories and
concentrations of assets and liabilities. The system assigns an institution to one of three
capital categories: (i) well capitalized; (ii) adequately capitalized; and (iii) undercapitalized.
These three categories are substantially similar to the prompt corrective action categories
described above. An institution is also assigned by the FDIC to one of three supervisory subgroups
within each capital group. An institutions insurance assessment rate is then determined based on
the capital category and supervisory category to which it is assigned. Under the final risk-based
assessment system, there are nine assessment risk classifications to which different assessment
rates are applied. Assessments range from 0 to 27 cents per $100 of deposits, depending on the
institutions capital group and supervisory subgroup. The FDIC may terminate its insurance of deposits if it finds that the institution has engaged
in unsafe and unsound practices, is in an unsafe or unsound condition to continue operations, or
has violated any applicable law, regulation, rule, order, or condition imposed by the FDIC. Community Reinvestment Act.  Georgia Trust Bank will be subject to the provisions of the
Community Reinvestment Act, which requires the FDIC, in connection with its regular examination of
a bank, to assess the banks record of meeting the credit needs of the communities it serves,
including low- and moderate-income neighborhoods, consistent with safe and sound banking practices. Regulations promulgated under the CRA are intended to set distinct assessment standards for
financial institutions. The regulations provide for streamlined procedures for institutions with
assets of less than $250 million. The regulations contain the following three evaluation tests:  
    a lending test, which compares the institutions market share of loans in low- and
moderate-income areas to its market share of loans in its entire service area;
    a service test, which evaluates the provision of services that promote the
availability of credit to low- moderate-income areas; and
    an investment test, which evaluates the institutions record of investments in
organizations designed to foster community development, small- and minority-owed
businesses and affordable housing lending, including state and local government housing
or revenue bonds. Institutions are required to make public disclosure of their written CRA evaluations made by
regulatory agencies. This promotes enforcement of CRA requirements by providing the public with
the status of a particular institutions community investment record. In addition to public
disclosure of an institutions CRA assessment, regulatory authorities are required to consider an
institutions CRA assessment when an institution applies for approval to establish a new branch
which will accept deposits, to relocate an existing branch or to merge with another federally
regulated financial institution. Privacy.  The Gramm-Leach-Bliley Act also contains provisions regarding consumer privacy.
These provisions require financial institutions to disclose their policy for collecting and
protecting confidential information. Customers generally may prevent financial institutions from
sharing personal financial information with nonaffiliated third parties, other than third parties
that market the institutions products and services. Additionally, financial 10




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institutions generally may not disclose consumer account numbers to any nonaffiliated third
party for use in telemarketing, direct mail marketing or other marketing through electronic means
to the consumer. Payment of Dividends Georgia Trust Bancshares is a legal entity separate and distinct from Georgia Trust Bank. The
principal sources of revenues to Georgia Trust Bancshares, including cash flow to pay dividends to
its shareholders, are dividends paid from Georgia Trust Bank to Georgia Trust Bancshares. There
are statutory and regulatory limitations on the payment of dividends by the Bank, as well as by
Georgia Trust Bancshares to its shareholders. If, in the opinion of the FDIC, Georgia Trust Bank were engaged in or about to engage in an
unsafe or unsound practice the FDIC may require, after notice and hearing, that such institution
cease and desist from such practice. The federal banking regulators have indicated that paying
dividends that deplete a depository institutions capital base to an inadequate level would be
unsafe and unsound banking practice. Under the Federal Deposit Insurance Corporation Improvement
Act, a depository institution may not pay any dividend if payment would cause it to become
undercapitalized or if it already is undercapitalized. Moreover, the federal banking regulators
have issued policy statements that provide that bank holding companies and insured banks should
generally only pay dividends out of current operating earnings. The payment of dividends by
Georgia Trust Bancshares and its banking subsidiary may also be affected or limited by other
factors, such as the requirement to maintain adequate capital above regulatory guidelines. Georgia law provides additional restrictions on the payment of dividends by Georgia Trust Bank
to Georgia Trust Bancshares. Georgia Trust Bank must have the approval of the Georgia Department
to pay cash dividends, unless at the time of such payment:  
    the total classified assets at the most recent examination of Georgia Trust Bank do
not exceed 80% of tier 1 capital plus allowance for loan losses as reflected at such
examination;
    the aggregate amount of dividends declared or anticipated to be declared in the
calendar year does not exceed 50% of the net profits, after taxes, but before
dividends, for the previous calendar year; and
    the ratio of tier 1 capital to adjusted total assets will not be less than 6%. In light of these regulatory restrictions and the need for us to retain and build capital, the
board of directors of Georgia Trust Bancshares plans to reinvest earnings for the period of time
necessary to support successful operations. As a result, we do not plan to pay dividends until we
recover any losses incurred and become cumulatively profitable, and our future dividend policy
depends on the earnings, capital requirements and financial condition of Georgia Trust Bancshares
and Georgia Trust Bank and on other factors that our board of directors considers relevant. We do
not expect to attain cumulative profitability before our third year of operations, if at all.
Consequently, we do not expect to pay dividends to our shareholder in the near future. Capital Adequacy Georgia Trust Bancshares and Georgia Trust Bank are required to comply with the capital
adequacy standards established by the Federal Reserve, in the case of the company, and the FDIC, in
the case of the bank. The Federal Reserve has established two basic measures of capital adequacy
for bank holding companies: a risk-based measure and a leverage measure. A bank holding company
must satisfy all applicable capital standards to be considered in compliance. The risk-based capital standards are designed to make regulatory capital requirements more
sensitive to differences in risk profiles among banks and bank holding companies, to account for
off-balance sheet exposure, and to minimize disincentives for holding liquid assets. Assets and
off-balance sheet items, such as letters of credit and unfunded loan commitments, are assigned to
broad risk categories, each with appropriate weights. The resulting capital ratios represent
capital as a percentage of total risk-weighted assets and off-balance sheet items. 11




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The minimum guideline for the ratio of total capital to risk-weighted assets is 8%. At least
half of total capital must comprise common stock, minority interests in the equity accounts of
consolidated subsidiaries, noncumulative perpetual preferred stock, and a limited amount of
cumulative perpetual preferred stock, less goodwill and certain other intangible assets, or tier 1
capital. The remainder may consist of subordinated debt, other preferred stock, and a limited
amount of loan loss reserves, or tier 2 capital. In addition, the Federal Reserve has established minimum leverage ratio guidelines for bank
holding companies. These guidelines provide for a minimum ratio of tier 1 capital to average
assets, less goodwill and certain other intangible assets, of 3% for bank holding companies that
meet certain specified criteria, including having the highest regulatory rating. All other bank
holding companies generally are required to maintain a leverage ratio of at least 3%, plus an
additional cushion of 1% to 2%. The guidelines also provide that bank holding companies
experiencing internal growth, as will be the case for Georgia Trust Bancshares, or making
acquisitions will be expected to maintain strong capital positions substantially above the minimum
supervisory levels without significant reliance on intangible assets. Furthermore, the Federal
Reserve has indicated that it will consider a bank holding companys tier 1 capital leverage ratio,
after deducting all intangibles, and other indicators of capital strength in evaluating proposals
for expansion or new activities. Georgia Trust Bank is subject to risk-based and leverage capital requirements adopted by FDIC,
which are substantially similar to those adopted by the Federal Reserve for bank holding companies. Failure to meet 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 above, substantial additional restrictions can be imposed on FDIC-insured depository
institutions that fail to meet applicable capital requirements. Restrictions on Transactions with Affiliates We are subject to the provisions of Section 23A of the Federal Reserve Act. Section 23A
places limits on the amount of:  
    a banks loans or extensions of credit to affiliates;
    a banks investment in affiliates;
    assets a bank may purchase from affiliates, except for real and personal property
exempted by the Federal Reserve;
    the amount of loans or extensions of credit to third parties collateralized by the
securities or obligations of affiliates; and
    a banks guarantee, acceptance or letter of credit issued on behalf of an affiliate. The total amount of the above transactions is limited in amount, as to any one affiliate, to
10% of a banks capital and surplus and, as to all affiliates combined, to 20% of a banks capital
and surplus. In addition to the limitation on the amount of these transactions, each of the above
transactions must also meet specified collateral requirements. Georgia Trust Bank must also comply
with other provisions designed to avoid the making of low-quality loans or investments. 12




