<PAGE>

                   U. S. Securities and Exchange Commission

                            Washington, D.C. 20549

                                  FORM 10-KSB

     [X]  ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
          SECURITIES EXCHANGE ACT OF 1934
                                 For the fiscal year ended December 31, 1999

     [ ]  TRANSITION REPORT UNDER SECTION 13 or 15(d) OF THE
          SECURITIES EXCHANGE ACT OF 1934
                                 For the transition period from ______to ______

                        Commission file number 0-19030

                COMMUNITY TRUST FINANCIAL SERVICES CORPORATION
                (Name of small business issuer in its charter)

         Georgia                                                 58-1856582
(State of incorporation)                                      (I.R.S. Employer
                                                             Identification No.)

                  3844 Atlanta Highway, Hiram, Georgia 30141
              (Address of principal executive offices)(Zip Code)

                                (770) 445-1014
                (Issuer's telephone number including area code)

        Securities registered pursuant to Section 12(b)of the Act: None

          Securities registered pursuant to Section 12(g) of the Act:

                         Common Stock, $2.50 par value
                               (Title of Class)

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

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of the registrant'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. [ ]

     Revenues for the Registrant's fiscal year ended December 31, 1999, total
$12,367,018.

The aggregate market value of the Registrant's outstanding Common Stock held by
nonaffiliates of the Registrant on March 17, 2000 was $18,781,681  There were
2,391,076 shares of Common Stock outstanding as of March 17, 2000.

                      DOCUMENTS INCORPORATED BY REFERENCE
                      -----------------------------------

Portions of the Company's 1999 Annual Report to Stockholders are incorporated by
reference in Part II hereof, and portions of the Company's Proxy Statement for
the 2000 Annual Meeting of Stockholders to be held on April 18, 2000 are
incorporated by reference in Part III hereof.

     Transitional Small Business Disclosure Format (check one): Yes    ; No X
                                                                    ---    ---
<PAGE>

                COMMUNITY TRUST FINANCIAL SERVICES CORPORATION

                         Annual Report on Form 10-KSB
                  For the Fiscal Year Ended December 31, 1999

                               Table of Contents
                               -----------------

Item                                                          Page
Number                                                        Number
--------                                                      ------
                               Part I

  1.      Description of Business.........................       2

  2.      Description of Property.........................      33

  3.      Legal Proceedings...............................      34

  4.      Submission of Matters to a Vote of
          Security Holders................................      34


                              Part II

  5.      Market for Common Equity and
          Related Stockholder Matters.....................      34

  6.      Management's Discussion and Analysis
          or Plan of Operation............................      34

  7.      Financial Statements............................      35

  8.      Changes in and Disagreements with Accountants on
          Accounting and Financial Disclosure.............      35

                              Part III

  9.      Directors, Executive Officers, Promoters
          and Control Persons; Compliance with
          Section 16(a) of the Exchange Act...............      35

  10.     Executive Compensation..........................      36

  11.     Security Ownership of Certain Beneficial Owners
          and Management..................................      36

  12.     Certain Relationships and Related Transactions..      36

  13.     Exhibits and Reports on Form 8-K................      37

          Signatures......................................      40

          Index of Exhibits...............................      42

                                      -2-
<PAGE>

                                   PART I
                                   ------


ITEM 1.  DESCRIPTION OF BUSINESS
--------------------------------


Forward-Looking Statements
--------------------------


     This report contains certain forward-looking statements including
statements relating to present or future trends or factors generally affecting
the banking industry and specifically affecting operations, markets and
products.  Without limiting the foregoing, the words "believes", "anticipates",
"intends", "expects" or similar expressions are intended to identify forward-
looking statements.  These forward-looking statements involve certain risks and
uncertainties.  Actual results could differ materially from those projected for
many reasons including, without limitation, changing events and trends that have
influenced assumptions.  These trends and events include (i) changes in the
interest rate environment which may reduce margins, (ii) non-achievement of
expected growth (iii) less favorable than anticipated changes in national and
local business environment and securities markets (iv) adverse changes in the
regulatory requirements affecting (v) greater competitive pressures among
financial institutions in the market and (vi) greater than expected loan losses.
Additional information and other factors that could affect future financial
results are included in filings with the Securities and Exchange Commission,
including this Annual Report on Form 10-KSB for 1999.

Overview
--------

The Company

     Community Trust Financial Services Corporation (the Company) was
incorporated under the laws of the State of Georgia at the direction of
Community Trust Bank (the Bank) for the purpose of becoming a bank holding
company for the Bank.  On February 22, 1991, following the receipt of all
requisite corporate and regulatory approvals, the Bank became a wholly-owned
subsidiary of the Company, and the shareholders of the Bank became shareholders
of the Company, with the same proportional interests in the Company as they
previously held in the Bank (the Reorganization).  Following the Reorganization,
the Bank has continued its business operations as a Georgia-chartered commercial
bank under the same name, articles of incorporation and bylaws.

     The primary activity of the Company currently is, and is expected to remain
for the foreseeable future, the ownership and operation of the Bank.  As a bank
holding company, the Company is intended to facilitate the Bank's ability to
serve its customers' requirements for financial services.  The holding company
structure also provides flexibility for expansion through the possible
acquisition of other financial institutions and the provision of additional
banking-related services, as well as certain non-banking services, which a
traditional commercial bank may not provide under present laws.  The holding
company structure also affords additional flexibility in terms of capital
formation and financing opportunities.

     While the Company may seek in the future to acquire additional banks or
bank holding companies or to engage in other activities appropriate for bank
holding companies under appropriate circumstances as permitted by law, the
Company currently has no plans, understandings or agreements concerning any
other activities other than as described below.  The results of operations and
financial condition of the Company for the foreseeable future, therefore, will
be determined primarily by the results of operations and financial condition of
the Bank.

                                      -3-
<PAGE>

The Bank

     The Bank's business consists primarily of attracting deposits from the
general public and, with these and other funds, originating real estate loans,
consumer loans, business loans, and residential and commercial construction
loans.  Funds not invested in the loan portfolio are invested by the Bank
primarily in U.S. Government and agency obligations and obligations of various
states and their political subdivisions.  In addition to deposits, sources of
funds for the Bank's loans and other investments include borrowings from the
Federal Home Loan Bank of Atlanta (the Federal Home Loan Bank), amortization and
prepayment of loans, sales of loans or participations in loans, sales of its
investment securities, and repurchase agreements.  The principal sources of
income for the Bank are interest and fees collected on loans, fees collected on
deposit accounts and interest and dividends collected on other investments.  The
principal expenses of the Bank are interest paid on deposits, employee
compensation and benefits, office expenses and other overhead expenses.
Management of the Bank currently anticipates that the Bank will open a full
service office in Douglas County, Georgia in the fourth quarter of 2000, in
addition to the full service branch in Cobb County called Battle Ridge, which
opened January 2000.

Other Subsidiaries

     In addition to the Bank, the Company has invested in three non-bank
subsidiaries: Community Loan Company (CLC); Cash Transactions, LLC (CashTrans);
and Metroplex Appraisals, Inc. (Metroplex).  These subsidiaries historically
have not had, and, during 2000, are not expected to have, a significant effect
on the financial condition or results of operations of the Company.

     In 1995, the Company established CLC as a non-bank subsidiary for the
purpose of engaging in the consumer finance business.  CLC presently operates
from ten offices located in northwest Georgia.  The offices are presently
located in Woodstock, Rockmart, Rossville, Gainesville, Dalton, Oakwood, Rome,
Dahlonega, with two in Cartersville.  During 1999, CLC expanded operations
through the acquisition of two offices.  Additionally, the Company purchased
assets related to five consumer finance offices which were owned by Drummond
Association, Inc.  These assets primarily consisted of $1,130,152 in loans,
which were then contributed to CLC's portfolio.

     In 1997, the Company participated in the establishment of CashTrans.
CashTrans is a limited liability company that is owned 49% by the Company and
51% by an individual who serves as Chairman of CashTrans.  CashTrans is engaged
in the business of providing retail establishments (primarily convenience
stores) with automated teller machines that are owned by CashTrans and that
dispense cash or cash equivalents.  As of February 1999, CashTrans diversified
its business into selling the same types of machines to retail establishments,
if the retailer so desires.  While CashTrans remains focused on placing its
machines in space which is strategically located to encourage transactions,
CashTrans will sell machines, thereby earning income on the sales and on future
maintenance of the machines.  CashTrans engages in this business in Georgia,
Florida, South Carolina, North Carolina, Alabama, and Tennessee.

     In 1992, the Company established Metroplex as a non-bank subsidiary for the
purpose of performing appraisals of residential and commercial properties for
the Bank as well as other entities, such as financial institutions, mortgage
companies and insurance companies.  Metroplex is located in Dallas, Georgia.
Since Metroplex represents less than 5% of the Company's consolidated assets and
consolidated net earnings, the financial condition and results of operations of
the Company are not significantly affected by the operations of Metroplex.

                                      -4-
<PAGE>

Business of the Company
-----------------------

     The Company's earnings depend primarily on the Bank's net interest income,
which is the difference between the interest income it receives from its assets
(primarily its loans and other investments) and the interest expense (or "cost
of funds") which it pays on its liabilities (primarily its deposits).  Net
interest income is a function of (i) the difference between rates of interest
earned on interest-earning assets and rates of interest paid on interest-bearing
liabilities (the "interest rate spread" or "net interest spread") and (ii) the
relative amounts of its interest-earning assets and interest-bearing
liabilities.  When interest-earning assets approximate or exceed interest-
bearing liabilities, any positive interest rate spread will generate net
interest income.  The Bank adheres to an asset and liability management strategy
which is intended to control the impact of interest rate fluctuations upon the
Company's earnings and to make the yields on the Bank's loan portfolio and other
investments more responsive to its cost of funds, in part by more closely
matching the maturities of its interest-earning assets and its interest-bearing
liabilities, while still maximizing net interest income.  Nevertheless, the Bank
is and will continue to be affected by changes in the levels of interest rates
and other factors beyond its control.

     Unless specifically noted below, the following information is presented on
a consolidated basis reflecting the Company's performance as a whole.  The
Company's results of operations are dependent primarily upon the results of
operations of the Bank, but also are affected by the operations of CLC,
CashTrans, and Metroplex.  The information hereinafter set forth as it relates
generally to the Company's interest-earning assets, loans and interest income
includes CLC's loans, or interest income attributable to such loans.  However,
where such information specifically refers to the Bank or refers to specific
categories of the Company's interest-earning assets other than consumer loans,
it does not include loans held by CLC.  Similarly, references generally to the
Company's interest-bearing liabilities, interest expense, non-interest income
and non-interest expense include CLC and Metroplex unless such references are
specifically to the Bank.

     For the fiscal years ended December 31, 1999 and 1998, the Company's
weighted average rate earned on all interest-earning assets was 9.57% and 9.59%,
respectively, and the Company's weighted average rate paid on all interest-
bearing liabilities for the same years was 4.21% and 4.41%, respectively.  The
Company's interest rate spread for the years ended December 31, 1999 and 1998
was 5.36% and 5.18%, respectively, and its net interest income for such years
was $6,808,173 and $5,508,099, respectively.  For the year ended December 31,
1999, the Company's comprehensive income consisted of $862,538 in net earnings
and a $491,871 loss in other comprehensive income, which is composed of changes
in the unrealized gain or loss on securities available for sale, net of tax.
For the year ended December 31, 1998, the Company's comprehensive income
consisted of $1,259,896 in net earnings and $162,140 in other comprehensive
income, which is composed of changes in the unrealized gain on securities
available for sale, net of tax.  The Company's net earnings per share (based on
the weighted average number of shares outstanding during the year) decreased
from $.65 for 1998 to $.37 for 1999, and its net earnings per share, assuming
dilution (which assumes the effects of potential common shares outstanding
during the period), decreased from $.63 for 1998 to $.35 for 1999.

Net Interest Income
-------------------

     The following table shows information concerning interest income from
average interest-earning assets, expressed both in dollars and yields, and
interest expense on average interest-bearing liabilities, expressed both in
dollars and rates, for the periods indicated.  The table includes loan yields
which reflect the amortization of deferred loan origination and commitment fees.
Interest income from investment securities includes the accretion of discounts
and amortization of premiums. All dollar amounts are expressed in thousands.