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We are also subject to the provisions of Section 23B of the Federal Reserve Act which, among
other things, prohibits an institution from engaging in the above transactions with affiliates
unless the transactions are on terms substantially the same, or at least as favorable to the
institution or its subsidiaries, as those prevailing at the time for comparable transactions with
nonaffiliated companies. Georgia Trust Bank is also subject to restrictions on extensions of credit to its executive
officers, directors, principal shareholders and their related interests. These extensions of
credit (i) must be made on substantially the same terms, including interest rates and collateral,
as those prevailing at the time for comparable transactions with third parties, and (ii) must not
involve more than the normal risk of repayment or present other unfavorable features. Monetary Policy The earnings of Georgia Trust Bank, as well Georgia Trust Bancshares, will be affected by
domestic and foreign conditions (such as the potential war with Iraq), particularly by the monetary
and fiscal policies of the United States government and its agencies. The Federal Reserve has had,
and will continue to have, an important impact on the operating results of commercial banks through
its power to implement national monetary policy in order, among other things, to mitigate
recessionary and inflationary pressures by regulating the national money supply. The techniques
used by the Federal Reserve include setting the reserve requirements of member banks and
establishing the discount rate on member bank borrowings. The Federal Reserve also conducts open
market transactions in United States government securities. 
 Item 2. Properties We expect to begin our banking operations on or about April 25, 2005 in a main office facility
located at 2725 Mall of Georgia Boulevard, Buford, Georgia. In addition, we intend to open a branch facility
located at
TownPark, in Kennesaw, Georgia in the third quarter of 2005. After considering several locations within our primary service areas,
on January 21, 2005, we purchased the land on which we expect to construct our Gwinnett County
facility for $1,400,000. The purchase price for the property was funded with a portion of the net
proceeds from the offering. We expect to begin construction of this facility in the second quarter of
2005, with completion anticipated in the fourth quarter of 2005. The purchase price for the property
was based on our organizers collective knowledge of the Gwinnett County real estate market. On March 18, 2005, we entered into a purchase agreement for property located at
TownPark, in Kennesaw, Georgia, which will be the site for our Cobb County facility. The purchase
price will be $742,000. Our office facility in Cobb County will consist of a two-story building of
approximately 11,500 square feet. The bank plans to occupy the first floor and lease out the
second floor until needed. The estimated cost to build and furnish the building is $1,350,000. We expect to begin construction
of this facility in the third quarter of 2005 with completion anticipated in the first quarter of 2006. Until construction of our two permanent
facilities are completed, we will operate out of temporary modular facilities at both of our locations. 
 Item 3. Legal Proceedings As of the date of this Report, there were no legal proceedings to which we, or any of our
properties, were subject. 
 Item 4. Submission of Matters to a Vote of Security Holders. Not applicable. 13




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PART II 
 Item 5. Market for Common Equity and Related Stockholder Matters A.    Market Information (i)    Market for Common Equity.There is no established trading market for the common stock of
Georgia Trust Bancshares, and an active public trading market is not expected to develop in the
near future. (ii)   Holders of Common Stock.As of March 28, 2005, there were 497 record holders of the
common stock of Georgia Trust Bancshares. (iii)  Dividends.To date, we have not paid any dividends on the common stock of Georgia Trust
Bancshares. Georgia Trust Bancshares has no source of income other than dividends that Georgia
Trust Bank pays to it. Our ability to pay dividends to our shareholders will therefore depend on
Georgia Trust Banks ability to pay dividends to Georgia Trust Bancshares. In the future, Georgia
Trust Bancshares may begin income-producing operations independent from those of Georgia Trust
Bank, which may provide another source of income from which we could pay dividends to our
shareholders. However, we can give you no assurance as to when, if at all, these operations may
begin or whether they will be profitable. Bank holding companies are subject to significant regulatory restrictions on the payment of
cash dividends. In light of these restrictions and the need for us to retain and build capital,
the board of directors of Georgia Trust Bancshares plans to reinvest earnings for the period of
time necessary to support successful operations. As a result, we do not plan to pay dividends
until we recover any losses incurred and become profitable, and our future dividend policy depends
on the earnings, capital requirements and financial condition of Georgia Trust Bancshares and
Georgia Trust Bank and on other factors that our board of directors considers relevant. Additionally, regulatory authorities may determine, under circumstances relating to the
financial condition of Georgia Trust Bancshares or Georgia Trust Bank, that the payment of
dividends would be an unsafe or unsound practice and may prohibit dividend payment. See Item 1.
Description of Business  Supervision and Regulation  Payment of Dividends. B.    Recent Sales of Unregistered Securities; Use of Proceeds from Sales of Registered Securities On June 16, 2004, we issued to J. Michael Allen, our president and chief executive officer, in
a private placement, 10 shares of our common stock, $1.00 par value per share, for a price of
$10.00 per share in connection with our organization. The sale to Mr. Allen was exempt from
registration under the Securities Act of 1933, as amended (the Act) pursuant to Section 4(2) of
the Act because it was a transaction by an issuer that did not involve a public offering. On October 7, 2004, we commenced an initial public offering of a minimum of 1,060,000 shares
and a maximum of 1,500,000 shares of common stock, par value $1.00 per share, of Georgia Trust
Bancshares, at an offering price of $10.00 per share. The minimum aggregate offering price of the
securities registered was $10,600,000 and the maximum aggregate offering price of the securities
registered was $15,000,000. The shares in the offering were registered under the Securities Act of
1933, as amended, pursuant to an effective Registration Statement on Form SB-2 (the Registration
Statement, registration number 333-116852). The Registration Statement was declared effective by
the Securities and Exchange Commission (the SEC) on October 7, 2004. The offering commenced on
October 7, 2004. On January 12, 2005, J. Michael Allen, L. Myron Cantrell and Marvin Tibbetts,
III, three of Georgia Trust Bancshares organizers subscribed to purchase an additional 5,000,
10,000 and 4,000 shares, respectively, of our common stock. Georgia Trust Bancshares filed a
registration statement pursuant to Rule 462(b) under the Securities Act, to register the warrants
and the additional shares of common stock issuable upon conversion of the warrants that these
organizers will receive in connection with their purchase of the additional shares of common stock.
Additionally, on January 20, 2005, to accommodate increased interest in the offering, 14




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Georgia Trust Bancshares increased its maximum offering amount to $18,000,000 and registered
an additional 300,000 shares of common stock pursuant to Rule 462(b) of the Securities Act. Prior to January 21, 2004, all subscription funds tendered were being deposited in an
interest-bearing escrow account with Nexity Bank. As of January 21, 2005, the minimum number of
shares to be sold in the offering had been attained. Accordingly, on January 21, 2005, the escrow
agent for the offering released the subscription funds to Georgia Trust Bancshares. After January
21, 2005, all subscription funds tendered were deposited directly with us and were immediately
available for use by us. We completed the offering on March 11, 2005, selling the full $18,000,000
in common stock offered. We had expenses in connection with the offering of approximately $74,100. The net proceeds of
the offering were $17,925,900 None of the estimated expenses in connection with the offering were
paid directly or indirectly to any director, officer, general partner of Georgia Trust Bancshares
or their associates, persons owning 10% or more of any class of equity securities of Georgia Trust
Bancshares, or any affiliate. With the prior approval of the Federal Reserve and the Georgia Department, on March 1, 2005
Georgia Trust Bancshares used $12,500,000 of the net proceeds of the offering to capitalize Georgia
Trust Bank. In return, Georgia Trust Bank issued all of its common stock to Georgia Trust
Bancshares, and Georgia Trust Bancshares became the banks sole shareholder. Georgia Trust
Bancshares will use the remainder of the net proceeds of the offering for working capital purposes. As described above, we used $12,500,000 of the net proceeds of the offering to capitalize
Georgia Trust Bank, $600,000 of the net proceeds to repay amounts outstanding on our organizing
line of credit, and $1,400,000 to purchase the site for the banks initial main office facility in
Gwinnett County. We are using the remaining net proceeds of the offering to construct, furnish and equip our
permanent main office facility in Gwinnett County and to furnish and equip our Cobb County
facility, and for working capital purposes. Except as described above, none of the net proceeds of the offering will be paid directly or
indirectly to any director, officer, general partner of Georgia Trust Bancshares or their
associates, persons owning 10% or more of any class of equity securities of Georgia Trust
Bancshares, or an affiliate of Georgia Trust Bancshares. 15




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Item 6. Managements Discussion and Analysis of Financial Condition and Plan of Operations The purpose of the following discussion is to address information relating to the financial
condition and results of operations of Georgia Trust Bancshares that may not be readily apparent
from the consolidated financial statements and notes thereto, which begin on page F-1 of this
Report. This discussion should be read in conjunction with the information provided our
consolidated financial statements and notes thereto. General We were in the development stage during the last fiscal year and will remain in that stage
until we begin our banking operations on or about April 25, 2005. Georgia Trust Bancshares was
incorporated on May 20, 2004 to serve as a holding company for Georgia Trust Bank. During the
fiscal year ended December 31, 2004, our main activities were:  
    seeking, interviewing and selecting our officers;
    preparing our business plan;
    applying for a state bank charter under the laws of the State of Georgia;
    applying for FDIC deposit insurance;
    applying to become a bank holding company;
    identifying the sites for our banking facilities; and
    raising equity capital through an initial public offering. On October 7, 2005, we began an initial public offering of a minimum of 1,060,000 shares and a
maximum of 1,500,000 shares of the common stock of Georgia Trust Bancshares. On March 11, 2005, we
completed our offering raising $18,000,000 by issuing 1,800,000 shares of our common stock in the
offering. Financial Results From February 25, 2004, the date we began our organizational activities, through December 31,
2004, our net loss amounted to $425,274. Our financial statements and related notes, which are
included in this Report, provide additional information relating to the discussion of our financial
condition. See Index to Financial Report on page F-1. We expect to complete our organizational activities and begin banking operations on or about
April 25, 2005. We will incur substantial expenses in establishing Georgia Trust Bank as a going
concern, and we can give you no assurance that we will be profitable or that future earnings, if
any, will meet the levels prevailing in the banking industry. Typically new banks are not
profitable in their first year of banking operations and, in some cases are not profitable for
several years. Our future results will be determined primarily by our ability to manage
effectively interest income and expense, to minimize loan and investment losses, to generate
non-interest income, and to control non-interest expenses. Since interest rates will be determined
by market forces and economic conditions beyond our control, our ability to generate net interest
income will be dependent upon our ability to maintain an adequate spread between the rate earned on
earning assets, such as loans and investment securities, and the rate paid on interest-bearing
liabilities, such as deposits and borrowing. 16




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Liquidity and Interest Rate Sensitivity Organizational Period.  During our organizational period, our cash requirements consisted
principally of funding our pre-opening expenses, described above, as well as capital expenditures
for the purchase, construction, furnishing and equipping of our initial Gwinnett County main office
facility. From February 25, 2004 through January 21, 2005, our pre-opening expenses were funded through
an organizing line of credit from Nexity Bank. The total amount available on the line of credit
was $600,000, of which $494,000 was outstanding at December 31, 2004. Each of our 10 organizers
guaranteed the full amount of this loan, which bore interest at 1.0% less than the prime rate as
published in the Money Rates section of The Wall Street Journal. On January 21, 2005, we repaid
the outstanding balance on the line of credit of $600,000 by using a
portion of the proceeds from our
initial public offering. In addition, during our organizational period, we purchased a property in which we expect to
construct our Gwinnett County banking facility, for a purchase price of $1,400,000. We expect that
the costs of constructing, furnishing and equipping our Gwinnett County permanent office to be
$2,000,000. We expect to incur estimated costs of $2,100,000 to purchase, furnish and equip our
Cobb County facility. We will use a portion of the net proceeds from
our initial public offering to fund the
purchase, furnishing and equipping of our Cobb County facility. Commencement of Banking Operations.  Since we were in the development stage as of
December 31, 2004, there are no operating results to present at this time. Nevertheless, now that
we have begun our banking operations, net interest income, our primary source of earnings, will
fluctuate with significant interest rate movements. To lessen the impact of these margin swings,
we intend to structure our balance sheet so we will have regular opportunities to reprice or
change the interest rates on our interest-bearing assets and liabilities. Imbalance in these
repricing opportunities at any point in time constitutes interest rate sensitivity. Interest rate sensitivity refers to the responsiveness of interest-bearing assets and
liabilities to changes in market interest rates. The rate sensitive position, or gap, is the
difference in the volume of rate sensitive assets and liabilities at a given time interval. The
general objective of gap management is to actively manage rate sensitive assets and liabilities in
order to reduce the impact of interest rate fluctuations on the net interest margin. We will
generally attempt to maintain a balance between rate sensitive assets and liabilities as the
exposure period is lengthened to minimize our overall interest rate risks. We will evaluate regularly our balance sheets asset mix in terms of several variables,
including yield, credit quality, appropriate funding sources and liquidity. To effectively manage
our balance sheets liability mix, we plan to focus on expanding our deposit base and converting
assets to cash as necessary. As we continue to grow, we will restructure our rate sensitivity position in an effort to
hedge against rapidly rising or falling interest rates. Our Investment Committee will meet on a
quarterly basis to develop a strategy for the upcoming period. For an operating bank, liquidity represents the ability to provide steady sources of funds for
loan commitments and investment activities, as well as to maintain sufficient funds to cover
deposit withdrawals and payment of debt and operating obligations. Initially, we expect that a
portion of the net proceeds of the offering will be available for working capital purposes and will
provide funds for these purposes. In addition, we can obtain these funds by converting assets to
cash or by attracting new deposits. Through our banking operations, our ability to maintain and
increase deposits will serve as our primary source of liquidity. To provide additional sources of
liquidity, we plan to maintain a federal funds borrowed line of credit with one or more
correspondent banks and to apply for membership to the Federal Home Loan Bank of Atlanta. 17




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Permanent
Main Office and Branch Facilities.  On July 14, 2004, we entered into an agreement to acquire a
site for our Gwinnett County main office facility. On January 21, 2005, we closed on the purchase
of the Gwinnett County facility when the subscription funds were released from the escrow account.
We expect to begin construction of our Gwinnett County facility in
the second quarter of 2005, with
completion anticipated in the fourth quarter of 2005. Our permanent main office facility in Gwinnett
County will consist of approximately 13,000 square feet. The estimated costs of constructing our
permanent main office facility are $2,000,000. On March 18, 2005, we entered into an agreement to
acquire a site for our Cobb County office facility. We expect to begin construction of our Cobb
County facility in the third quarter of 2005, with completion
anticipated in the first quarter of 2006.
Our permanent office facility in Cobb County will consist of approximately 11,500 square feet.
The estimated costs of constructing our permanent Cobb office are $1,350,000. We will operate our
banking facilities from modular units located at the same address of our permanent facility until
our permanent office in Gwinnett County and Cobb County are constructed. Other than the initial public offering and as discussed above, we know of no trends, demands,
commitments, events or uncertainties that should result in, or are reasonably likely to result in,
our liquidity increasing or decreasing in any material way in the foreseeable future. Capital Adequacy There are now two primary measures of capital adequacy for banks and bank holding companies:
(i) risk-based capital guidelines and (ii) the leverage ratio. The risk-based capital guidelines measure the amount of a banks required capital in relation
to the degree of risk perceived in its assets and its off-balance sheet items. Under the
risk-based capital guidelines, capital is divided into two tiers. Tier 1 capital consists of
common shareholders equity, noncumulative and cumulative perpetual preferred stock, and minority
interests. Goodwill is subtracted from the total. Tier 2 capital consists of the allowance for
loan losses, hybrid capital instruments, term subordinated debt and intermediate term preferred
stock. Banks are required to maintain a minimum risk-based capital ratio of 8%, with at least 4%
consisting of tier 1 capital. The second measure of capital adequacy relates to the leverage ratio. The FDIC has
established a 3% minimum leverage ratio requirement. The leverage ratio is computed by dividing
tier 1 capital into total assets. In the case of Georgia Trust Bank and other banks that are
experiencing growth or have not received the highest regulatory rating from their primary
regulator, the minimum leverage ratio should be 3% plus an additional cushion of at least 1% to 2%,
depending upon risk profiles and other factors. We
believe that the net proceeds from our initial public offering will satisfy our capital requirements for at
least the next 12 months following the opening of Georgia Trust Bank. We believe all anticipated
material expenditures for this period have been identified and provided for out of the proceeds of
the initial public offering. For additional information about our plan of operations, see Item 1.
Description of Business. 
 Item 7. Financial Statements The financial statements of Georgia Trust Bancshares, including notes thereto,
and the report of the independent registered public accounting firm are included in this Report beginning at
page F-1 and are incorporated herein by reference. 
 Item 8. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure There has been no occurrence requiring a response to this Item. 
 Item 8A. Controls and Procedures 18




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As of the end of the period covered by this report, we carried out an evaluation, under the
supervision and with the participation of our management, including our Chief Executive Officer and
Chief Financial Officer, of the effectiveness of our disclosure controls and procedures as defined
in Exchange Act Rule 13a-15(e). Based upon that evaluation, our Chief Executive Officer and Chief
Financial Officer have concluded that our current disclosure controls and procedures are effective
as of December 31, 2004. There have been no significant changes in our internal controls over
financial reporting during the fourth fiscal quarter ended December 31, 2004 that have materially
affected, or are reasonably likely to materially affect, our internal controls over financial
reporting. The design of any system of controls and procedures is based in part upon certain assumptions
about the likelihood of future events. There can be no assurance that any design will succeed in
achieving its stated goals under all potential future conditions, regardless of how remote. 
 Item 8B. Other Information There has been no occurrence requiring a response to this Item. 
 PART III 
 Item 9. Directors and Executive Officers of the Registrant With the exception of L. Myron Cantrell, each person listed below has been a director of
Georgia Trust Bancshares since its inception. Mr. Cantrell became a director of Georgia Trust
Bancshares on June 28, 2004. Directors of Georgia Trust Bancshares serve staggered terms, which
means that one-third of the directors are elected each year at our annual meeting of shareholders.
The initial term of the Class I directors expires in 2005, the initial term of the Class II
directors expires in 2006 and the initial term of the Class III directors expires in 2007.
Thereafter, each director will serve for a term of three years. Our officers are appointed by the
Board of Directors and hold office at the will of the Board of Directors. Ronald
D. Adamson,age 52, has served as a director of Georgia Trust Bancshares since
its inception and is a proposed director of Georgia Trust Bank. He is President of R. D. Adamson
Construction Co., Inc. Mr. Adamson attended Georgia State University and the University of Georgia
where he received a BBA. Mr. Adamson is a member of the Cannon United Methodist Church, Georgia
Home Builders Association and Kappa Sigma Alumni Association. J. Michael
Allen,age 48, has served as chief executive officer, president and director of
Georgia Trust Bancshares since its inception and is a proposed director of Georgia Trust Bank. He
was a Senior Vice President with BB&T in Gainesville, Georgia and has been employed with BB&T since
1998. Mr. Allen attended Georgia College and State University from 1976  1978 where he received a
B. B. A. Mr. Allen attended Georgia College and State University in 1980  1982 where he received
an M. B. A. and attended the LSU Graduate School of Banking from 1989  1991 where he received a
Certificate of Completion. Mr. Allen is a member of the Lakewood Baptist Church of Gainesville,
Gainesville Rotary Club, has numerous involvements with the Hall County, Gainesville Chamber of
Commerce and served in numerous capacities with the United Way. Mr. Allen is a member of the
Northeast Georgia Health Systems, Inc., Arbor Circle and Annual Fund Drive for NEGA Health System
Foundation. He is a life member of Delta Sigma Pi, past member of North Hall High School Council,
past President of North Hall Middle School PTO, past President of Lanier Elementary School PTO and
also service in several capacities for Timberwalk Homeowners Association including past President
and now serving as Secretary. L. Myron Cantrell,age 60, has served as a director of Georgia Trust Bancshares since June
28, 2004 and is a proposed director of Georgia Trust Bank. Mr. Cantrell is a shareholder and
managing partner of Cantrell and Associates P.C., Certified Public Accountants. He has 32 years
experience in accounting. Mr. Cantrell graduated from the University of Georgia in 1968, where he
played baseball for two years. He is a member of the American Institute of CPAs and The Georgia
Society of CPAs. Mr. Cantrell was an organizer and director of Westside Bank and Trust Co. where
he served as Chairman of the Audit Committee, member of the Loan Committee and the Executive
Committee. Mr. Cantrell has been active in the Kennesaw community for many years and is a member
of Kennesaw United Methodist Church. J. Dave DeVenny,age 57, has served as the chief financial officer of Georgia Trust
Bancshares since August 30, 2004. Mr. DeVenny began his association with banking in 1970 as an
examiner with the Georgia Department of Banking & Finance. In 1973, he started his banking career
with the First National Bank in Madison, Georgia. He has served with three 19