                                      -5-
<PAGE>

<TABLE>
<CAPTION>
TABLE 1 - Average Consolidated Balance Sheets and Net Interest Analysis
(Dollar amounts in thousands)
                                                                         Years Ended December 31,
                                        -------------------------------------------------------------------------------------------
                                                     1999                           1998                           1997
                                                  ----------                     ----------                     ----------
                                                  Interest   Average             Interest   Average             Interest   Average
                                        Average    Income/    Yield/   Average    Income/    Yield/   Average    Income/    Yield/
                                        Balance   Expense(1)   Rate    Balance   Expense(1)   Rate    Balance   Expense(1)   Rate
                                        --------  ----------  -------  --------  ----------  -------  --------  ----------  -------
<S>                                     <C>       <C>         <C>      <C>       <C>         <C>      <C>       <C>         <C>
ASSETS
Interest-earning assets:
  Loans(1)(2).........................  $ 83,226    $ 9,008    10.82%   $64,255     $7,267    11.31%   $52,395     $6,075    11.60%
  Investment securities
     Taxable..........................    15,166        953     6.28%    16,254        976     6.00%    18,771      1,114     5.94%
     Tax-exempt(3)....................     7,759        359     4.63%     6,736        311     4.62%     4,052        198     4.88%
  Federal funds sold..................     3,721        191     5.14%     4,492        243     5.42%     4,396        243     5.53%
                                        --------    -------    -----    -------     ------    -----    -------     ------    -----
Total interest-earning assets.........  $109,872    $10,511     9.57%   $91,737     $8,797     9.59%   $79,614     $7,630     9.58%

Cash and other assets.................     7,962                          6,728                          7,360
                                        --------                        -------                        -------

     Total assets.....................  $117,834                        $98,465                        $86,974
                                        ========                        =======                        =======


LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing liabilities:
Deposits
   NOW accounts.......................  $ 12,968    $   173     1.33%   $10,979     $  183     1.67%   $ 9,059     $  165     1.82%
   Money market accounts..............     7,839        218     2.78%     8,128        225     2.77%     8,170        233     2.85%
   Savings deposits...................    13,265        347     2.62%    12,909        372     2.88%    13,017        391     3.00%
   Time deposits, $100,000 and over...    18,186      1,036     5.69%    15,381        933     6.06%    13,584        817     6.01%
   Time deposits, other...............    27,811      1,514     5.45%    22,804      1,312     5.75%    21,880      1,276     5.83%
                                        --------    -------    -----    -------     ------    -----    -------     ------    -----
    Total interest-bearing deposits...  $ 80,069    $ 3,288     4.11%   $70,201     $3,025     4.31%   $65,710     $2,882     4.39%

Federal funds purchased...............       147          8     5.04%        58          3     4.84%        17          1     3.96%
Federal Home Loan Bank advances.......     5,500        308     5.60%     3,503        195     5.58%       -0-        -0-      -0-
Other borrowings......................     2,291         99     4.32%       808         66     8.13%       370         28     7.63%
                                        --------    -------    -----    -------     ------    -----    -------     ------    -----
  Total interest-bearing liabilities..  $ 88,007    $ 3,703     4.21%   $74,570     $3,289     4.41%   $66,097     $2,911     4.40%

Other liabilities:
  Demand deposits.....................  $ 14,842                        $11,919                        $11,627
  Accrued interest payable and
   other liabilities..................       665                          1,900                          2,059
                                        --------                        -------                        -------
     Total other liabilities..........    15,507                         13,819                         13,686

        Total liabilities.............  $103,414                        $88,389                        $79,782

Stockholders' equity..................    14,321                         10,076                          7,192
    Total liabilities
    and stockholders' equity..........  $117,834                        $98,465                        $86,974
                                        ========                        =======                        =======

Net interest income...................              $6,808                          $5,508                         $4,719
                                                    =======                         ======                         ======

Net interest spread (difference
 between rate earned on interest-
 earning assets and rate paid on
 interest-bearing liabilities).                                 5.36%                          5.18%                          5.18%

Net interest margin (Net interest
income divided by average
interest-earning assets)..............                          6.20%                          6.00%                          5.93%
--------------------
</TABLE>

(1)  Interest income on loans includes amortization of deferred loan fees and
other discounts of $1,200,474, $920,413, and $811,805 for the fiscal years ended
December 31, 1999, 1998, and 1997, respectively.
(2)  Nonperforming loans are included in the computation of average loan
balances, and interest income on such loans is recognized on a cash basis.
(3)  The average yield computed on tax-exempt securities is computed using
actual yields rather than tax-equivalent yields.

                                      -6-
<PAGE>

     Changes in interest income and interest expense are attributable to three
factors: (i) a change in volume or amount of an asset or liability; (ii) a
change in interest rates; or (iii) a change caused by the combination of changes
in volume and interest rates.  The following table describes the extent to which
changes in interest rates and changes in volume of interest-earning assets and
interest-bearing liabilities have affected the Company's interest income and
expense during the periods indicated.  For each category of interest-earning
assets and interest-bearing liabilities, information is provided as to changes
attributable to change in volume (change in volume multiplied by old rate) and
change in rates (change in rate multiplied by old volume).  The net change
attributable to changes in both volume and rate has been allocated
proportionately to the change due to volume and the change due to rate.  All
dollar amounts are expressed in thousands.

TABLE 2 - Changes in Interest Income and Expense
(Dollar amounts in thousands)
<TABLE>
<CAPTION>
                                               Year Ended December 31,           Year Ended December 31,
                                               1999 Compared to 1998             1998 Compared to 1997
                                            ----------------------------       -----------------------
                                                     Rate/           Net                Rate/      Net
                                            Volume   Yield        Change       Volume   Yield   Change
                                            ------   -----        ------       ------   -----   ------
<S>                                         <C>      <C>          <C>          <C>      <C>     <C>
Interest income:
Loans (1)(2)..........................      $2,065    (323)        1,742       $1,345   ($153)  $1,192
Investment securities (3).............          (4)     28            24           10     (35)     (25)
Federal funds sold....................         (40)    (12)          (52)           5      (5)     -0-
                                            ------    ----         -----       ------   -----   ------
 Total interest income................       2,021    (307)        1,714        1,360    (193)   1,167

Interest expense:
NOW accounts..........................          30     (40)          (10)          33     (15)      18
Money market accounts.................          (8)      1            (7)          (1)     (6)      (7)
Savings deposits......................          10     (35)          (25)          (3)    (16)     (19)
Time deposits, $100,000 and over......         162     (59)          103          109       7      116
Time deposits, other..................         275     (73)          202           53     (17)      36
                                            ------    ----         -----       ------   -----   ------
Total deposits........................         469    (206)          263          191     (47)     144

Other borrowings......................         187     (36)          151          223      12      235
                                            ------    ----         -----       ------   -----   ------

Total interest expense................         656    (242)          414          414     (35)     379
                                            ------    ----         -----       ------   -----   ------

Net interest income...................       1,365     (65)        1,300       $  946   ($158)  $  788
                                            ======    ====         =====       ======   =====   ======
</TABLE>
-----------
(1)  Loan amounts include nonaccruing loans.
(2)  Interest income includes the portion of loan fees recognized in the
respective periods.
(3)  Changes due to rate and volume on investment securities have been computed
using actual yields on tax-exempt securities rather than tax-equivalent yields.
Yields are computed on the carrying value of the securities.

     The level and volatility of interest rates can have a significant impact on
the Company's profitability.  Management attempts through interest rate risk
management to identify and manage the sensitivity of the Company's net interest
income to changing interest rates.  The Company uses income simulation modeling
as a primary tool in measuring interest rate risk and managing interest rate
sensitivity of its assets and liabilities.  Simulation modeling considers not
only the impact of changing market rates of interest on future net interest
income, but also such other potential causes of variability as earning asset
volume, mix, yield curve relationships, customer preferences and general market
conditions.

     Interest rate sensitivity management focuses on the maturity structure of
assets and liabilities and their repricing characteristics during periods of
changes in market interest rates.  Effective interest rate

                                      -7-
<PAGE>

sensitivity management seeks to ensure that both assets and liabilities respond
to changes in interest rates within an acceptable time frame, thereby minimizing
the impact of interest rate changes on net interest income. The following table
sets forth the repricing of the Company's interest-earning assets and interest-
bearing liabilities as of December 31, 1999. The time periods in the table
represent the period, following December 31, 1999, during which an asset or
liability matures or can be repriced. This interest sensitivity gap table is
designed to monitor the Company's interest rate risk exposure within the
designated time horizons. In order to control interest rate risk, management
regularly monitors the volume of interest sensitive assets relative to interest
sensitive liabilities over specific time intervals. The Company's interest rate
management policy is to attempt to maintain a relatively stable net interest
margin in periods of interest rate fluctuations. The Company's policy is to
attempt to maintain a ratio of cumulative gap to total assets of negative 10.00%
to positive 10.00% in the time periods of six months, one year, and five years.
The following table reflects that the Company's interest-earning assets and
interest-bearing liabilities are within the Company's policy guidelines.

TABLE 3 - Interest Rate Gap Sensitivity
(Dollar amounts in thousands)
<TABLE>
<CAPTION>

                                         0 to 3     4 to 6     7 to 12    1 to 5    Over 5
                                         Months     Months     Months     Years     Years     Total
                                        ---------  ---------  ---------  --------  --------  --------
<S>                                     <C>        <C>        <C>        <C>       <C>       <C>
Interest Sensitive Assets
-------------------------
Fed Funds Sold........................  $ 4,590        -0-        -0-        -0-       -0-   $  4,590
Investment Securities
   Taxable (1)........................    5,749         97        179      5,243     7,219     18,487
   Tax-exempt (1).....................      454        -0-        155      2,675     5,457      8,741
Loans
   Fixed rate.........................    4,434      2,952      2,534      1,098       -0-     11,018
   Adjustable rate....................   34,500        673      2,130      2,884       -0-     40,187
   Scheduled payments.................    2,646      2,314      4,969     27,779       623     38,331
                                        -------    -------    -------    -------   -------   --------
Total Interest-Sensitive Assets.......  $52,373    $ 6,036    $ 9,967    $39,679   $13,299   $121,354
                                        =======    =======    =======    =======   =======   ========

Interest Sensitive Liabilities
--------------------------------------
NOW...................................  $12,457        -0-        -0-        -0-       -0-   $ 12,457
Money Market..........................    6,376        -0-        -0-        -0-       -0-      6,376
Savings...............................   14,907        -0-        -0-        -0-       -0-     14,907
Time Deposits.........................    7,037      6,993      9,981     13,038       -0-     37,049
Time, in excess of $100,000...........    6,084      3,745      4,978      5,211       -0-     20,018
Other interest-bearing liabilities....    5,671        -0-        -0-      5,500       -0-     11,171
                                        -------    -------    -------    -------   -------   --------
Total Interest Sensitive Liabilities..  $52,532    $10,738    $14,959    $23,749   $   -0-   $101,978
                                        =======    =======    =======    =======   =======   ========

Interest Sensitivity Gap..............     (159)    (4,702)    (4,992)    15,930    13,299     19,376
Cumulative Gap........................     (159)    (4,861)    (9,853)     6,077    19,376

Ratio of cumulative gap to
   total assets.......................    (0.12%)    (3.69%)    (7.48%)     4.61%    14.71%
-----------
</TABLE>
(1) All investment securities are shown at the carrying value.

          Changes in the mix of earning assets or supporting liabilities can
either increase or decrease the net interest margin without affecting interest
rate gap sensitivity.  Additionally, the interest rate spread between an asset
and its supporting liability can vary significantly while the timing of
repricing for both the asset and the liability remains the same, and this
characteristic is known as basis risk.  Also, varying

                                      -8-
<PAGE>

interest rate environments may create unexpected changes in prepayment levels of
assets and liabilities that are not reflected in the interest rate sensitivity
analysis. Due to reasons such as these, management considers the gap analysis in
Table 3 to be one tool in studying interest rate sensitivity, just as simulation
modeling is another tool. Current simulation results indicate minimal
sensitivity to parallel shifts in the yield curve; however, no assurances can be
given that the Company is not at risk from changes in interest rates.


Lending Activities
------------------

General

     At December 31, 1999, the Company's net loan portfolio constituted
approximately 66.99% of the Company's total assets.  The following table sets
forth the composition of the Company's loan portfolio at the indicated dates.
<TABLE>
<CAPTION>

TABLE 4 - Loans Outstanding
(Dollar amounts in thousands)

                                             At December 31,
                                   ----------------------------------
                                         1999             1998
                                   ----------------  ----------------
                                    Amount  Percent  Amount   Percent
                                   -------  -------  -------  -------
<S>                                <C>      <C>      <C>      <C>
Commercial, financial,
and agricultural.................  $11,167   12.46%  $10,157    13.64%

Real estate - construction.......   16,576   18.50%   12,631    16.97%

Real estate - mortgage...........   49,359   55.08%   40,379    54.24%

Consumer loans...................   12,512   13.96%   11,273    15.15%
                                   -------  ------   -------   ------

Total loans......................   89,614  100.00%   74,440   100.00%

Less: Allowance for loan losses..    1,357               935
                                   -------           -------

Total loans, net.................  $88,257           $73,505
                                   =======           =======

</TABLE>

     The following table sets forth the scheduled maturities of the loans for
selected categories in the Company's loan portfolio as of December 31, 1999
based on their contractual terms to maturity.  Loans unpaid at maturity are
renegotiated based on current market rates and terms.