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other banks in Georgia, most recently as Senior Vice President and CFO of The Community Bank,
Loganville, Georgia. Mr. DeVenny is a graduate of the Georgia Institute of Technology, receiving a
Bachelor of Science degree in Management. He has also completed the programs at The Georgia
Banking School and The School for Bank Administration in Madison, Wisconsin. Mr. DeVenny has
served as President of the Northeast Georgia Chapter of the Bank Administration Institute and as
Vice President of the Executive Board of the Georgia Association of Mortgage Brokers. Mr.
DeVennys civic activities include having served as president of the Madison Kiwanis Club and the
South Hall Rotary Club. He has also served on the board of the Quinlan Art Center in Gainesville
and has worked with the Morgan Co. March of Dimes and the Gainesville College Foundation. Most
recently, Mr. DeVenny has been working with the American Red Cross in providing portable
defibrillators to schools in Walton County. He and his wife are members of First Baptist Church in
Gainesville. Michael
L. Jordan,age 46, has served as a director of Georgia Trust Bancshares since its
inception and is a proposed director of Georgia Trust Bank. Mr. Jordan is currently the owner of
Dream Marine of Lake Lanier, a watercraft distributor. A life long resident of Gwinnett County,
Mr. Jordan attended Liberty Baptist College in Lynchburg, Virginia where he played football. After
college, Mr. Jordan worked in the automobile industry and joined Stone Mountain Ford where he
ascended to the role of general manager. In 1987, Mr. Jordan partnered with Mr. Smith to form
Smith-Jordan Partnership and together they purchased Heritage Lincoln-Mercury in Snellville
Georgia. Mr. Jordan was Vice-President and General Manager of Heritage Lincoln-Mercury until it
was sold in December 2000. He has been active in the community, coaching little league baseball
and football and is a member of Smoke Rise Baptist Church and is involved in youth activities at
Hebron Baptist Church. Charles
D. Robinson,age 56, has served as a director of Georgia Trust Bancshares since its
inception and is a proposed director of Georgia Trust Bank. He is the owner of SnelIville Auto
Center, Centerville Auto Center (both centers voted Best of Gwinnett), and Buddys Locksmith
located in Snellville, Georgia. He received his B.S. Degree in Business Administration from
Western Carolina University in 1970. Mr. Robinson attends Annistown Road Baptist Church, is a
member of the Governors High School Council for Shiloh High School, a director for the Highway 78
Merchants Association, a director for the Highway 78 Community Improvement District, serves on the
Gwinnett County Revitalization Council for Highway 78, a past director for Eastside Bank, serving
on the Audit Committee, CRA Committee, and Chairman of the Business Develop Committee. William
E. Smith,age 53, has served as a director of Georgia Trust Bancshares since its
inception and is a proposed director of Georgia Trust Bank. Mr. Smith served as President of Stone
Mountain Ford and Heritage Lincoln Mercury until the businesses were sold in December of 2000.
During his thirty years in the automobile business, Mr. Smith served in various capacities as
Chairman of the Ford Dealers Advertising Association, Chairman of the Metro Atlanta Automobile
Dealers Association, Chairman of the Georgia Automobile Dealers Association and on the Board of
Trustees of the GADA Self-Insured Workers Compensation Trust Fund. Mr. Smith is an active member
of the Smoke Rise Baptist Church where he has served as Deacon, Sunday school teacher and has held
various committee assignments. Mr. Smith is currently involved in various real estate ventures and
is a partner with Michael Jordan in Smith-Jordan Partnership, LLC. Mr. Smith was one of the
original organizers of Eastside Bank in Snellville and served that organization as a Director,
Chairman of the Asset/Liability Committee, Chairman of the Audit Committee, Member of the Executive
Loan Committee and Vice-Chairman of the bank. Mr. Smith received his Bachelors in Business
Administration in Finance from Georgia State University in 1984 and an MBA from Georgia State in
1986. Mr. Smith is a resident of Gwinnett County. Marvin
Tibbetts, III,age 42, has served as a director of Georgia Trust Bancshares since
its inception and is a proposed director of Georgia Trust Bank. Mr. Tibbetts has served as
CEO/President of Tibs Group, Inc. since 1994, a family owned business, which is a single source
provider of electrical, technology, power quality and security services and solutions. Mr. Tibbetts
graduated from the University of West Georgia with a business degree in 1985. In 2003, the
Gwinnett Chamber of Commerce selected Mr. Tibbetts as Small Business Person of the Year. In 2002,
the Atlanta IEC chapter recognized him for his contributions to the IEC by naming him Member of the
Year for 2002 for the Atlanta Independent Electrical Contractors (IEC) Chapter. Mr. Tibbetts also
served as an IEC board member and is a member and Registered Communication Distribution Designer
(RCDD) with BICSI International. Also active in the local community, Mr. Tibbetts serves on the
Board of Directors for Gwinnett Chamber of Commerce, on the Executive Foundation for Gwinnett
Technology College, as well as the City of Suwanees Open Space Planning Committee. Mr. Tibbetts
is a member of the Lawrenceville United Methodist Church and is co-chairman of the churchs
campground committee. James
J. Tidwell,age 65, has served as a director of Georgia Trust Bancshares since its
inception and is a proposed director of Georgia Trust Bank. Mr. Tidwell is the former owner of Jim
Tidwell Ford in Kennesaw, Georgia. Currently, he is a partner in Mike Bell Chevrolet in Carrolton,
Georgia and Liberty Chevrolet in Villa Rica, Georgia. Mr. Tidwell is also a partner in the fully
automated Four Seasons Car Wash. Mr. Tidwell attended Georgia State University. Mr. Tidwell has
served on the board of the Georgia Automobile Dealers Association and has for many years, served on
the Board of Trustees of Greater Atlanta Christian School. Mr. Tidwell was an organizer of
Westside Bank, where he served as director, Chairman of the Loan Committee and Vice-Chairman of
the Board of Directors. Mr. Tidwell is an elder of East Cobb Church of Christ. 20




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Michael E. Townsend,age 54, has served as a director of Georgia Trust Bancshares since its
inception and is a proposed director of Georgia Trust Bank. Mr. Townsend is Owner and Managing
Partner of McMullan and Company, Certified Public Accountants, which was founded in 1970. Mr.
Townsend graduated from Georgia State University in 1972 and has been a Certified Public Accountant
for over 30 years. Mr. Townsend is a member of the American Association of Certified Public
Accountants, the Georgia Society of Certified Public Accountants, and he is the past Southeast
Regional Coordinator of the National Associated CPA Firms. Mr. Townsend is a member of Perimeter
Church and a founding member of the Board of Directors of Providence Christian Academy, Inc. Mr.
Townsend currently is Treasurer and Chairman of the Finance Committee, the Development Committee
and the Executive Committee of the Perimeter Church. Mr. Townsend is president of the Evansmill
Townhomes Owners Association and the Chairman of the Finance Committee for the University Yacht
Club. Mr. Townsend has also served as a member of the Board of Trustees of Georgia State
University Athletic Association, on the Board of Directors and Treasurer of Hidden Acres Park, Inc. Committees of the Boards of Directors We have established the following committees. Other committees may be established as needed
once we begin banking operations. In the future, we expect to add additional members to each of
our committees. Audit, Compliance and CRA Committee.Our Audit, Compliance and CRA Committee will recommend
to the board of directors the independent public accountants to be selected to audit our annual
financial statements and will approve any special assignments given to the independent public
accountants. The committee will also review the planned scope of the annual audit, any changes in
accounting principles and the effectiveness and efficiency of our internal accounting staff.
Additionally, the committee will provide oversight to our compliance staff for adherence with
regulatory rules and regulations, including the Community Reinvestment Act. The committee will
also establish appropriate levels of directors and officers insurance and blanket bond insurance.
The members of the committee will include Messrs. Townsend (Chairman), Cantrell, Robinson, and
Smith. Building/Site Committee.Our Building/Site Committee will be responsible for oversight of all
activities relating to the purchase, construction and improvement our banking facilities. The
members of the committee will include Messrs. Allen (Chairman), Jordan, Adamson, Smith and
Tidwell. Business Marketing and Technology Committee.Our Business Marketing and Technology Committee
will develop, implement and monitor our director/officer development program and monitor and
evaluate its success and its impact on projected growth levels at the bank. In addition, the
committee will be responsible for product design and development. The members of the committee
will include Messrs. Tibbetts (Chairman), Robinson, Adamson, Jordan, Allen and Cantrell. Executive Committee.Our Executive Committee will be authorized, between meetings of the
board of directors, to perform all duties and exercise all authority of the board of directors,
except for those duties and authorities specifically granted to other committees of the board of
directors are which are exclusively reserved for the full board of directors. The committee will
make recommendations to the board of directors regarding matters important to the overall
management and expansion of Georgia Trust Bancshares and Georgia Trust Bank. The members of the
committee will include Messrs. Smith (Chairman), Townsend, Allen, Tibbetts, Robinson and Tidwell. Asset/Liability/Investment Committee.Our Asset/Liability/Investment Committee will have
responsibility for our overall investment strategy. This will include liquidity management, risk
management, and net interest margin management, as well as monitoring of deposit level trends and
pricing, asset level trends and pricing and portfolio investment decisions. In addition, the
committee will work closely with the board of directors to plan annual budgets and develop three to
five year strategic plans. The members of the committee will include Messrs. Tidwell (Chairman),
Townsend, Cantrell, Allen and Smith. Loan Committee.Our Loan Committee will review any loan request made by a potential borrower
over $200,000 for compliance with our lending policies and federal and state rules and regulations
governing extensions of credit. After making this review, the committee will decide whether to
extend credit to the potential borrower. In addition, the committee will have the responsibility
for establishing and approving, in conjunction with management, all major policies and procedures
pertaining to loan policy. The committee will also review all past due reports, non-accrual
reports, and other indicators of overall loan portfolio quality, and will establish measurements
for determining the adequacy of our loan loss reserve. The members of the committee will include
Messrs. Smith (Chairman), Allen (non-voting member), Adamson and Jordan. Compensation Committee.Our Compensation Committee will establish compensation levels for
officers of Georgia Trust Bancshares and Georgia Trust Bank, review management organization and
development, review significant employee benefit programs and establish and administer executive
compensation programs, including the Stock Option Plan described in this prospectus. The committee
will include Messrs. Robinson (Chairman), Cantrell, Smith, Tidwell and Townsend. 21




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Item 10. Executive Compensation We began our organizational activities on February 25, 2004, and consequently, do not have
historical compensation information for the requisite period required to be reported under the
rules promulgated by the Securities and Exchange Commission. Accordingly, the following table
shows information from February 25, 2004 through December 31, 2004 with regard to compensation for
services rendered in all capacities to Georgia Trust Bancshares by our president and chief
executive officer. No other executive officer had an annual salary and bonus that exceeded
$100,000 in 2004. Summary Compensation Table Annual CompensationName and
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other AnnualPrincipal Position
    
    Year
    
    
    Salary ($)
    
    
    Bonus ($)
    
    
    Compensation ($)J. Michael Allen
    
    
    2004
    
    
    $
    95,000
    (1)
    
   -0-
    
    
    
    $6,750(2)President and ChiefExecutive Officer
   (1)
    
    Represents salary from February 25, 2004 through December 31, 2004. Mr. Allen will
continue to be paid at a rate of $10,000 per month until the bank opens for business. See 
Employment Agreement below.(2)
    
    Represents automobile allowances paid from February 25, 2004 through December 31, 2004. Employment Agreement J. Michael Allen.Effective March 10, 2004, we entered into an employment agreement with J.
Michael Allen regarding Mr. Allens employment as president and chief executive officer of Georgia
Trust Bank and Georgia Trust Bancshares. The agreement provides for Mr. Allen to receive a base
salary of $120,000 per year. When Georgia Trust Bank opens for business Mr. Allens base salary
will increase to $135,000 per annum, subject to annual increases in an amount determined by our
board of directors. Mr. Allen will also receive a cash bonus of $15,000 upon the opening of the
Georgia Trust Bank. Thereafter, Mr. Allen will receive cash bonuses based upon our achieving
certain performance levels of criteria as set by our board of directors. The agreement also grants
Mr. Allen stock options to purchase up to 40,000 shares of our common stock with 20% of the shares
vesting on the last day of each of the first five fiscal years of the bank, subject to performance
requirements to be determined by the Board of Directors. Mr. Allen will also receive an automobile
allowance of $750 per month and initiation fees and monthly dues for social clubs and civic clubs
approved by our board of directors. The agreement commenced on March 10, 2004, and continues for a period of three years. At the
end of the initial term of the agreement, and at the end of each year thereafter, the agreement
will be extended for successive three-year periods unless either party notifies the other of his or
its intent not to extend the agreement. Employment may be terminated:  
    by Georgia Trust Bank for cause (as defined in the employment agreement);
    by Mr. Allen if Georgia Trust Bank breaches any material provision of the employment agreement;
    by Georgia Trust Bank or Georgia Trust Bancshares if the effort to organize Georgia Trust Bank is abandoned;
    by Mr. Allen upon 30 days notice; or
    upon Mr. Allens death or disability. If the employment of Mr. Allen is terminated for any reason other than by non-renewal of the
agreement by Georgia Trust Bancshares or Georgia Trust Bank, Mr. Allen will be prohibited from
competing with Georgia Trust Bank or soliciting its customers or employees within a 20-mile radius
of Georgia Trust Banks main office and any branch office of Georgia Trust Bank for up to one year
after the date of termination. In the event of a change in control of Georgia Trust Bancshares, Mr. Allen will be entitled,
for a period of 90 days after the change of control, and at his election, to deliver notice to
Georgia Trust Bancshares of the termination of the employment 22




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agreement, whereupon we will make a lump sum payment to Mr. Allen in an amount equal to 100% of his
then current monthly base salary each month for 12 months after the date of termination, plus any
amounts accrued under a bonus plan and a pro-rata share of any target bonus. In addition, Mr.
Allen will receive this lump sum payment if we terminate his employment without cause or fail to
extend his employment agreement. The current value of the change in control payments payable to Mr.
Allen in the event of a change in control is equal to $120,000. Once Georgia Trust Bank opens for
business, the value of the change in control payments will increase to $135,000. Georgia law
prohibits a change in control for a financial institution during its first three years of
operation. J. Dave DeVenny.On September 16, 2004, our board of directors elected Mr. DeVenny chief
financial officer and secretary of Georgia Trust Bank and Georgia Trust Bancshares. Our employment
arrangement provides for Mr. DeVenny to receive a base salary of $100,000 per year. When Georgia
Trust Bank opens for business, Mr. DeVenny will receive a cash bonus of $5,000 and his base salary
will increase to $106,000 per annum, subject to annual increases in an amount determined by our
board of directors. We also intend to grant Mr. DeVenny stock options to purchase up to 5,000
shares of our common stock with 20% of the shares vesting on the last day of each of the first five
fiscal years of the bank, subject to performance requirements to be determined by the Board of
Directors. On August 4, Danny F. Dukes tendered his resignation from his position as chief financial
officer and secretary of Georgia Trust Bancshares. On August 30, 2004, we hired J. Dave DeVenny as
our new chief financial officer. We do not intend to enter into a written employment agreement with
Mr. DeVenny. Director Compensation The directors of Georgia Trust Bancshares and Georgia Trust Bank will not be compensated
separately for their services as directors until we become cumulatively profitable. Thereafter, we
will adopt compensatory policies for our directors that conform to applicable law. Stock Option Plan General.We have adopted a stock option plan that provides us with the flexibility to grant
the stock incentives described in this section of the prospectus to our key employees, officers,
directors, consultants and advisers for the purpose of giving them a proprietary interest in, and
to encourage them to remain in the employ or service of, Georgia Trust Bancshares and Georgia Trust
Bank. Our board of directors has reserved 270,000 shares of our common stock for issuance
through options that may be granted under the stock option plan. We intend to grant Mr. Allen
and Mr. DeVenny options to acquire
40,000 shares and 5,000 shares, respectively, under the plan. The number of shares reserved for
issuance may change in the event of a stock split, recapitalization or similar event as described
in the plan. Administration.It is expected that a committee of our board of directors, which will be
comprised of at least two non-employee directors, will administer the plan. Our board of directors
will consider the standards contained in both Section 162(m) of the Internal Revenue Code of 1986,
as currently in effect, and Rule 16b-3 under the Securities Exchange Act, when appointing members
to the committee. The committee and our board of directors will have the authority to grant awards
under the plan, to determine the terms of each award, to interpret the provisions of the plan and
to make all other determinations that they may deem necessary or advisable to administer the plan. The plan permits the committee or our board of directors to grant stock options to eligible
persons. Options may be granted on an individual basis or to a group of eligible persons.
Accordingly, the committee or our board of directors will determine, within the limits of the plan,
the number of shares of our common stock subject to an option, to whom an option is granted and the
exercise price and forfeiture or termination provisions of each option. A holder of a stock option
generally may not transfer the option during his or her lifetime. Option Terms.The plan provides for incentive stock options and non-qualified stock options.
The committee or our board of directors will determine whether an option is an incentive stock
option or a non-qualified stock option when it grants the option, and the option will be evidenced
by an agreement describing the material terms of the option. The committee or our board of directors will determine the exercise price of an option. The
exercise price of an incentive stock option may not be less than the fair market value of our
common stock on the date of the grant, or less than 110% of the fair market value if the
participant owns more than 10% of our outstanding common stock. When the incentive stock 23