<TABLE>
<CAPTION>
TABLE 5 - Loan Portfolio Maturity
(Dollar amounts in thousands)
                                                                         Rate Structure for Loans
                                              Loans Maturing              Maturing Over One Year
                                 ------------------------------------  ----------------------------
                                   Less    One to    More                             Floating or
                                 than One   Five   than Five           Predetermined   Adjustable
                                   Year    Years     Years     Total   Interest Rate      Rate
                                 --------  ------  ---------  -------  -------------  -------------
<S>                              <C>       <C>     <C>        <C>      <C>            <C>
Commercial, financial
   and agricultural............   $ 4,881  $4,958     $1,328  $11,167         $4,538         $1,748

Real estate -
   construction................    12,895   3,544        137   16,576          1,108          2,573
                                 --------  ------  ---------  -------  -------------  -------------
 Total                            $17,776  $8,502     $1,465  $27,743         $5,646         $4,321
                                  =======  ======     ======  =======         ======         ======

</TABLE>
                                      -9-
<PAGE>

Types of Loans

Commercial, Financial, and Agricultural Loans

     Commercial, financial, and agricultural loans, hereinafter referred to as
commercial loans (including non-real estate loans for agricultural purposes but
excluding commercial construction loans), totaled $11,166,660 or 12.46% of the
Company's gross loan portfolio at December 31, 1999. All commercial loans are
held in the Bank's loan portfolio.  These loans consist of loans and lines of
credit to individuals, partnerships and corporations for a variety of business
purposes, such as accounts receivable and inventory financing, equipment
financing, business expansion and working capital.  The terms of the Bank's
commercial loans generally range from three months to seven years, and some of
the loans carry interest rates which adjust in accordance with changes in the
prime rate.  Substantially all of the Bank's commercial loans are secured and
guaranteed by the principals of the business.

Real Estate - Construction Loans

     $16,576,411 or 18.50% of the Company's gross loans outstanding at December
31, 1999 were construction loans and acquisition and development loans.  All
construction and acquisition and development loans are held in the Bank's loan
portfolio.  The Bank makes residential construction loans to owner-occupants and
to persons building residential properties for resale.  The majority of the
Bank's construction loans are made to residential real estate developers for
single-family residential properties.  Construction loans are usually variable
rate loans made for terms of six months, but extensions are permitted if
construction has continued satisfactorily and if the loan is current and other
circumstances warrant the extension.  Construction loans are limited to 85% of
the appraised value of the lot and the completed value of the proposed
structure.  In response to competitive conditions, the Bank permits a portion of
its single family residential construction loans extended to builders to be made
without commitments for "take-out" or permanent financing from third parties.

     Construction financing generally is considered to involve a higher degree
of credit risk than permanent mortgage financing of residential properties, and
this additional risk usually is reflected in higher interest rates.  The higher
risk of loss on construction loans is attributable in large part to the fact
that loan funds are estimated and advanced upon the security of the project
under construction, which is of uncertain value prior to the completion of
construction.  Moreover, because of the uncertainties inherent in estimating
construction costs, delays arising from labor problems, material shortages and
other unpredictable contingencies, it is relatively difficult to accurately
evaluate the total loan funds required to complete a project and to accurately
evaluate the related loan-to-value ratios.  If the estimates of construction
costs and the salability of the property upon completion of the project prove to
be inaccurate, the Bank may be required to advance funds beyond the amount
originally committed to

                                      -10-
<PAGE>

permit completion of the project. If the estimate of value proves to be
inaccurate, the Bank may be confronted, at or prior to the maturity of the loan,
with a project with a value which is insufficient to assure full repayment.

     The Bank's underwriting criteria are designed to evaluate and minimize the
risk of each construction loan.  Among other items, the Bank considers evidence
of the availability of permanent financing or a take-out commitment to the
borrower, the financial strength and reputation of the borrower, an independent
appraisal and review of cost estimates, market conditions, and, if applicable,
the amount of the borrower's equity in the project, pre-construction sale or
leasing information and cash flow projections of the borrower.

Real Estate - Mortgage Loans

     At December 31, 1999, real estate - mortgage loans totaled $49,358,441 or
55.08% of the Company's gross loan portfolio.  Real estate - mortgage loans
include all loans secured by real estate for purposes other than construction or
acquisition and development and are hereinafter referred to as real estate
loans.  All real estate loans are held in the Bank's loan portfolio.  Of this
amount, $14,040,263 or 15.67% of the Company's gross loan portfolio was
comprised of loans secured by one to four family residential properties,
including home equity loans (loans secured by the equity in the borrower's
residence but not necessarily for the purpose of home improvement).  Most of
these home equity loans are made at fixed interest rates for terms of one to
three years with balloon payment provisions and amortized over a 10-15 year
period. The Bank also offers a product which allows consumers to borrow with low
closing costs on the equity in their homes.  This product is a variable rate
revolving line of credit, having an outside maturity of 5 years with 1.5% of the
average daily balance due monthly.  The Bank's experience indicates that real
estate loans normally remain outstanding for much shorter periods (seven years
on average) than their stated maturity because the borrowers repay the loans in
full either upon the sale of the secured property or upon the refinancing of the
original loan.

     The real estate loans originated by the Bank contain a "due-on-sale"
clause, which provides that the Bank may declare the unpaid balance of the loan
immediately due and payable upon the sale of the mortgaged property.  Such
clauses are an important means of reducing the average loan life and increasing
the yield on existing fixed-rate real estate loans, and it is the Bank's policy
to enforce due-on-sale clauses.

     At December 31, 1999, the remainder of the Company's real estate loans
totaled $35,318,178 or 39.41% of the Company's gross loan portfolio.  These
loans were comprised of non-farm nonresidential real estate loans (including
commercial real estate loans and loans secured by raw land).

Consumer Loans

     At December 31, 1999, consumer loans totaled $12,512,136 or 13.96% of the
Company's gross loan portfolio.  $8,647,329 or 69.11% of these loans are held in
the Bank's loan portfolio, with the remainder held in CLC's loan portfolio.

     The Bank makes both secured and unsecured consumer loans for a variety of
personal and household purposes.  Most of the Bank's consumer loans are
automobile loans, boat loans, property

                                      -11-
<PAGE>

improvement loans and loans to depositors on the security of their certificates
of deposit. These loans are generally made for terms of up to five years at
fixed interest rates. The Bank considers consumer loans to involve a relatively
high credit risk compared to real estate loans. Consumer loans, therefore,
generally yield a relatively high return to the Bank and provide a relatively
short maturity. The Bank believes that the generally higher yields and the
shorter terms available on various types of consumer loans tend to offset the
relatively higher risk associated with such loans, and contribute to a
profitable spread between the Bank's average yield on earning assets and the
Bank's cost of funds.

     At December 31, 1999, consumer loans held in CLC's loan portfolio totaled
$3,864,807 or 4.31% of the Company's gross loan portfolio.  CLC, a consumer
finance company, makes loans for up to $3,000 with original maturities of up to
three years under the Georgia Industrial Loan Act (GILA).  Additionally, CLC may
choose to make consumer loans, which are typically called deregulated loans,
such as sales finance loans.  The Company considers CLC's loans to involve a
relatively high credit risk compared to other loans in the Company's portfolio.
These consumer loans generally yield a higher return to the Company than
consumer loans originated by the Bank.  The Company believes that the generally
higher yields on CLC's loan portfolio offset the higher risk associated with
such loans and contribute to a profitable spread between the Company's yield on
earning assets and the Company's cost of funds.

     In 1996, the Bank began to issue MasterCard and VISA credit cards to
applicants who met the Bank's credit standards.  The credit approval policy was
similar to that which the Bank used for any consumer loan customer.  As of
December 31, 1999, credit card loans totaled  $1,1,42,458, or 1.27% of the
Company's gross loan portfolio.  The Bank considers credit card loans to involve
a relatively high credit risk compared to other types of loans offered by the
Bank, even though management considered its credit approval policy to be
conservative.  As of March 1, 2000, the Bank sold its credit card portfolio to
the Bankers Bank in Atlanta, Georgia.  For one year from the time of this sale,
the Bank will be responsible to Bankers Bank for any debt in this portfolio
which proves to be uncollectable after 90 days.


Origination, Purchase and Sale of Loans

     The Bank originates loans primarily in Paulding County, Georgia.  The Bank
also originates loans in Cobb, Douglas, and Bartow Counties, each of which is
contiguous to Paulding.  Loans are originated by loan officers who operate from
the Bank's offices in Paulding and Cobb Counties.  These loan officers actively
solicit loan applications from existing customers, local manufacturers and
retailers, builders, real estate developers, real estate agents and others.  The
Bank also receives numerous loan applications as a result of customer referrals
and walk-ins to its offices.  Management of the Bank currently anticipates that
the Bank will open an additional office in Douglas County in 2000.  Management
expects to have lenders who will originate loans from the Douglas location.

     Upon receipt of a loan application and all required supporting information
from a prospective borrower, the Bank obtains a credit report and verifies
specific information relating to the loan applicant's employment, income and
creditworthiness.  For significant extensions of credit, a certified appraisal
of the real estate intended to secure the proposed loan is undertaken by an
independent appraiser approved by the Bank.  The Bank's loan officers then
analyze the credit worthiness of the borrower and the value of any collateral
involved.

                                      -12-
<PAGE>

     The Bank's loan approval process is intended to be conservative but also
responsive to customer needs.  Loans are approved in accordance with the Bank's
written loan policy, which provides for several tiers of approval authority,
based on a borrower's aggregate debt with the Bank. There is a Loan Committee
comprised of the senior officers of the Bank which must approve any loan that
increases the borrower's aggregate indebtedness above an individual officer's
limit, but that is not more than $250,000.  The Loan Committee of the Board of
Directors, comprised of the President and five non-employee Directors, must
approve all loans over $250,000, and all lending relationships where a
borrower's aggregate indebtedness to the Bank exceeds $250,000.

     From time to time, the Bank may participate in loans with other financial
institutions by either buying or selling part of a loan.  The purchase of a loan
participation allows the Bank to expand its loan portfolio and increase
profitability while still maintaining the high credit standards which are
applied to all extensions of credit made by the Bank.  The sale of loan
participations allows the Bank to make larger loans which it otherwise would be
unable to make due to capital or other funding considerations.

     CLC's loans are originated by lenders who operate from CLC's offices in
northwest Georgia.  These lenders actively solicit loan applications from
existing customers.  CLC also originates loans through a conditional sales
contract program with retailers.  CLC may expand the program with similar
arrangements through other retailers.  All loans made through this program must
meet CLC's ordinary credit standards.  CLC receives numerous loan applications
as a result of customer referrals and walk-ins to its offices.


Loan Fee Income

     In addition to interest earned on loans, the Bank receives origination fees
for making loans, commitment fees for making certain loans, and other fees for
miscellaneous loan-related services.  Such fee income varies with the volume of
loans made, prepaid or sold, and the rates of fees vary from time to time
depending on the supply of funds and competitive conditions.

     Commitment fees are charged by the Bank to the borrower for certain loans
and are calculated as a percentage of the principal amount of the loan.  These
fees normally are deducted from the proceeds of the loan and generally range
from  1/2% to 1% of the principal amount, depending on the type and volume of
loans made and market conditions such as the demand for loans, the availability
of money and general economic conditions.

     The Bank also receives miscellaneous fee income from late payment charges,
overdraft fees, property inspection fees, and miscellaneous services related to
its existing loans.  For the year ended December 31, 1999, the Bank recognized
origination, commitment and other loan fees totaling $752,107, which equaled
11.05% of the Company's net interest income for such year.  For the years ended
December 31, 1998 and 1997, the Bank recognized origination, commitment and
other loan fees totaling $628,683 and $575,498, respectively, which equaled
11.41% and 12.19%, respectively, of the Company's net interest income for such
years.

                                      -13-
<PAGE>

     CLC receives miscellaneous fee income from late payment charges, loan fees,
maintenance fees, and miscellaneous services related to its existing loans.  For
the year ended December 31, 1999, CLC recognized loan fees totaling $448,367,
which equaled 6.59% of the Company's net interest income for such year.  For the
year ended December 31, 1998, CLC recognized loan fees totaling $291,730, which
equaled 5.30% of the Company's net interest income for such year.

Problem Loans and Allowance for Loan Losses

Problem Loans

     In originating loans, the Company recognizes that credit losses will be
experienced and that the risk of loss will vary with, among other things, the
type of loan being made, the creditworthiness of the borrower over the term of
the loan and, in the case of a secured loan, the guaranty of the security for
the loan.  The Company has instituted measures at both the Bank and CLC which
are designed to reduce the risk of, and monitor exposure to, credit losses.

     The Bank's loan portfolio is periodically reviewed by the Bank's management
to identify deficiencies and to take corrective actions as necessary.  As
discussed below, each of the Bank's loans is assigned a rating in accordance
with the Bank's internal loan rating system and is reviewed monthly to update
its rating in accordance with the performance of the loan.  All past due loans
are reviewed monthly by the Bank's senior lending officers and by the Loan
Committee of the Board of Directors, and all loans classified as substandard or
doubtful, as well as any "special mention" loans, are reviewed at least monthly
by the Loan Committee.  In addition, all loans to a particular borrower are
reviewed, regardless of classification, each time such borrower requests a
renewal or extension of any loan or requests an additional loan.  All lines of
credit are reviewed annually prior to renewal.  Such reviews include, but are
not limited to, the ability of the borrower to repay the loan, a re-assessment
of the borrower's financial condition, the value of any collateral and the
estimated potential loss to the Bank, if any.

     The Bank's internal problem loan rating system establishes three
classifications for problem assets: substandard, doubtful and loss.
Additionally, in connection with regulatory examinations of the Bank, federal
and state examiners have authority to identify problem assets and, if
appropriate, require the Bank to classify them.  Substandard assets have one or
more defined weaknesses and are characterized by the distinct possibility that
the Bank will sustain some loss if the deficiencies are not corrected.  Doubtful
assets have the weaknesses of substandard assets with the additional
characteristic that the weaknesses make collection or liquidation in full, on
the basis of currently existing facts, conditions and values, highly
questionable and improbable.  An asset classified as loss is considered
uncollectible.  Federal regulations also designate a "special mention" category,
described as assets which do not currently expose the Bank to a sufficient
degree of risk to warrant classification but do possess credit deficiencies or
potential weaknesses deserving management's close attention.

     The Bank's collection procedures provide that when a loan becomes 10 days
delinquent, the borrower is contacted by mail and payment is requested.  If the
delinquency continues, subsequent efforts are made to contact and request
payment from the delinquent borrower.  Most loan delinquencies are cured within
60 days and no legal action is required.  In certain circumstances, the Bank,
for a fee, may modify the loan, grant a limited moratorium on loan payments or
revise the payment schedule to enable the borrower to restructure his or her
financial affairs.  The Bank has restructured loans as of

                                      -14-
<PAGE>

December 31, 1999, which totaled approximately $103,000. Generally, the Bank
stops accruing interest on delinquent loans when payment is in arrears for 90
days (unless the obligation is both well secured and in the process of
collection) or when collection otherwise becomes doubtful. If the delinquency
exceeds 120 days and is not cured through the Bank's normal collection
procedures or through a restructuring, the Bank will institute measures to
enforce its remedies resulting from the default, including commencing a
foreclosure, repossession or collection action. In certain cases, the Bank will
consider accepting a voluntary conveyance of collateral in lieu of foreclosure
or repossession. Real property acquired by the Bank as a result of foreclosure
or by deed in lieu of foreclosure is classified as "real estate owned" until it
is sold and is carried at the lower of cost (defined as fair value at
foreclosure) or fair value less estimated costs to dispose. Accounting standards
define fair value as the amount that is expected to be received in a current
sale between a willing buyer and seller other than in a forced or liquidation
sale. Fair values at foreclosure are based on appraisals. Losses arising from
the acquisition of foreclosed properties are charged against the allowance for
loan losses. Subsequent write-downs are provided by a charge to income through
losses on other real estate in the period in which the need arises.

     The Bank attempts to sell real estate owned promptly after foreclosure, and
it sold $83,030 of real estate owned due to loan foreclosures during the year
ended December 31, 1999.  The book value of real estate owned that was sold by
the Bank during the year ended December 31, 1999 totaled  $79,258.  As of
December 31, 1999, there was $191,986 in real estate owned as a result of
foreclosure.

     CLC's loan portfolio is periodically reviewed by CLC's management to
identify deficiencies and to take corrective actions as necessary.  All past due
loans are reviewed daily by each CLC Office Manager and monthly by CLC's senior
management.  CLC's Board of Directors reviews the total loans considered over 90
days delinquent in their bi-monthly meetings.  The Board compares delinquency
rates on an office-by-office basis.  CLC's collection procedures provide that
when a loan becomes 5 days delinquent, the borrower is contacted by mail and
payment is requested.  If the delinquency continues, subsequent efforts are made
to contact and request payment from the delinquent borrower.  Most loan
delinquencies are cured within 90 days and no legal action is required.
Generally, when an account reaches 90 to 120 days with no payment collected in
that time frame, notice will be mailed to the customer stating that CLC is
taking legal action against them unless the account is brought to a current
status within 10 days.  If the customer does not respond within that time frame,
CLC typically will file suit against the parties involved in the local
Magistrate Court.  Generally, CLC's policy is to charge off any loan on which
CLC has not received a payment in 6 months.  Management may determine that a
loan is in the process of collection and, therefore, the past due loan does not
have to be charged off.  CLC's loans which are past due 90 days or more total
$440,064 as of December 31, 1999, as compared to $104,132 as of December 31,
1998.  Management attributes some of the growth in past due loans to the fact
that CLC experienced a 99.49% growth in its loan portfolio during 1999.

                                      -15-
<PAGE>

     The following table sets forth information regarding the Company's
delinquent and non-performing assets as of the dates indicated.


TABLE 6 - Non-performing Assets
(Dollar amounts in thousands)
                                            At December 31,
                                            ---------------
                                             1999     1998
                                            -------  ------
Non-performing assets:

Accruing loans which are contractually
  past due 90 days or more................  $  440   $ 177

Nonaccruing loans.........................     525     555

Real estate acquired through foreclosure..     192      48

Property acquired through repossession....     -0-      10
                                            ------   -----

      Total...............................  $1,157   $ 790
                                            ======   =====

Ratio of non-performing assets to:

Total loans and real estate acquired
   through foreclosure and repossessions..    1.29%   1.06%

Total assets..............................    0.88%   0.73%

     The Bank recorded interest income on the nonaccruing loans listed above for
the fiscal year ended December 31, 1999 of $22,037.  The gross interest income
that would have been recorded during the fiscal year ended December 31, 1999 if
the nonaccruing loans listed above had been current in accordance with their
original terms would have been $46,563.

Allowance for Loan Losses

     The allowance for loan losses is a means of absorbing future losses which
could be incurred from the current loan portfolio.  Both the Bank and CLC
maintain an allowance for loan losses, and management adjusts the general
allowances monthly by charges to income in response to changes to outstanding
loan balances.

     The Bank maintains a general allowance in the range of 1.00% to 1.50% of
the total principal amount of loans outstanding (less the total principal amount
of loans outstanding that are secured by certificates of deposit), and
management adjusts the general allowance monthly by charges to income in
response to changes in the outstanding loan balance and changes in the asset
quality ratings.  Management also may establish specific loan loss allowances
for specific loans after considering such factors as past delinquencies on the
loan, the value of the underlying collateral and the size of the loan.  The Bank
began a special allowance in 1996 equal to 4% of the outstanding balances in its
credit card portfolio, in acknowledgment of the risk related with this type of
credit product.  This portfolio was sold in February 2000, therefore the special
allowance for the Bank's credit card portfolio will not be necessary after one
year from the date of the sale.  Additionally, in 1998 the Bank began a special
allowance based on risks associated with Year 2000.  As of this time, management
is not aware of any specific loan problems which require the loan loss allowance
due to Y2K issues.  The special allowance related to Year 2000 risks will be
absorbed into the general allowance as soon as management deems appropriate.  A
loan or portion thereof is charged off against the general allowance when
management has determined that losses on such loans are probable.  Recoveries on
any loans charged off in prior

                                      -16-
<PAGE>

fiscal periods are credited to the allowance. It is the opinion of the Bank's
management that the balance in the general allowance for loan losses as of
December 31, 1999 is adequate to absorb possible losses from loans currently in
the portfolio.

     CLC maintains a general allowance for possible loan losses, in addition to
the fact that a majority of the loans in CLC's portfolio are insured in case of
default by the borrower.  CLC may be reimbursed for any covered loan balance
which goes into default.  CLC's Board of Directors reviews the general allowance
for loan loss on a bimonthly basis to review its adequacy in covering any future
losses that may be sustained by CLC.

     The following table summarizes the Company's loan loss experience for the
periods indicated.

TABLE 7 - Analysis of the Allowance for Loan Losses
(Dollar amounts in thousands)
                                                      Years Ended December 31,
                                                      ------------------------
                                                        1999             1998
                                                       ------           ------
Allowance for possible loan losses,
 beginning of the period.............................  $  935            $ 829

Charge-offs for the period:
   Commercial, financial, and agricultural...........       9               14
   Real estate - construction........................       0                0
   Real estate - mortgage............................      20                0
   Consumer..........................................     384              254
                                                       ------            -----

  Total charge-offs..................................     413              268
                                                       ------            -----

Recoveries for the period:
   Commercial, financial, and agricultural...........  $   13            $   5
   Real estate - construction........................       0                0
   Real estate - mortgage............................       0                0
   Consumer..........................................      50               33
                                                       ------            -----

  Total recoveries...................................      63               38
                                                       ------            -----

Net charge-offs for the period.......................     350              230
                                                       ------            -----

Allowance for loan losses acquired...................      77                0
                                                       ------            -----

Provision for loan losses charged to earnings........     695              336
                                                       ------            -----

Allowance for possible loan losses,
  end of the period..................................  $1,357            $ 935
                                                       ======            =====

Ratio of allowance for loan losses to
  total average loans outstanding....................    1.64%            1.46%

Ratio of net charge-offs during
  the period to average loans
  outstanding during the period......................    0.42%            0.36%

                                      -17-
<PAGE>

     In addition to the Bank's loan rating system for problem assets described
above (see Problem Loans, above), the Bank has established a loan rating system
for all categories of loans which assists management and the Board of Directors
in determining the adequacy of the Bank's allowance for loan losses.  Each loan
in the Bank's portfolio is assigned a rating which is reviewed by management
periodically to ensure its continued suitability.  An exception is made in the
case of (i) monthly installment loans which are grouped together by delinquency
status such as over 10, 30, 60, or 90 days past due and (ii) problem assets
which are rated as substandard, doubtful, or loss as discussed above.  All other
loans are assigned a rating that consists of five categories ranging from
excellent to "special mention".  Loans rated in each of these five loan rating
categories are weighted by factors ranging from of 0.50% to 5.00% that
management believes reasonably reflects losses that can be anticipated with
respect to loans in each of these categories.  Loans in the substandard,
doubtful, or loss categories are weighted by factors of 15%, 50% and 100%,
respectively.  Based on these weightings, the Bank's management establishes an
allowance for loan losses that is reviewed by its Board of Directors each month.
Additionally, management takes into consideration other factors such as the
amount of loans committed but unfunded, changes in the economy, and other
issues, in order to establish an allowance for loan losses.

     The following table sets forth the Company's allocation of the allowance
for loan losses as of December 31, 1999, and 1998.


TABLE 8 - Allocation of the Allowance for Loan Losses
(Dollar amounts in thousands)

<TABLE>
<CAPTION>
                                                At December 31, 1999        At December 31, 1998
                                              --------------------------  ------------------------
                                                        Percent of loans          Percent of loans
                                                        in each category          in each category
Balance at end of period applicable to          Amount   to total loans   Amount   to total loans
--------------------------------------        ---------  ---------------  ------  ----------------
<S>                                           <C>        <C>              <C>     <C>
Commercial, financial, and agricultural.....     $   73           12.46%    $ 89             13.64%
Real estate - construction..................         84           18.50%     103             16.97%
Real estate - mortgage......................        603           55.08%     416             54.24%
Consumer....................................        350           13.96%     127             15.15%
Unallocated.................................        247             N/A      200               N/A
                                                 ------          ------     ----            ------

     Total..................................     $1,357          100.00%    $935            100.00%
                                                 ======          ======     ====            ======
</TABLE>

Investment Activities
---------------------

     Interest earned on securities and other investments provides the second
largest source of revenues for the Company after interest on loans, constituting
$1,311,294 or 10.60% of total interest and other income for the year ended
December 31, 1999, as compared to $1,286,839, or 12.40%, respectively, as

                                      -18-
<PAGE>

of December 31, 1998. The Company's investment portfolio totaled $27,226,422 or
20.66% of total assets at December 31, 1999, as compared to $22,368,036, or
20.80%, respectively, as of December 31, 1998. The entire investment portfolio
is held by the Bank. The portfolio is designed to enhance liquidity while
providing acceptable rates of return.

     The following table sets forth the carrying value of the Bank's investments
at the dates indicated.  All securities held are available for sale and are
carried at fair market value.