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option is exercised, we will be entitled to place a legend on the certificates representing
the shares of common stock purchased upon exercise of the option to identify them as shares of
common stock purchased upon the exercise of an incentive stock option. The exercise price of
non-qualified stock options may be greater than, less than or equal to the fair market value of the
common stock on the date that the option is awarded, based upon any reasonable measure of fair
market value. The committee may permit the exercise price to be paid in cash or by the delivery of
previously owned shares of common stock, and, if permitted in the applicable option agreement,
through a cashless exercise executed through a broker or by having a number of shares of common
stock otherwise issuable at the time of exercise withheld. The committee or our board of directors will also determine the term of an option. The term
of an incentive stock option or non-qualified stock option may not exceed ten years from the date
of grant, but any incentive stock option granted to a participant who owns more than 10% of our
outstanding common stock will not be exercisable after the expiration of five years after the date
the option is granted. Subject to any further limitations in the applicable agreement, if a
participants employment terminates, an incentive stock option will terminate and become
unexercisable no later than three months after the date of termination of employment. If, however,
termination of employment is due to death or disability, one year will be substituted for the
three-month period. Incentive stock options are also subject to the further restriction that the
aggregate fair market value, determined as of the date of the grant, of our common stock as to
which any incentive stock option first becomes exercisable in any calendar year is limited to
$10,000 per recipient. If incentive stock options covering more than $100,000 worth of our common
stock first become exercisable in any one calendar year, the excess will be non-qualified options.
For purposes of determining which options, if any, have been granted in excess of the $100,000
limit, options will be considered to become exercisable in the order granted. Change of Control.In the event of a change in control, any outstanding options under the
plan shall be fully vested, non-forfeitable, and become exercisable, as of the date of the change
in control. Termination of Options.The terms of particular options may provide that they terminate,
among other reasons, upon the holders termination of employment or other status with Georgia Trust
Bancshares or Georgia Trust Bank, upon a specified date, upon the holders death or disability, or
upon the occurrence of a change in control of Georgia Trust Bancshares. An agreement may provide
that if the holder dies or becomes disabled, the holders estate or personal representative may
exercise the option. The committee or our board of directors may, within the terms of the plan and
the applicable agreement, cancel, accelerate, pay or continue an option that would otherwise
terminate for the reasons discussed above. Reorganizations.The plan provides for an appropriate adjustment in the number and kind of
shares subject to unexercised options in the event of any change in the outstanding shares of our
common stock by reason of a stock split, stock dividend, combination or reclassification of shares,
recapitalization, merger or similar event. In the event of some types of corporate
reorganizations, the committee or our board of directors may, within the terms of the plan and the
applicable agreement, substitute, cancel, accelerate, cancel for cash or otherwise adjust the terms
of an option. Amendment and Termination of the Plan.Our board of directors has the authority to amend or
terminate the plan. Our board of directors is not required to obtain shareholder approval to
terminate the plan or, generally, to amend the plan, but may condition any amendment or termination
of the plan upon shareholder approval if it determines that shareholder approval is necessary or
appropriate under tax, securities, or other laws. However, any action by our board of directors
may not adversely affect the rights of a holder of a stock option without the holders consent. Federal Income Tax Consequences.The following discussion outlines generally the federal
income tax consequences of participation in the plan. Individual circumstances may vary and each
participant should rely on his or her own tax counsel for advice regarding federal income tax
treatment under the plan.  
    Incentive Stock Options.A participant will not recognize income upon the grant of
an incentive stock option, nor will he or she be taxed when exercising all or a portion
of their option. Instead, the participant will be taxed when he or she sells the
            shares of common stock purchased upon exercise of the incentive stock option. The
participant will be taxed on the difference between the price he or she paid for our
common stock and the amount for which he or she sells the stock. If the participant
does not sell the shares of our common stock prior to two years from the date of grant
of the incentive stock option and one year from the date the stock is transferred to
him or her, the gain will be a capital gain and we will not get a corresponding
deduction. If the participant sells the shares of our common stock at a gain before
that time, the difference between the amount the participant paid for the stock and the
lesser of its fair market value on the date of exercise or the amount for which the
stock is sold will be taxed as ordinary income and we will be entitled to a
corresponding tax deduction. If the participant sells the shares of our common stock
for less than the amount he or she paid for the stock prior to the one- or two-year
period indicated, no amount will be taxed as ordinary income and the loss will be taxed
as a capital loss. Exercise of an incentive stock option may subject a participant to,
or increase a participants liability for, the alternative minimum tax. 24




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
    Non-Qualified Options.A participant will not recognize income upon the grant of a
non-qualified option or at any time before the exercise of the option or a portion of
the option. When the participant exercises a non-qualified option or portion of the
option, he or she will recognize compensation taxable as ordinary income in an amount
equal to the excess of the fair market value of our common stock on the date the option
is exercised over the price paid for the stock, and we will then be entitled to a
corresponding deduction. Depending upon the time period for which shares of our common stock are held after exercising
an option, the sale or other taxable disposition of shares acquired by exercising a non-qualified
option generally will result in a short- or long-term capital gain or loss equal to the difference
between the amount realized on the disposition and the fair market value of such shares when the
non-qualified option was exercised. Special rules apply to a participant who exercises a non-qualified option by paying the
exercise price, in whole or in part, by selling back to us shares of our common stock already held
by the participant and to a participant who is subject to the reporting requirements of Section 16
of the Securities Exchange Act of 1934. Life Insurance We have purchased key man life insurance policy in the amount of $500,000 for Mr. Allen.
Georgia Trust Bancshares is the beneficiary of this policy. 25




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##### Table of Contents



Item 11. Security Ownership of Certain Beneficial Owners and Management The following table sets forth certain information regarding the shares of the Companys
common stock owned as of March 28, 2005, (i) by each person who beneficially owned more than 5% of
the shares of the Companys common stock, (ii) by each of the Companys directors and the Companys
executive officers named in the summary compensation table above, and (iii) by all of the Companys
directors and executive officers as a group. Shares of CommonStock Beneficially
    
    Percentage ofName
    
    Owned
    
    Outstanding SharesRonald D. Adamson
    
    
    50,000
    
    
    
    2.77J. Michael Allen
    
    
    30,000
    
    
    
    1.67L. Myron Cantrell
    
    
    30,000
    
    
    
    1.67J. Dave DeVenny
    
    
    7,500
    
    
    
    *Michael L. Jordan
    
    
    50,000
    
    
    
    2.77Charles D. Robinson
    
    
    50,000
    
    
    
    2.77William E. Smith
    
    
    50,000
    
    
    
    2.77Marvin Tibbetts, III
    
    
    8,000
    
    
    
    *James J. Tidwell
    
    
    50,000
    
    
    
    2.77Michael E. Townsend
    
    
    50,000
    
    
    
    2.77All directors and executive officers as
a group (10 persons)
    
    
    375,500
    
    
    
    20.86
   *
    
    less than 1%(1)
    
    Determined in accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as
amended (the Exchange Act). Equity Compensation Plan Information The following table gives information about shares of our common stock that may be issued upon
the exercise of options, warrants and rights under all existing equity compensation plans as of
December 31, 2004. Equity Compensation Plan Information Number of securitiesNumber of securities
    
    
    
    
    
    
    remaining available forto be issued upon
    
    
    Weighted-average
    
    
    future issuance underexercise of
    
    
    exercise price of
    
    
    equity compensation plansoutstanding options,
    
    
    outstanding options,
    
    
    (excluding securitieswarrants and rights
    
    
    warrants and rights
    
    
    reflected in 1st column)Plan CategoryEquity compensation plans
approved by security
holders
    
    
    
    
    
    
    
    
    
    
    Equity compensation plans
not approved by security
holders(1)
    
    
    -0-
    
    
    
    
    
    
    
    270,000Total
    
    
    -0-
    
    
    
    N/A
    
    
    
    270,000
   (1)
    
    Includes securities available for future issuance under the Georgia Trust Bancshares, Inc.
2004 Stock Option Plan, which plan will be presented for shareholder approval at the 2005
Annual Meeting of Shareholders.(2)
    
    As of December 31, 2004, no options were outstanding. 26




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Item 12. Certain Relationships and Related Transactions We expect to enter into banking and other business transactions in the ordinary course of
business with our organizers, directors and officers, including members of their families or
corporations, partnerships or other organizations in which these organizers, directors and officers
have a controlling interest. If transactions between Georgia Trust Bancshares or Georgia Trust
Bank and any of our organizers, directors or officers occur, the transaction:  
    will be on substantially the same terms, including price or interest rate and
collateral, as those prevailing at the time for comparable transactions with unrelated
parties, and any banking transactions will not be expected to involve more than the normal
risk of collectibility or present other unfavorable features to us;
    will be on terms no less favorable than could be obtained from an unrelated third party; and
    will be approved by a majority of the directors, including a majority of the directors
who do not have an interest in the transaction. 27




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PART IV 
 Item 13. Exhibits (a)    Exhibits. Periodic reports, registration statements and other information filed
by the Company with the SEC pursuant to the informational requirements of the Securities Act of
1993, as amended and the Securities Exchange Act of 1934, as amended may be inspected and copied at
the SECs Public Reference Room, 450 Fifth Street, N.W., Washington, D.C. 20549, and the public may
obtain information on the operation of the Public Reference Room by calling the SEC at
1-800-SEC-0330. The SEC also maintains an Internet site (http://www.sec.gov) that makes available
reports, proxy statements and other information regarding the Company. ExhibitNumber
    Description3.
    1
    Articles of Incorporation of Georgia Trust Bancshares, Inc. (incorporated by
reference to Exhibit 3.1 of the Companys Registration Statement on Form SB-2 (File No.
333-11652)).3.
    2
    Bylaws of Georgia Trust Bancshares, Inc. (incorporated by reference to Exhibit
3.2 of the Companys Registration Statement on Form SB-2 (File No. 333-11652)).4.
    1
    Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 of
the Companys Registration Statement on Form SB-2 (File No. 333-11652)).4.
    2
    See Exhibits 3.1 and 3.2 for provisions of the Articles of Incorporation and
Bylaws defining rights of holders of the Common Stock4.
    3
    Form of Organizer Warrant Agreement (incorporated by reference to Exhibit 4.3 of
the Companys Registration Statement on Form SB-2 (File No. 333-11652)).10.
    1
    Purchase and Sale Agreement between the Company and DEC Mall of Georgia Court, LLC,
dated July 14, 2004 (our organizers) (incorporated by reference to Exhibit 10.6 of the
Companys Registration Statement on Form SB-2 (File No. 333-11652)).10.
    2*
    Employment Agreement, dated March 10, 2004 by and among Georgia Trust Bank
(Proposed), Georgia Trust Bancshares, Inc. and J. Michael Allen. (incorporated by
reference to Exhibit 10.1 of the Companys Registration Statement on Form 5B-2 (File No.
333-11652))10.
    3*
    Georgia Trust Bancshares, Inc. 2004 Stock Option Plan (incorporated by
reference to Exhibit 10.4 of the Companys Registration Statement on Form SB-2 (File No.
333-11652)).*10.
    4
    Form of Organizer Warrant Agreement (contained in Exhibit 4.3)21.
    1
    Subsidiaries of the Registrant
 28




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ExhibitNumber
    Description24.
    1
    Power of Attorney (contained on the signature page of this Report).31.
    1
    Rule 13a-14(a) Certification of the Chief Executive Officer.31.
    2
    Rule 13a  14(a) Certification of the Chief Financial Officer.32.
    1
    Section 1350 Certifications.
   *
    
    Compensation Plan or Arrangement required to be listed as an exhibit to Form 10-KSB. 
 Item 14. Principal Accountant Fees and Services Mauldin & Jenkins LLC was our independent auditor during the fiscal year ended December 31,
2004. The board of directors has recommended Mauldin & Jenkins LLC to continue as our independent
certified public accountants for the fiscal year ending December 31, 2005. The following table
shows the fees that we paid for services performed in the fiscal year ended December 31, 2004: Year EndedDecember 31, 2004Audit Fees
    
    $
    11,000Audit Related Fees
    
    $
    -0-Tax Fees
    
    $
    1,200All Other Fees
    
    $
    -0-Total
    
    $
    12,200
 Audit Fees.This category includes the aggregate fees billed for professional services
rendered by the independent auditors during our 2004 fiscal year for the audit of our annual financial statements and the review of financial statements included in our registration
statement filed in connection with our initial public offering of shares of common stock. Audit-Related Fees.This category includes the aggregate fees billed for non-audit services,
exclusive of the fees disclosed relating to audit fees, during the fiscal year ended December 31,
2004. These services principally include the assistance and issuance of consents for various
filings with the SEC. Tax Fees.This category includes the aggregate fees billed for tax services rendered in the
preparation of our federal and state income tax returns. All Other Fees.This category includes the aggregate fees billed for all other services,
exclusive of the fees disclosed above, rendered during the fiscal year 2004. The audit committee
concluded that the provision of the non-audit services provided by Mauldin & Jenkins LLC was
compatible with maintaining the principal accountants independence. Oversight of Accountants; Approval of Accounting Fees.The board of directors approves an
annual budget for professional audit fees that includes all fees paid to the independent auditors. 29




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GEORGIA TRUST BANCSHARES, INC.
(A Development Stage Company) FINANCIAL REPORT DECEMBER 31, 2004




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INDEX TO FINANCIAL STATEMENTS PageReport of Independent Registered Public Accounting Firm
    
    
    F-1Balance sheet, December 31, 2004
    
    
    F-2Statement of operations, for the period from February 25, 2004, date of inception,
to December 31, 2004
    
    
    F-3Statement of stockholders deficit, for the period from February 25, 2004, date of
inception, to December 31, 2004
    
    
    F-4Statement of cash flows, for the period from February 25, 2004, date of inception,
to December 31, 2004
    
    
    F-5Notes to financial statements
    
    
    F-6 - F-11




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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 
 To the Board of Directors
Georgia Trust Bancshares, Inc.
Buford, Georgia We have audited the accompanying balance sheet of Georgia Trust Bancshares, Inc.,a
development stage company, as of December 31, 2004, and the related statements of operations,
stockholders deficit and cash flows for the period from February 25, 2004, date of inception, to
December 31, 2004. 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 audit. We conducted our audit in accordance with the standards of the Public Company Accounting
Oversight Board (United States). 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 audit provides a reasonable basis for our
opinion. In our opinion, the financial statements referred to above present fairly, in all material
respects, the financial position of Georgia Trust Bancshares, Inc., a development stage company, as
of December 31, 2004, and the results of its operations and its cash flows for the period from
February 25, 2004, date of inception, to December 31, 2004, in conformity with U.S. generally
accepted accounting principles. /s/ MAULDIN & JENKINS, LLCAtlanta, Georgia
March 14, 2005, except for Note 6, as to which the date is March 18, 2005
 F-1




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GEORGIA TRUST BANCSHARES, INC.
(A Development Stage Company) BALANCE SHEET
DECEMBER 31, 2004 AssetsCash
    
    $
    5,554Restricted cash
    
    
    9,531,586Premises and equipment (net of accumulated depreciation of $4,718)
    
    
    22,712Other assets
    
    
    60,519Total assets
    
    $
    9,620,371Liabilities and Stockholders DeficitLiabilities:Line of credit
    
    $
    494,000Accounts payable
    
    
    39,245Subscribers deposits
    
    
    9,512,300Total liabilities
    
    
    10,045,545Commitments and contingenciesStockholders deficit:Preferred stock, no par value; 10,000,000 shares authorized; no
shares issued and outstanding
    
    
    Common stock, $1 par value; 10,000,000 shares authorized; 10
shares issued and outstanding
    
    
    10Surplus
    
    
    90Deficit accumulated during the development stage
    
    
    (425,274
    )Total stockholders deficit
    
    
    (425,174
    )Total liabilities and stockholders deficit
    
    $
    9,620,371
 See Notes to Financial Statements. F-2




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GEORGIA TRUST BANCSHARES, INC.
(A Development Stage Company) STATEMENT OF OPERATIONS
FOR THE PERIOD FROM FEBRUARY 25, 2004, DATE OF INCEPTION,
TO DECEMBER 31, 2004 ExpensesProfessional and consulting fees
    
    $
    73,391Personnel expenses
    
    
    222,813Application fees
    
    
    20,442Equipment and occupancy expenses
    
    
    33,387Interest expense
    
    
    5,525Other operating expenses
    
    
    69,716Total expenses
    
    
    425,274Net loss
    
    $
    (425,274
    )Losses per share
    
    $
    (42,527
    )
 See Notes to Financial Statements. F-3




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GEORGIA TRUST BANCSHARES, INC.
(A Development Stage Company) STATEMENT OF STOCKHOLDERS DEFICIT
FOR THE PERIOD FROM FEBRUARY 25, 2004, DATE OF INCEPTION,
TO DECEMBER 31, 2004 DeficitAccumulatedDuring the
    
    
    TotalCommon Stock
    
    
    
    
    
    
    Development
    
    
    StockholdersShares
    
    
    Par Value
    
    
    Surplus
    
    
    Stage
    
    
    DeficitBalance, February 25, 2004 (date of inception)
    
    
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (425,274
    )
    
    
    (425,274
    )Issuance of common stock
    
    
    10
    
    
    
    10
    
    
    
    90
    
    
    
    
    
    
    
    100Balance, December 31, 2004
    
    
    10
    
    
    $
    10
    
    
    $
    90
    
    
    $
    (425,274
    )
    
    $
    (425,174
    )
 See Notes to Financial Statements. F-4




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GEORGIA TRUST BANCSHARES, INC.
(A Development Stage Company) STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM FEBRUARY 25, 2004, DATE OF INCEPTION,
TO DECEMBER 31, 2004 OPERATING ACTIVITIESNet loss
    
    $
    (425,274
    )Adjustments to reconcile net loss to net cash
used in operating activities:Depreciation
    
    
    4,718Net other operating activities
    
    
    (10,519
    )Net cash used in operating activities
    
    
    (431,075
    )INVESTING ACTIVITIESPurchase of premises and equipment
    
    
    (7,471
    )Increase in earnest money deposits
    
    
    (50,000
    )Net cash used in investing activities
    
    
    (57,471
    )FINANCING ACTIVITIESProceeds from line of credit
    
    
    494,000Proceeds from issuance of common stock
    
    
    100Net cash provided by financing activities
    
    
    494,100Net increase in cash
    
    
    5,554Cash at beginning of period
    
    
    Cash at end of period
    
    $
    5,554NONCASH TRANSACTIONLiability incurred for purchase of premises and equipment
    
    $
    19,959SUPPLEMENTAL DISCLOSURESStock subscription proceeds held in escrow
    
    $
    9,512,300Unrecognized interest income credited to escrow
    
    $
    19,286
 See Notes to Financial Statements. F-5




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GEORGIA TRUST BANCSHARES, INC.
(A Development Stage Company) NOTES TO FINANCIAL STATEMENTS 
  NOTE 1.
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization and Nature of Business Georgia Trust Bancshares, Inc. (the Company) was incorporated to organize
and serve as the holding company for Georgia Trust Bank (the Bank), a state bank
in organization in Gwinnett County, Georgia. On May 12, 2004, an application was
filed for approval of the organization of the Bank with the Georgia Department of
Banking and Finance (the DBF) and with the Federal Deposit Insurance Corporation
(the FDIC) for insurance of the Banks deposits. Subsequent to obtaining
approval of the FDIC application, the Company filed an application with the Board
of Governors of the Federal Reserve System and the DBF to become a bank holding
company. This application was approved on December 30, 2004, which subsequently
allowed the Company to acquire all of the capital stock of the Bank in 2005. The Company is a development stage company as defined by Statement of Financial
Accounting Standards No. 7, Accounting and Reporting by Development Stage
Enterprises, as it devotes substantially all its efforts to establishing a new
business. Activities since inception have consisted primarily of the Banks organizers
engaging in organizational and preopening activities necessary to obtain regulatory
approvals and to prepare to commence business as a financial institution. Significant Accounting Policies Basis of Presentation: The financial statements have been prepared on the accrual basis in
accordance with U.S. generally accepted accounting principles. Significant
accounting policies are as follows: Organization and Stock Offering Costs Organization costs have been and will be expensed as incurred in accordance
with U.S. generally accepted accounting principles. Additional costs are
expected to be incurred for organization costs and stock offering costs related
to the organization the Bank. Stock offering costs will be charged to capital
surplus upon completion of the Companys stock offering. Upon completion of the stock offering and receipt of all required approvals to
begin business, the Bank will assume all assets and liabilities of the Company
that are directly related to the organization of the Bank. F-6