TABLE 9 - Investment Securities
(Dollar amounts in thousands)
                                                         At  December 31,
                                                     -------------------------
                                                        1999              1998
                                                     -------           -------
     U.S. Government and agency
       obligations.................................  $18,486           $14,246
     Other bonds, notes, debentures
       and securities..............................    1,115               919
     States & political subdivisions - tax-exempt..    7,625             7,203
                                                     -------           -------

        Total......................................  $27,226           $22,368
                                                     =======           =======

     The following table sets forth the carrying value of the Bank's investments
at December 31, 1999, the weighted average yields on the Bank's investments at
December 31, 1999 and the periods to maturity of the Bank's investments from
December 31, 1999.


TABLE 10 - Expected Maturities of Investment Securities
(Dollar amounts in thousands)

<TABLE>
<CAPTION>
                                       Periods to Maturity from December 31, 1999
                               ------------------------------------------------------------
                               1 year or less   1 - 5 years   5 - 10 years   Over 10 years
                               ---------------  ------------  -------------  --------------
                                   Amount          Amount        Amount          Amount
                               ---------------  ------------  -------------  --------------
<S>                            <C>              <C>           <C>            <C>
U. S. Government and
   agency Obligations........          $5,483        $6,733         $3,668          $  136
U. S. Government agencies -
   mortgage-backed...........             -0-           270            585           1,611
Tax-exempt
   municipal bonds...........             406         2,675          2,412           2,132
Other bonds, notes, de-
   bentures, and securities..           1,115           -0-            -0-             -0-
                                       ------        ------         ------          ------

   Total.....................          $7,004        $9,678         $6,665          $3,879
                                       ======        ======         ======          ======

Weighted average yield.......            6.17%         7.59%          6.71%           7.27%
</TABLE>
(1) The weighted average yields on tax-exempt securities have been computed on
    a tax-equivalent basis.

                                      -19-
<PAGE>

Sources of Funds
----------------

General

     Time, money market, savings and demand deposits are the major source of the
Company's funds for lending and other investment purposes.  All deposits are
held by the Bank.  In addition, the Company obtains funds from loan principal
repayments, proceeds from sales of loan participations and investment
securities, and other borrowings.  Loan repayments are a relatively stable
source of funds, while deposit inflows and outflows and sales of loan
participations and investment securities are significantly influenced by
prevailing interest rates, economic conditions and the Company's asset and
liability management strategies.  Borrowings may be used on a short-term basis
to compensate for reductions in the availability of other sources of funds or on
a longer term basis to support expanded lending activities and for other general
business purposes.

Deposits

The Bank offers several types of deposit accounts, with the principal
differences relating to the minimum balances required, the time period the funds
must remain on deposit and the interest rate.  Deposits are obtained primarily
from the Bank's Paulding and Cobb Counties market area.  The Bank has an
Internet branch via its website, where new customers may open a deposit account
with little concern about geographic location.  The Bank has partnered with a
vendor which provides customers with a bill paying service and the ability to
conduct funds transfers via a secure Internet connection.  The Bank has
implemented stringent security measures in order to provide the ease of Internet
banking while maintaining safety measures deemed necessary by management.  The
Bank also subscribes to a service called QwickRate, which allows the Bank to
publish its rates on certificates of deposits over an electronic billboard that
may attract interested depositors throughout the U.S.  The Bank may choose to
seek deposits through this alternative source of funds if management determines
that the choice meets the Company's asset and liability strategies.  Management
of the Bank sets the rates to be offered, which have been slightly higher than
the rates paid on core deposits.  The Bank utilized this service for the first
time in 1999, with $6,055,045 outstanding in these time deposits for the year
ended December 31, 1999.  Additionally, a new product offered by the Bank allows
certain commercial customers the flexibility of employing funds that might
otherwise remain in deposit balances to invest in repurchase agreements so that
the customer may earn interest overnight.  Securities sold under repurchase
agreements totaled $4,880,864 at December 31, 1999.

     A principal source of deposits for the Bank consists of short-term money
market and other accounts which are highly responsive to changes in market
interest rates.  Accordingly, the Bank, like all financial institutions, is
subject to short-term fluctuations in deposits in response to customer actions
due to changing short-term market interest rates.  The ability of the Bank to
attract and maintain deposits

                                      -20-
<PAGE>

and the Bank's cost of funds have been and will continue to be significantly
affected by money market conditions.

     The following table sets forth the maturity distribution of time deposits
of $100,000 or more at December 31, 1999.

TABLE 11 - Maturities of Time Deposits of $100,000 and greater
(Dollar amounts in thousands)

                                   Time Deposits
                                 $100,000 or more
                                 ----------------
3 months or less.................        $ 6,052
Over 3 months through 6 months...          3,744
Over 6 months through 12 months..          5,077
Over 12 months...................          5,211
                                         -------
 Total outstanding...............        $20,084
                                         =======

Borrowings

     The Bank maintains two lines of credit to borrow fed funds that total
$5,300,000 in order to enhance liquidity.  At December 31, 1999, the Bank had no
funds borrowed on either of these lines of credit.  The Bank is a member of the
Federal Home Loan Bank of Atlanta and borrowings are also available through that
relationship.  The amount of credit available from the Federal Home Loan Bank
fluctuates based on criteria set by that institution concerning the Bank's
portfolio of loans secured by housing for one to four families.  As of December
31, 1999, the Bank had $5,500,000 in borrowings outstanding under this facility.
No additional borrowings were available to the Bank as of December 31, 1999
based on the Bank's loan portfolio.

     The Company has a $3,500,000 revolving credit facility with The Bankers
Bank, Atlanta, Georgia, which is intended to enhance the Company's liquidity.
As of December 31, 1999, the Company had no funds borrowed under this facility.
Additionally, CLC established a $1,500,000 revolving credit facility with The
Bankers Bank in July 1999, which is intended to provide a source of funds for
the lending activities of that subsidiary.  As of December 31, 1999, CLC had
$790,000 in borrowed funds outstanding under this facility.  As of July 1999,
the operations of CashTrans are funded principally through a $1,000,000 credit
facility with The Bankers Bank.  As of December 31, 1999, CashTrans had $775,000
in borrowed funds outstanding under this facility.  Under these revolving credit
facilities with The Bankers Bank, interest only is due and payable on the first
business day of each calendar quarter.  The Company's credit facility (i)
accrues interest at a floating rate equal to the "prime" rate of interest as
published from time to time in The Wall Street Journal minus 1%, and (ii) the
                               -----------------------
principal shall be paid in eight annual installments beginning July 2001.  CLC's
and CashTrans' credit facilities (i) accrue interest at a floating rate equal to
the prime rate minus 0.75%, and (ii) are due in full on July 1, 2000.  Amounts
outstanding under the three credit facilities are guaranteed by the Company and
collateralized by the stock in the Bank.  CLC's loan is also collateralized by
its loan receivables.  CashTrans' loan is personally guaranteed by James R.
Henderson, the principal of JRH Diversified, Inc.

                                      -21-
<PAGE>

Competition
-----------

     Based on total assets of $126,661,817 as of December 31, 1999, the Bank is
presently one of the smaller financial institutions with offices in Paulding and
Cobb Counties.  The Bank faces strong competition for deposits and loans from
numerous other financial institutions, some of which are community banks that
expanded their services from adjacent counties into Paulding County.  Larger
financial institutions have greater resources and lending limits than the Bank,
and typically have more branch offices.  A federal credit union owned by the
employees of a local public utility company also has a branch in Paulding
County.  Since credit unions are not subject to income taxes in the way that
commercial banks are taxed, credit unions have an advantage in offering
competitive rates to potential customers.  The Bank also competes for deposits
and loans with commercial banks and thrift institutions in metropolitan Atlanta,
some of which are affiliated with large regional financial institutions.  The
Bank also faces competition in certain areas of its business from mortgage
banking companies, consumer finance companies, insurance companies, money market
mutual funds and investment banking firms, some of which are not subject to the
same degree of regulation as the Bank.

     The Bank competes for deposits principally by offering depositors a variety
of deposit programs with competitive interest rates, quality service and
convenient locations and hours.  The Bank competes for loans by offering
competitive interest rates and loan fees, timely processing and quality service.
The Bank believes that its relatively small size permits it to offer more
personalized services than many of its competitors.

     The competitive pressures among commercial banks, thrift institutions and
other financial services entities have increased significantly in recent years
and are expected to continue to do so.  The establishment of money market
accounts and the elimination of rate controls for interest rates paid on
deposits in the early 1980s, for example, have increased the competition for
deposits and tend to increase the Bank's cost of funds, especially during
periods of high interest rates.

     Within Georgia, competition among financial institutions is increasing due
to a number of factors including, but not limited to, the acquisition of
Georgia-based financial institutions by out-of-state financial institutions. In
addition to facing increased competition from out-of-state financial
institutions, Georgia-based financial institutions are now likely to face
increased competition from other Georgia-based banks since effective July 1,
1998, Georgia now permits unrestricted state-wide branching.


Employees
---------

     As of December 31, 1999, the Bank had 78 full-time and 19 part-time
employees, Metroplex had 2 full-time employees and 2 part-time employees, CLC
had 27 full-time and 1 part-time employees, CashTrans had 4 full-time employees
and 9 part-time employees, and the Company had 6 full-time employees and 1 part-
time employee.  No employees are covered by collective bargaining agreements,
and the Company considers its relationship with its employees to be excellent.

                                      -22-
<PAGE>

Supervision and Regulation
--------------------------

General

     As a bank holding company, the Company is subject to regulation by the
Board of Governors of the Federal Reserve System (the Federal Reserve) pursuant
to the Bank Holding Company Act of 1956, as amended (BHCA) and by the Georgia
Department pursuant to the Financial Institutions Code of Georgia (FICG).  The
Company also is required to file certain reports with, and otherwise comply with
the rules and regulations of, the Securities and Exchange Commission (the
Commission) under federal securities laws.

     The Bank is a state bank and is subject to the supervision of, and is
regularly examined by, the Georgia Department.  In addition, the Bank's deposit
accounts are insured up to applicable limits by the bank insurance fund of the
Federal Deposit Insurance Corporation (the FDIC) and the Bank, therefore, is
subject to regulation by the FDIC.

     To the extent that the following information describes statutory and
regulatory provisions, it is qualified in its entirety by reference to the
particular statutory and regulatory provisions.  Any change in applicable laws
or regulations may have a material effect on the business and prospects of the
Company and the Bank.

Regulation of the Company

     General.  As the bank holding company for the Bank, the Company is subject
to the supervision and regulation by the Federal Reserve and the Georgia
Department.  As a bank holding company, the Company is required to file with the
Federal Reserve an annual report and such additional information as the Federal
Reserve may require pursuant to the BHCA.  The Company also files an annual
registration with the Georgia Department pursuant to FICG.  The Federal Reserve
and the Georgia Department also may make examinations of the Company and each of
its subsidiaries.

     Regulatory Capital Requirements. The Federal Reserve and the FDIC have
issued substantially similar risk-based and leverage capital guidelines
applicable to United States banking organizations.  In addition, those
regulatory agencies may from time to time require that a banking organization
maintain capital above the minimum levels, whether because of its financial
condition or actual or anticipated growth.  The Federal Reserve's risk-based
guidelines define a two-tier capital framework.  Tier 1 capital consists of
common and qualifying preferred shareholders' equity, less certain intangibles
and other adjustments.  Tier 2 capital consists of subordinated and other
qualifying debt, and the allowance for credit losses up to 1.25% of risk-
weighted assets.  The sum of Tier 1 and Tier 2 capital less investments in
unconsolidated subsidiaries represents qualifying total capital, at least 50% of
which must consist of Tier 1 capital.  Risk-based capital ratios are calculated
by dividing Tier 1 and total capital by risk-weighted assets.  Assets and off-
balance sheet exposures are assigned to one of four categories of risk-weights,
based primarily on relative credit risk.  The minimum Tier 1 capital ratio is 4%
and the minimum total capital ratio is 8%.  The Company's Tier 1 and total risk-
based capital ratios under these guidelines at December 31, 1999 were 14.16% and
15.41% respectively.

     The leverage ratio is determined by dividing Tier 1 capital by adjusted
average total assets.  Although the stated minimum ratio is 3%, all but the most
highly rated bank holding companies are

                                      -23-
<PAGE>

required by the Federal Reserve to maintain a minimum leverage ratio of 4% to
5%. The Georgia Department requires a minimum Tier 1 capital to adjusted total
assets ratio of 4%. The Company's leverage ratio at December 31, 1999 was
11.00%.

     If the capital of a bank holding company falls below minimum required
levels, the bank holding company may be denied approval to acquire or establish
additional banks or non-bank businesses.  According to Federal Reserve policy,
bank holding companies are expected to act as a source of financial strength to
a subsidiary bank and to commit resources to support such subsidiary.  This
support may be required at times when a bank holding company may not be able to
provide such support.