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NOTES TO FINANCIAL STATEMENTS 
  NOTE 1.
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Significant Accounting Policies (Continued) Premises and Equipment Premises and equipment is stated at cost less accumulated depreciation.
Depreciation is computed by the straight-line method over the estimated useful
lives of the assets. Income Taxes The Company will be subject to federal and state income taxes when taxable
income is generated. No income taxes have been accrued because of operating
losses incurred during the preopening period. Stock-Based Compensation The Company intends to issue stock options to its President/Chief Executive
under an employee agreement and stock warrants to directors under warrant
agreements. The Company will account for these options and warrants in
accordance with U.S. generally accepted accounting principles. Losses Per Share Losses per share are computed by dividing net loss by the number of shares
outstanding. Fiscal Year The Company and Bank have adopted a calendar year for both financial
reporting and tax reporting purposes. F-7




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NOTES TO FINANCIAL STATEMENTS 
  NOTE 1.
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Significant Accounting Policies (Continued) Recent Accounting Developments In December 2004, the FASB published Statement No. 123 (revised 2004),
Share-Based Payment (FAS 123(R) or the Statement). FAS 123(R) requires
that the compensation cost relating to share-based payment transactions,
including grants of employee stock options, be recognized in financial
statements. That cost will be measured based on the fair value of the equity or
liability instruments issued. FAS 123(R) covers a wide range of share-based
compensation arrangements including stock options, restricted share plans,
performance-based awards, share appreciation rights, and employee share purchase
plans. FAS 123(R) is a replacement of FASB Statement No. 123, Accounting for
Stock-Based Compensation, and supersedes APB Opinion No. 25, Accounting for
Stock Issued to Employees, and its related interpretive guidance (APB 25). The effect of the Statement will be to require entities to measure the cost of
employee services received in exchange for stock options based on the grant-date
fair value of the award, and to recognize the cost over the period the employee
is required to provide services for the award. FAS 123(R) permits entities to
use any option-pricing model that meets the fair value objective in the
Statement. The Company will be required to apply FAS 123(R) as of the beginning of its
first interim period that begins after December 15, 2005, which will be the year
ending December 31, 2006. FAS 123(R) allows two methods for determining the effects of the transition: the
modified prospective transition method and the modified retrospective method of
transition. Under the modified prospective transition method, and entity would
use the fair value based accounting method for all employee awards granted,
modified, or settled after the effective date. As of the effective date,
compensation cost related to the nonvested portion of awards outstanding as of
that date would be based on the grant-date fair value of those awards as
calculated under the original provisions of Statement No. 123; that is, an
entity would not remeasure the grant-date fair value estimate of the unvested
portion of awards granted prior to the effective date. An entity will have the
further option to either apply the Statement to only the quarters in the period
of adoption and subsequent periods, or apply the Statement to all quarters in
the fiscal year of adoption. Under the modified retrospective method of
transition, an entity would revise its previously issued financial statements to
recognize employee compensation cost for periods presented in accordance with
the original provisions of Statement No. 123. F-8




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##### Table of Contents



NOTES TO FINANCIAL STATEMENTS 
  NOTE 1.
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Significant Accounting Policies (Continued) Recent Accounting Developments (Continued) The Company has not completed its study of the transition methods or made
any decisions about how it will adopt FAS 123(R). The impact of this Statement
on the Company in fiscal 2006 and beyond will depend upon various factors, among
them being our future compensation strategy.  NOTE 2.
    LINE OF CREDIT To facilitate its formation, the Company established a $600,000 line of credit
with an independent bank for the purpose of paying organization and pre-opening
expenses, and the expenses of the Companys common stock offering. The line of
credit bears interest at the lenders prime rate less 1.00% (4.25% at December 31,
2004) which is payable monthly and matures on March 11, 2005. The line of credit is
guaranteed by each of the Companys ten organizers.  NOTE 3.
    COMMON STOCK OFFERING The Company offered a minimum of 1,060,000 and a maximum of 1,800,000 shares in
its initial offering of common stock at an offering price of $10 per share. The
Company capitalized the Bank on March 1, 2005 with 12,500,000 in order to meet
expected regulatory conditions for approval of the Banks charter. The offering
closed on March 11, 2005. Restricted cash and subscribers deposits in the accompanying balance sheet consist
of proceeds from the Companys stock offering. The funds were held in escrow until
the minimum amount of capital was raised to receive regulatory approval of the Banks
charter. As of December 31, 2004, proceeds from the sale of 951,230 shares of common
stock had been deposited with the escrow agent. The funds were released by the
escrow agent to the Company on January 21, 2005. F-9




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##### Table of Contents



NOTES TO FINANCIAL STATEMENTS 
  NOTE 4.
    STOCK OPTIONS AND WARRANTS Upon the formation and capitalization of the Bank, and as a condition of the
President/Chief Executive Officers employment agreement, he will receive 40,000
performance stock options. The options will vest over a five year period in equal
increments subject to the Bank meeting performance goals to be established by the
Board of Directors. Vested options may be exercised during the ten year period
following the date of grant at an exercise price of $10. Based upon
the intention of the Companys organizers to purchase 368,000 shares of
stock in the offering, it is expected that the organizers will be granted warrants to
purchase an aggregate of 368,000 shares of common stock. The warrants will vest over
a three year period and may be exercised within ten years from the date the Bank
opens for business at an exercise price of $10.  NOTE 5.
    COMMITMENTS AND CONTINGENCIES Employee Agreement The Company has entered into an employee agreement with its President/Chief
Executive Officer with an initial term of three years that requires an annual
salary of $120,000 during the organizational period. The annual salary will be
adjusted to a total of $135,000 subsequent to the date the Bank opens for business.
This officer may receive annual salary increases and performance bonuses as
determined by the Board of Directors. Leases The Company is currently operating in temporary office facilities under a six
month operating lease agreement for $2,530 per month. The Company is also leasing
the furniture and equipment in the office under a six month operating lease
agreement for $1,134 per month. Total rental expense incurred through December 31,
2004 was $24,899. Purchase Agreement On July 14, 2004, the Company entered in to a land sales agreement to purchase
a site for the Banks main office. The total purchase price is $1,400,000 and the
Company paid $50,000 in earnest money for this purchase, which is included in other
assets on the balance sheet. F-10




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##### Table of Contents



NOTES TO FINANCIAL STATEMENTS 
  NOTE 6.
    SUBSEQUENT PURCHASE AGREEMENT On March 18, 2005, the Company entered in to a land sales agreement to purchase a site for the
Banks branch office in Cobb County. The total purchase price is $742,000 and the Company paid
$25,000 in earnest money for this purchase. F-11




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SIGNATURES In accordance with the requirements of the Securities Exchange Act of 1934, as amended, the
Registrant has duly caused this Report to be signed on its behalf by the undersigned, in the City
of Buford, State of Georgia, on March 31, 2005. GEORGIA TRUST BANCSHARES, INC. /s/ J. Michael Allen 
 KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby
severally constitutes and appoints J. Michael Allen and J. Dave DeVenny and each of them, his or
her true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all capacities to sign any and
all amendments to this Annual Report on Form 10-KSB, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorney-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary fully to all intents and purposes
as he or she might or could do in person, hereby ratifying and confirming all that each said
attorneys-in-fact and agents or any of them or their or his or her substitute or substitutes, may
lawfully do or cause to be done by virtue hereof. In accordance with the requirements of the Securities Act of 1933, as amended, this Report was
signed by the following persons in the capacities and on the dates indicated. Signature
    
    Title
    
    Date/s/
J. Michael Allen
J. Michael Allen
    
    Director, President and Chief
Executive Officer
(principal executive officer)
    
    March 31, 2005

/s/ J. Dave DeVenny
J. Dave DeVenny
    
    Senior Vice President & Chief
Financial Officer
(principal financial and accounting officer)
    
    March 31, 2005/s/ Ronald D. Adamson
Ronald D. Adamson
    
    Director
    
    March 31, 2005/s/ L. Myron Cantrell
L. Myron Cantrell
    
    Director
    
    March 31, 2005/s/ Michael L. Jordan
Michael L. Jordan
    
    Director
    
    March 31, 2005/s/ Charles D. Robinson
Charles D. Robinson
    
    Director
    
    March 31, 2005/s/ William E. Smith
William E. Smith
    
    Director
    
    March 31, 2005




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Signature
    
    Title
    
    Date/s/ Marvin Tibbetts, III
Marvin Tibbetts, III
    
    Director
    
    March 31, 2005/s/ James J. Tidwell
James J. Tidwell
    
    Director
    
    March 31, 2005Michael E. Townsend
    
    Director