     Change of Control and Permissible Activities.  Bank holding companies are
required by the BHCA to obtain approval from the Federal Reserve prior to
acquiring, directly or indirectly, ownership or control of more than 5% of the
outstanding shares of any class of voting stock of any bank or bank holding
company.

     The BHCA also prohibits bank holding companies, with certain exceptions,
from acquiring more than 5% of the voting shares of any company that is not a
bank, and from engaging in any business other than banking or managing or
controlling banks or other permissible subsidiaries.  The Federal Reserve is
authorized to approve, among other things, the ownership of shares by a bank
holding company in any company the activities of which the Federal Reserve has
determined to be so closely related to banking or to managing or controlling
banks as to be a proper incident thereto.  Additionally, the Federal Reserve, by
regulation, has deemed certain nonbanking activities to be permissible
activities and has exempted such activities from the prior approval
requirements, although notice to and review by the Federal Reserve of such
activities would be necessary before the Company could engage de novo in such
activities.  The Federal Reserve is empowered to differentiate between
activities that are initiated de novo by a bank holding company or a subsidiary
and activities commenced by acquisition of a going concern.

     However, the activities permissible to bank holding companies and their
affiliates were substantially expanded by the Gramm-Leach-Bliley Act, which the
President signed on November 12, 1999.   Gramm-Leach-Bliley repeals the anti-
affiliation provisions of the Glass-Steagall Act to permit the common ownership
of commercial banks, investment banks and insurance companies.  The BHCA was
amended to permit a financial holding company to engage in any activity and
acquire and retain any company that the Federal Reserve determines to be (a)
financial in nature or incidental to such financial activity or (b)
complementary to a financial activity and does not pose a substantial risk to
the safety and soundness of depository institutions or the financial system
generally.  The Federal Reserve must consult with the Secretary of the Treasury
in determining whether an activity is financial in nature or incidental to a
financial activity.  Holding companies may continue to own companies conducting
activities which had been approved by Federal order or regulation on the day
before Gramm-Leach-Bliley was enacted.

     Additionally, the Federal Change in Bank Control Act requires 60 days'
prior written notice to the appropriate federal bank regulatory agency before
any person may acquire "control" of a bank or bank holding company.  The
appropriate federal bank regulatory agency with respect to acquisitions of
control of a state non-member bank, such as the Bank, is the FDIC, and the
appropriate federal bank regulatory agency with respect to acquisitions of
control of a bank holding company, such as the Company, is the Federal Reserve.

                                      -24-
<PAGE>

     Under existing Federal Reserve regulations, "control" is presumed to exist
where the acquiring party (which includes a group "acting in concert") (a) owns,
controls, or holds with power to vote 25% or more of any class of voting
securities of the institution, or (b) owns, controls, or holds with power to
vote 10% or more of any class of voting securities of the institution, if (i)
the institution has registered securities under Section 12 of the Securities
Exchange Act of 1934, or (ii) no other person will own a greater percentage of
that class of voting securities immediately following the transaction.

     Supervisory and Enforcement Powers.  The Federal Reserve has been granted
enforcement powers over bank holding companies and non-banking subsidiaries to
forestall activities that represent unsafe or unsound practices or constitute
violations of law.  These powers may be exercised through the issuance of cease-
and-desist orders or other actions.  The Federal Reserve also is empowered to
assess civil money penalties against companies or individuals who violate the
BHCA or orders or regulations thereunder, to order termination of non-banking
activities of non-banking subsidiaries of bank holding companies and to order
termination of ownership and control of a non-banking subsidiary by a bank
holding company.  Certain violations may also result in criminal penalties.

     Restrictions on Transactions with Affiliates.  The Company, Metroplex,
CashTrans and CLC are "affiliates" of the Bank under the Federal Reserve Act,
which imposes certain restrictions on (i) loans by the Bank to the Company, (ii)
investments in the stock or securities of the Company by the Bank, (iii) the
Bank's accepting the stock or securities of one of its affiliates from a
borrower as collateral for loans and (iv) the purchase of assets from the
Company by Bank.  Further, under the BHCA, a bank holding company and its
subsidiaries are prohibited from engaging in certain tie-in arrangements in
connection with any grant of credit, lease or sale of property or furnishing of
services.

     Miscellaneous.  Most bank holding companies are required to give the
Federal Reserve prior written notice of any purchase or redemption of their
outstanding equity securities if the gross consideration for the purchase or
redemption, when combined with the net consideration paid for all such purchases
or redemptions during the preceding 12 months, is equal to 10% or more of the
bank holding company's consolidated net worth.  The Federal Reserve may
disapprove such a purchase or redemption if it determines that the proposal
constitutes an unsafe or unsound practice, would violate any law, regulation,
Federal Reserve order or directive or any condition imposed by, or written
agreement with, the Federal Reserve.  The prior notice requirement does not
apply to certain "well-capitalized" bank holding companies that meet specified
criteria.

     In November 1985, the Federal Reserve adopted its Policy Statement on Cash
Dividends Not Fully Covered by Earnings.  The Policy Statement sets forth
various guidelines that the Federal Reserve believes that a bank holding company
should follow in establishing its dividend policy.  In general, the Federal
Reserve stated that bank holding companies should not pay dividends except out
of current earnings and unless the prospective rate of earnings retention by the
holding company appears consistent with its capital needs, asset quality and
overall financial condition.

      The Community Reinvestment Act requires federal bank regulatory agencies
to encourage financial institutions to meet the credit needs of low-and-
moderate-income borrowers in their local communities.  An institution's size and
business strategy determines the type of examination that it will receive.
Large, retail-oriented institutions will be examined using a performance-based
lending, investment and service test.  Small institutions will be examined using
a streamlined approach.   All

                                      -25-
<PAGE>

institutions may opt to be evaluated under a strategic plan formulated with
community input and pre-approved by the bank regulatory agency.

     Community Reinvestment Act regulations provide for certain disclosure
obligations.  Each institution must post a notice advising the public of its
right to comment to the institution and its regulator on the institution's
Community Reinvestment Act performance and to review the institution's Community
Reinvestment Act public file.  Each lending institution must maintain for public
inspection a public file that includes a listing of branch locations and
services, a summary of lending activity, a map of its communities and any
written comments from the public on its performance in meeting community credit
needs.  The Community Reinvestment Act requires public disclosure of a financial
institution's written Community Reinvestment Act evaluations.  This promotes
enforcement of Community Reinvestment Act requirements by providing the public
with the status of a particular institution's community reinvestment record.

     The recently enacted Gramm-Leach-Bliley Act makes various changes to CRA.
Among other changes, CRA agreements with private parties must be disclosed and
annual CRA reports must be made to a bank's primary federal regulator.  A bank
holding company will not be permitted to become a financial holding company and
no new activities authorized under this Act may be commenced by a holding
company or by a bank financial subsidiary if any of its bank subsidiaries
received less than a "satisfactory" CRA rating in its latest CRA examination.

     On November 12, 1999, the President signed the Gramm-Leach-Bliley Act into
law.  The Act:

     .  allows bank holding companies meeting management, capital and CRA
        standards to engage in a substantially broader range of nonbanking
        activities than currently is permissible, including insurance
        underwriting and making merchant banking investments in commercial and
        financial companies;

     .  allows insurers and other financial services companies to acquire banks;

     .  removes various restrictions that currently apply to bank holding
        company ownership of securities firms and mutual fund advisory
        companies; and

     .  establishes the overall regulatory structure applicable to bank holding
        companies that also engage in insurance and securities operations.

     This part of the Act became effective on March 11, 2000.

     The Act also modifies current law related to financial privacy and
community reinvestment.  The new financial privacy provisions will generally
prohibit financial institutions from disclosing nonpublic personal financial
information to third parties unless customers have the opportunity to "opt out"
of the disclosure.


     Georgia Law.  The Company also is a bank holding company within the meaning
of the FICG, which provides without limitation that, without the prior approval
of the Georgia Department, it is

                                      -26-
<PAGE>

unlawful (i) for any action to be taken that causes a company to become a bank
holding company, (ii) for any bank holding company to acquire direct or indirect
ownership or control of more than 5% of the voting shares of any bank, (iii) for
any bank holding company or subsidiary thereof, other than a bank, to acquire
all or substantially all of the assets of a bank, (iv) for any action to be
taken that causes a bank to become a subsidiary of a bank holding company or (v)
for any bank holding company to merge or consolidate with any other bank holding
company. It also is unlawful for any company to acquire direct or indirect
ownership or control of more than 5% of the voting shares of any bank in Georgia
unless such bank has been in existence and continuously operating as a bank for
a period of five years or more prior to the date of application to the Georgia
Department for approval of such acquisition. One bank holding companies, such as
the Company, are prohibited from acquiring another bank until their initial bank
subsidiary has been incorporated for a period of at least two years.

Regulation of the Bank

     General.  The Bank is a commercial bank chartered under the laws of the
State of Georgia and its deposit accounts are insured up to applicable limits by
the Bank Insurance Fund (BIF) of the FDIC.  The Bank is subject to the
regulation, examination and supervision of the Georgia Department and the FDIC.
Both the Georgia Department and the FDIC issue regulations and require the
filing of reports describing the activities and financial condition of the banks
under their jurisdiction.  Each agency conducts periodic examinations to test
compliance with various regulatory requirements and generally supervises the
operation of such banks.  This supervision and regulation are intended primarily
for the protection of depositors.  As an FDIC-insured, state-chartered bank, the
Bank may not enter into certain transactions unless applicable regulatory tests
are met or it obtains the prior approval of the regulatory agencies.  For
instance, the approval of the Georgia Department and the FDIC are required prior
to any merger or consolidation or the establishment of an office at which
banking business is conducted.  The Bank also is regulated in certain respects
by the Federal Reserve.

     Georgia Law.  The Bank derives its lending and investment authority
primarily from the applicable provisions of the FICG and the rules and
regulations promulgated thereunder by the Georgia Department.  Under these laws
and regulations, commercial banks, including the Bank, may invest in real estate
mortgages, commercial and consumer loans, certain types of securities, including
certain corporate debt and equity securities, asset backed securities, and
obligations of federal, state and local governments and agencies, and certain
other assets.  A Georgia chartered bank's lending powers generally are subject
to certain restrictions, including limits on amounts loaned to one borrower.
Additionally, the exercise by an FDIC insured commercial bank of the lending and
investment powers of a commercial bank under the FICG may be limited by FDIC
regulations.

     Georgia commercial banks may, with the approval of the Georgia Department,
merge or consolidate with another bank, trust company or other corporation as
long as the resulting institution is a bank or trust company engaged only in the
business of a bank or trust company.  Additionally, a bank may sell, lease,
exchange or otherwise dispose of all or substantially all of its property and
assets with the approval of the Georgia Department.

     The FICG prohibits the payment of dividends by a state chartered bank if
such bank is insolvent or would thereby be rendered insolvent, if such dividend
is contrary to restrictions contained in the bank's articles of incorporation,
if the dividend would be paid from other than retained earnings or if the bank
does not have the required amount of paid-in capital and appropriated retained
earnings.  In

                                      -27-
<PAGE>

addition, pursuant to regulations adopted by the Georgia Department, a Georgia-
chartered bank must have the approval of the Georgia Department to pay cash
dividends, unless at the time of such payment (i) the total classified assets at
the most recent examination of the bank do not exceed 80% of the bank's equity
capital and reserves as reflected by such examination; (ii) 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, of the bank
for the previous calendar year; and (iii) the ratio of the bank's equity
capital, as defined, to adjusted total assets, as defined, is not less than 6%.

     Under FICG, the Georgia Department may issue orders to a Georgia chartered
bank to submit to an investigation by the Georgia Department, to discontinue
unauthorized or unsafe practices or to keep prescribed books and accounts.  If
the Georgia Department finds that any director or officer of any banking
organization has violated any law or duly enacted regulation, or has continued
unauthorized or unsafe practices in conducting the business of the banking
organization after being notified by the Georgia Department to discontinue such
practices, or has been indicted for any crime involving moral turpitude or
breach of trust, or has filed for bankruptcy protection from creditors, the
Georgia Department may remove such director or officer from office.  No director
or officer of the Bank has been found by the Georgia Department to have engaged
in, or has been investigated by the Georgia Department with respect to, any of
such activities.

Insurance of Accounts

     Deposits of the Bank are insured by the FDIC to a maximum of $100,000 for
each insured depositor through the Bank Insurance Fund.  As an insurer, the FDIC
issues regulations, conducts examinations and generally supervises the
operations of its insured institutions (institutions insured by the FDIC
hereinafter are referred to as "insured institutions").  Any insured institution
which does not operate in accordance with or conform to FDIC regulations,
policies and directives may be sanctioned for non-compliance.  For example,
proceedings may be instituted against an insured institution if the institution
or any director, officer or employee thereof engages in unsafe and unsound
practices, is operating in an unsafe or unsound condition, or has violated any
applicable law, regulation, rule, order or condition imposed by the FDIC.  If
insurance of accounts is terminated by the FDIC, the deposits in the institution
will continue to be insured by the FDIC for a period of two years following the
date of termination.  The FDIC requires an annual audit by independent
accountants and also periodically makes its own examinations of insured
institutions.  The FDIC may revalue assets of an institution, based upon
appraisals, and require establishment of specific reserves in amounts equal to
the difference between such reevaluation and the book value of the assets.

     The FDIC has adopted a risk-related deposit insurance system.  Under the
risk-related insurance regulations, each insured depository institution is
assigned to one of three risk classifications: "well capitalized," "adequately
capitalized," or "under capitalized."  Within each risk classification, there
are three subgroups.  Each insured depository institution is assigned to one of
these subgroups within its risk classification based upon supervisory
evaluations submitted to the FDIC by the institution's primary federal
regulator.  Depending upon a BIF member's risk classification and subgroup,
applicable regulations provide that its deposit insurance premium may be as low
as .04% of insured deposits or as high as .31% of insured deposits.  The Bank
has been notified that, based on its risk classification and supervisory
subgroup, its BIF assessment rate is zero percent of insured deposits for the
period from January 1, to June 30, 2000.  This is the most favorable assessment
rate applicable to any insured institution.  However, the Deposit Insurance
Funds Act of 1996 (DIFA) requires that a Financing

                                      -28-
<PAGE>

Corporation (FICO) assessment be paid by the Bank in 2000. The annual FICO
assessment rate for banks is presently .0212% of deposits. The Bank paid $10,248
in assessments, which was the minimum set by the FDIC for that period, during
the year ended December 31, 1999.

     The FDIC has issued risk-based and leverage capital guidelines similar to
that issued by the Federal Reserve and discussed above.  At December 31, 1999,
the Bank had Tier 1 capital of $10,388,000, or 8.13% of total average assets.

     Certain provisions of the Federal Reserve Act, made applicable to the Bank
by Section 18(j) of the Federal Deposit Insurance Act (12 U.S.C. (S)1828(j)) and
administered with respect to the Bank by the FDIC, establish standards for the
terms of, limit the amount of and establish collateral requirements with respect
to any loans or extensions of credit to, and investments in, affiliates by the
Bank as well as set arms-length criteria for such transactions and for certain
other transactions (including payment by the Bank for services) between the Bank
and its affiliates.  In addition, related provisions of the Federal Reserve Act
and the Federal Reserve regulations (also administered with respect to the Bank
by the FDIC) limit the amounts of, and establish required procedures and credit
standards with respect to, loans and other extensions of credit to officers,
directors and principal shareholders of the Bank and to related interests of
such persons.

     The FDIC may impose sanctions on any insured bank that does not operate in
accordance with FDIC regulations, policies and directives.  Proceedings may be
instituted against any insured bank or any director, officer or employee of the
bank that is believed by the FDIC to be engaged in unsafe or unsound practices,
including violation of applicable laws and regulations.  The FDIC may revalue
assets of an institution, based upon appraisals, and may require the
establishment of specific reserves in amounts equal to the difference between
such revaluation and the book value of the assets.  The FDIC also is empowered
to assess civil penalties against companies or individuals who violate certain
federal statutes, orders or regulations.  In addition, the FDIC has the
authority to terminate insurance of accounts, after notice and hearing, upon a
finding by the FDIC that the insured institution is or has engaged in any unsafe
or unsound practice that has not been corrected, or is in an unsafe or unsound
condition to continue operations or has violated any applicable law, regulation,
rule or order of, or condition imposed by, the FDIC.  The Bank does not know of
any past or current practice, condition or violation that might lead to
termination of its deposit insurance or to any proceeding by the FDIC against
the Bank or any of its directors, officers or employees.

     Federal Reserve.  Although the Bank is not a member of the Federal Reserve
System, it is subject to Federal Reserve regulations that require it to maintain
reserves against its transaction accounts (primarily checking accounts).
Because reserves generally must be maintained in cash or in non-interest bearing
accounts, the effect of the reserve requirements is to increase the Bank's cost
of funds.  The Federal Reserve regulations currently require that average daily
reserves be maintained against transaction accounts in the amount of 3% of the
aggregate of such net transaction accounts up to $46.5 million, plus 10% of the
total in excess of $46.5 million.

     Prompt Corrective Action.  The Federal Deposit Insurance Act (FDIA), among
other things, requires the federal regulatory agencies to take "prompt
corrective action" if a depository institution does not meet minimum capital
requirements.  The FDIA establishes five capital tiers:  "well capitalized;"
"adequately capitalized;" "undercapitalized;" "significantly undercapitalized;"
and "critically undercapitalized."  A depository institution's capital tier will
depend upon how its capital

                                      -29-
<PAGE>

levels compare to various relevant capital measures and certain other factors,
as established by regulation.

     The federal bank regulatory agencies have adopted regulations establishing
relevant capital measures and relevant capital levels applicable to FDIC-insured
banks.  The relevant capital measures are the total capital ratio, tier 1
capital ratio and the leverage ratio.  Under the regulations, a FDIC-insured
bank will be:

          "well capitalized" if it has a total capital ratio of 10% or greater,
          a tier 1 capital ratio of 6% or greater and a leverage ratio of 5% or
          greater and is not subject to any order or written directive by the
          appropriate regulatory authority to meet and maintain a specific
          capital level for any capital measure;

          "adequately capitalized" if it has a total capital ratio of 8% or
          greater, a tier 1 capital ratio of 4% or greater and a leverage ratio
          of 4% or greater (3% in certain circumstances) and is not "well
          capitalized;"

          "under capitalized" if it has a total capital ratio of less than 8%, a
          tier 1 capital ratio of less than 4% or a leverage ratio of less than
          4% (3% in certain circumstances);

          "significantly undercapitalized" if it has a total capital ratio of
          less than 6%, a tier 1 capital ratio of less than 3% or a leverage
          ratio of less than 3%; and

          "critically undercapitalized" if its tangible equity is equal to or
          less than 2% of average quarterly tangible assets.

     An institution may be downgraded to, or deemed to be in, a capital category
that is lower than is indicated by its capital ratios if it is determined to be
in an unsafe or unsound condition or if it receives an unsatisfactory
examination rating with respect to certain matters.  As of December 31, 1999,
the Company and the Bank each had capital levels that qualify each as being
"well capitalized" under such regulations.

     The FDIA generally prohibits a FDIC-insured bank from making any capital
distribution (including payment of a dividend) or paying any management fee to
its holding company if the bank would thereafter be "undercapitalized."
"Undercapitalized" banks are subject to growth limitations and are required to
submit a capital restoration plan.  The federal regulators may not accept a
capital plan without determining, among other things, that the plan is based on
realistic assumptions and is likely to succeed in restoring the bank's capital.
In addition, for a capital restoration plan to be acceptable, the bank's parent
holding company must guarantee that the institution will comply with such
capital restoration plan.  The aggregate liability of the parent holding company
is limited to the lesser of:  (i) an amount equal to 5% of the bank's total
assets at the time it became "undercapitalized;" and (ii) the amount which is
necessary (or would have been necessary) to bring the institution into
compliance with all capital standards applicable with respect to such
institution as of the time it fails to comply with the plan.  If a bank fails to
submit an acceptable plan, it is treated as if it is "significantly
undercapitalized."

     "Significantly undercapitalized" insured banks may be subject to a number
of requirements and restrictions, including orders to sell sufficient voting
stock to become "adequately capitalized,"

                                      -30-
<PAGE>

requirements to reduce total assets, and cessation of receipt of deposits from
correspondent banks. "Critically undercapitalized" institutions are subject to
the appointment of a receiver or conservator. A bank that is not "well
capitalized" is subject to certain limitations relating to so-called "brokered"
deposits.

Other Legislation

     In September 1994, the federal Riegle-Neal Interstate Banking and Branching
Efficiency Act was enacted.  The Act allows bank holding companies, beginning
one year following enactment of the legislation, to acquire existing banks
across state lines, regardless of state statutes.  Beginning in June 1997, banks
were permitted to consolidate interstate subsidiaries into branches and merge
with a bank across state lines to the extent that the applicable states had not
"opted out of interstate branching" prior to the effectiveness of the branching
provisions.  The Act also permits de novo branching to the extent that a
particular state opts into the de novo branching provisions.  The Act provides a
concentration limitation with a nationwide limitation of 10% of total deposits
of insured depository institutions in the United States and 30% of total
deposits of insured depository institutions in a specific state.

     The Riegle Community Development and Regulatory Improvement Act of 1994
also was enacted in September 1994, and provides for the creation of a community
development financial institutions fund to promote economic revitalization in
community development.  Banks and savings institutions are allowed to
participate in such community development banks.  The Act also contains
provisions designed to enhance small business capital formation and to enhance
disclosure with regard to high cost mortgages for the protection of consumers.
The Act also contains more than 50 regulatory relief provisions that apply to
banks and savings institutions including the coordination of examinations by
various federal agencies, coordination of frequency and types of reports
financial institutions are required to file and reduction of examinations for
well-capitalized institutions.

     The Georgia legislature enacted legislation which, effective July 1, 1996,
allowed Georgia-based banks to branch into up to three counties in addition to
the county in which their main office is located.  This same legislation
eliminated all branching restrictions, thereby permitting unrestricted state-
wide branching, effective July 1, 1998.

Regulation of CLC

     As a consumer finance company, CLC is subject to regulation by the
Commissioner of Insurance of the State of Georgia, also known as the Georgia
Industrial Loan Commissioner (the Commissioner), pursuant to the Georgia
Industrial Loan Act (the GILA).  CLC is required to file certain reports and
such additional information as the Commissioner may require pursuant to the
GILA, and is subject to periodic examinations of its books, accounts, and
records by the Commissioner's duly authorized representatives.  Each office of
CLC is licensed by the Commissioner separately, and, if CLC wishes to move an
office within a county, written notice must be given to the Commissioner
supplying facts and circumstances showing how the removal to a new location will
promote the convenience and advantage of that community.  Licenses must be
renewed on an annual basis.  CLC may loan any sum of money not to exceed $3,000
for a period not to exceed 36 months and 15 days and may charge, contract for,
collect, and receive interest and fees on said loans, pursuant to the GILA.

     As a subsidiary of the Company, CLC also is subject to examination by the
Federal Reserve

                                      -31-
<PAGE>

pursuant to the BHCA and by the Georgia Department pursuant to the FICG. The
Federal Reserve and the Georgia Department also may make examinations of CLC.


ITEM 2.  DESCRIPTION OF PROPERTY
--------------------------------

     The Company and the Bank operate from a main office and five branch offices
in Paulding and Cobb Counties in Georgia.  The main office, built in 1988 and
located at 3844 Atlanta Highway in Hiram, Georgia, contains approximately 16,000
square feet.  The Bank owns the land and the building at this location.  The
Company pays rent for the use the premises, equipment and furniture of the Bank.
Metroplex and CashTrans lease office space in Dallas, Georgia.  CLC leases
office space in the Georgia cities of Woodstock, Rockmart, Rossville,
Gainesville, Dalton, Oakwood, Rome, Dahlonega, and two in Cartersville.

     The Bank opened a full service branch office at 100 Hardee Street, Dallas,
Paulding County, Georgia in June 1991.  The Bank leases the land and owns the
building at this location, which contains approximately 1,150 square feet and
includes three teller stations and two drive-in window teller stations.  The
lease on this property has been extended until June 2002.  In December 1991, the
Bank also opened a full service office located in the Kroger grocery store of
the Paulding Commons Shopping Center, 4215 Jimmy Lee Smith Parkway in Hiram,
Georgia.  The Bank leases its office space in the grocery store and owns the
furniture, fixtures and equipment used in the Bank office.  In April 1998, the
Company entered into a lease for the Bank's limited services facility at Barrett
Court in Kennesaw, Georgia which is located in the Town Center area of Cobb
County.  In January 1999, the Bank opened a full service office at 3161 Cobb
Parkway, Suite 100, Kennesaw, Georgia which is located in the Butler Crossing
Shopping Center.  The Bank leases its office space in the shopping center and
owns the furniture, fixtures, and equipment used in the Bank office.  In January
2000, the Bank opened a full service office at 1690 Powder Springs Road SW,
Building 300 Suite A, Marietta, Georgia which is located in the Battle Ridge
Shopping Center.  The Bank leases its office space in the shopping center and
owns the furniture, fixtures, and equipment used in the Bank office.

     At December 31, 1999, the cost of office properties and equipment (less
allowances for depreciation and amortization) owned by the Company was
$3,994,220.  Data processing services are provided by an outside service bureau.

     The Company believes that its facilities are adequate and suitable for the
Company's current business and its anticipated business for the foreseeable
future.

     The Company is unaware of any potential environmental liability that it may
incur in connection with any properties or other assets owned by it.

     None of the properties owned by the Company or the Bank is subject to
encumbrances.

                                      -32-
<PAGE>

ITEM 3.  LEGAL PROCEEDINGS
--------------------------

     There are no material legal proceedings to which the Company or the Bank is
a party or to which any of their properties is subject.  The Bank and CLC are
periodically involved as a plaintiff or defendant in various legal actions in
the ordinary course of its business.


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

     No matters were submitted to a vote of shareholders of the Company during
the fourth quarter of the Company's fiscal year ended December 31, 1999.



                                 PART II
                                 -------


ITEM 5. MARKET FOR THE COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
--------------------------------------------------------------------

     Information relating to the market for, holders of and dividends paid on
the Company's Common Stock is set forth under the caption "Selected Annual
Consolidated Financial Data" in the Company's 1999 Annual Report to
Stockholders.  Such information is incorporated herein by reference.

     The Company's ability to pay dividends is dependent on dividends paid by
the Bank, if any.  Additionally, Georgia law imposes certain restrictions on the
payment of cash dividends by the Bank.  See "Item 1. Business - Supervision and
Regulation."


ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
------------------------------------------------------------------

     Selected consolidated financial data for the Company for each of the five
fiscal years ending December 31, 1999, 1998, 1997, 1996, and 1995 are set forth
under the caption "Selected Annual Consolidated Financial Data" in the Company's
1999 Annual Report to Stockholders.  Such information is incorporated herein by
reference.  A discussion of the Company's financial condition and results of
operations at and for the dates and periods covered by the consolidated
financial statements of the Company is set forth in the Company's 1999 Annual
Report to Stockholders  under the caption "Management's Discussion and Analysis
of Financial Condition and Results of Operations."  Such discussion is
incorporated herein by reference.


ITEM 7.  FINANCIAL STATEMENTS
-----------------------------

     The following consolidated financial statements of the Company, together
with the Report of Independent Certified Public Accountants thereon, which are
set forth in the Company's 1999 Annual Report to Stockholders, are incorporated
herein by reference:

                                      -33-
<PAGE>

     Consolidated Balance Sheets as of December 31, 1999 and 1998

     Consolidated Statements of Earnings for the years ended
      December 31, 1999, 1998 and 1997

     Consolidated Statements of Comprehensive Income for the years ended
      December 31, 1999, 1998 and 1997

     Consolidated Statements of Changes in Stockholders' Equity for
      the years ended December 31, 1999, 1998 and 1997

     Consolidated Statements of Cash Flows for the years ended
      December 31, 1999, 1998 and 1997

     Notes to Consolidated Financial Statements



ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
------------------------------------------------------------------------
FINANCIAL DISCLOSURE
--------------------

     Neither the Company nor the Bank had any change in accountants or
disagreements with accountants on accounting and financial disclosure during the
two most recent fiscal years or subsequently.


                                 PART III
                                 --------


ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
----------------------------------------------------------------------
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
-------------------------------------------------

     Information relating to the Directors of the Company is set forth under the
caption "Proposal 1 - Election of Directors" on pages 4 through 8 of the Proxy
Statement for the Company's 2000 Annual Meeting of Shareholders (2000 Proxy
Statement).  Such information is incorporated herein by reference.  Information
relating to the executive officers of the Company is set forth under the caption
"Proposal 1 - Election of Directors - Officers" on page 9 of the 2000 Proxy
Statement.  One Director of the Company failed to file on a timely basis a
report required by Section 16(a) of the Securities Exchange Act of 1934 during
the most recent fiscal year.  Mr. Drummond failed to file in a timely manner the
report relating to his commencement as a Director of the Company. Other than as
described here, to the Company's knowledge, based solely on review of the copies
of such reports furnished to the Company or written representations that no
other reports were required, each person who, at any time during the year ended
December 31, 1999, was a Director, Executive Officer, or beneficial owner of
more than ten percent of the Company's Common Stock filed, on a timely basis,
all reports required to be filed by them, during such year, pursuant to Section
16(a) of the Securities Exchange Act of 1934.

                                      -34-
<PAGE>

ITEM 10.  EXECUTIVE COMPENSATION
--------------------------------

     Information relating to executive compensation is set forth under the
caption "Proposal 1 - Election of Directors - Compensation of Directors" on page
9 of the 2000 Proxy Statement and under the caption "Proposal 1 - Election of
Directors - Executive Compensation" on pages 10 through 13 of the 2000 Proxy
Statement and under the caption "Proposal 1 - Election of Directors -
Transactions with Management" on page 12 of the 2000 Proxy Statement.  Such
information is incorporated herein by reference.


ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
------------------------------------------------------------------------

     Information regarding ownership of the Company's $2.50 par value Common
Stock by certain persons is set forth under the captions "Voting - Principal
Stockholders" on page 2 of the 2000 Proxy Statement and "Proposal 1 - Election
of Directors - Nominees" on pages 4 through 8 of the 2000 Proxy Statement.  Such
information is incorporated herein by reference.


ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
--------------------------------------------------------

     Information regarding certain transactions between the Company and
Directors, executive officers and certain shareholders, and their affiliates, is
set forth under the caption "Proposal 1 - Election of Directors - Transactions
with Management" on page 12 of the 2000 Proxy Statement.  Such information is
incorporated herein by reference.


ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K
------------------------------------------
     (a)  Exhibits

     The following exhibits are filed as a part of or incorporated by reference
in this report:

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

      2.1      Purchase Agreement dated May 1, 1999 between the Company and
               Drummond Association Inc.

      3.1* +   Articles of Incorporation of the Company

                                      -35-
<PAGE>

               (Amendment to Articles of Incorporation filed as Exhibit 3.1 to
               the Company's Annual Report on Form 10-KSB for the year ended
               December 31, 1999)

      3.2      Bylaws of the Company
               (filed as Exhibit 3.2 to the Company's Quarterly Report on Form
               10-QSB for the quarter ended September 30, 1998)

      4.       The rights of security holders are defined in the Articles of
               Incorporation and Bylaws provided in exhibit 3.1 and 3.2,
               respectively.

      10.1*    1988 Stock Option Plan and related specimen copy of option

      10.2 +   1993 Employee Stock Option Plan
               (Amended Plan filed as Exhibit 10.2 to the Company's Annual
               Report on Form 10-KSB for the year ended December 31, 1999)

      10.3  +  1993 Directors Stock Option Plan
               (Amended Plan filed as Exhibit 10.3 to the Company's Annual
               Report on Form 10-KSB for the year ended December 31, 1999)

      10.5     Lease dated June 9, 1989 by and between First Baptist Church of
               Dallas, Georgia and the Bank relating to lease of real property
               (Filed as Exhibit 10.5 to the Company's Annual Report on Form 10-
               k for the year ended December 31, 1992, as amended by lease
               extension agreement dated and filed as Exhibit 10.8 to the
               Company's Annual Report on Form 10-KSB for the year ended
               December 31, 1996)

      10.6     License and Equipment Purchase Agreement dated as of July 27,
               1991 by and between Bank South, National Association and
               Community Trust Bank relating to branch in Paulding Commons
               Kroger store
               (Filed as Exhibit 10.6 to the Company's Annual Report on Form 10-
               K for the year ended December 31, 1992)

      10.7     Lease dated May 25, 1995 by and between Brock Investments, Inc.,
               of Hiram, Georgia and the Bank relating to lease of real property
               (Filed as Exhibit 10.7 to the Company's Annual Report on Form 10-
               K for the year ended December 31, 1995)

      10.9     Loan and Stock Pledge Agreement dated November 14, 1998, between
               the Company and The Bankers Bank
               (Filed as Exhibit 2 to the Company's Current Report on Form 8-K
               dated November 14, 1997)

     10.10 +   Employment Agreement dated January 1, 1998, between the Company
               and Ronnie Austin
               (Amended Agreement filed as Exhibit 10.10 to the Company's Annual
               Report on Form 10-KSB for the year ended December 31, 1999)

                                      -36-
<PAGE>

     10.11     Employment Agreement dated July 1, 1999, between CLC and Danny
               Drummond
               (Filed as Exhibit 10.11 to the Company's Quarterly Report on Form
               10-QSB for the quarter ended September 30, 1999)

     10.12 +   Executive Supplemental Retirement Plan - Executive Agreement
               dated January 13, 2000 between the Bank and Ronnie Austin
               (Filed as Exhibit 10.12 to the Company's Annual Report on Form
               10-KSB for the year ended December 31, 1999)

     10.13 +   Life Insurance Endorsement Method Split Dollar Plan Agreement
               dated January 13, 2000 between the Bank and Ronnie Austin
               (Filed as Exhibit 10.13 to the Company's Annual Report on Form
               10-KSB for the year ended December 31, 1999)

     10.14 +   Deferred Compensation Plan for Key Employees and Directors
               (Filed as Exhibit 10.14 to the Company's Annual Report on Form
               10-KSB for the year ended December 31, 1999)

     10.15 +   Director's Delayed Compensation Plan Agreement dated October 26,
               1999 between the Bank and R. Alan Bullock
               (Filed as Exhibit 10.15 to the Company's Annual Report on Form
               10-KSB for the year ended December 31, 1999)

     10.16 +   Director's Delayed Compensation Plan Agreement dated October 26,
               1999 between the Bank and Bobbie P. Cooper
               (Filed as Exhibit 10.16 to the Company's Annual Report on Form
               10-KSB for the year ended December 31, 1999)

     10.17 +   Director's Delayed Compensation Plan Agreement dated October 26,
               1999 between the Bank and J. Calvin Earwood
               (Filed as Exhibit 10.17 to the Company's Annual Report on Form
               10-KSB for the year ended December 31, 1999)

     10.18 +   Director's Delayed Compensation Plan Agreement dated October 26,
               1999 between the Bank and William A. Foster III
               (Filed as Exhibit 10.18 to the Company's Annual Report on Form
               10-KSB for the year ended December 31, 1999)

     10.19 +   Director's Delayed Compensation Plan Agreement dated October 26,
               1999 between the Bank and Tommie R. Graham Jr.
               (Filed as Exhibit 10.19 to the Company's Annual Report on Form
               10-KSB for the year ended December 31, 1999)

     10.20 +   Director's Delayed Compensation Plan Agreement dated October 26,
               1999 between the Bank and John C. Helms

                                      -37-
<PAGE>

               (Filed as Exhibit 10.20 to the Company's Annual Report on Form
               10-KSB for the year ended December 31, 1999)

      13.+     1999 Annual Report**

      21.+     Subsidiaries

      27.+     Financial Data Schedule (electronic filing only)
----------
*Incorporated herein by reference to the exhibit of the same number in the
Company's Registration Statement on Form S-4, as amended (No. 33-37601).

** Certain sections of the Company's 1999 Annual Report, as indicated in this
report, are incorporated herein by reference.  Other than as noted herein, the
Company's 1999 Annual Report is furnished to the Commission solely for its
information and is not deemed to be "filed" with the Commission or subject to
the liabilities of Section 18 of the Securities Exchange Act of 1934.

+ Filed herewith.


      (b)  Reports on Form 8-K

      One report on Form 8-K was filed by the Company with the Commission during
the quarter ended December 31, 1999 concerning a two-for-one stock dividend
which was paid on January 28, 2000 to shareholders of record on January 18,
2000.

                                   SIGNATURES

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

                    COMMUNITY TRUST FINANCIAL SERVICES CORPORATION
                                        (Registrant)

Date: March 28, 2000     By:  /s/Ronnie L. Austin
                              --------------------
                              Ronnie L. Austin
                              President and Chief Executive Officer


                         By:  /s/Angel J. Byrd
                              ----------------
                              Angel J. Byrd
                              Comptroller
                              (principal accounting officer)

                                      -38-
<PAGE>

     In accordance with the Securities Exchange Act of 1934, this report has
been signed below by the following persons on behalf of the Registrant and in
the capacities indicated on March 28, 2000.

     Signature                           Title
     ---------                           -----


/s/W. A. Foster III                   Chairman of the Board
-------------------
W. A. Foster III


/s/Ronnie L. Austin                   President, Chief Executive Officer and
-------------------                   Director (principal executive officer)
Ronnie L. Austin


/s/George Berry                       Director
---------------
George Berry


/s/R. Alan Bullock                    Director
------------------
R. Alan Bullock


/s/Bobbie P. Cooper                   Director
-------------------
Bobbie P. Cooper


/s/Danny Drummond                     Director
-----------------
Danny Drummond


/s/J. Calvin Earwood                  Director
--------------------
J. Calvin Earwood


/s/Tommie R. Graham                   Director
-------------------
Tommie R. Graham

                                      -39-
<PAGE>

                         INDEX OF EXHIBITS
                         -----------------

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

     3.1* +    Articles of Incorporation of the Company
               (Amendment to Articles of Incorporation filed as Exhibit 3.1 to
               the Company's Annual Report on Form 10-KSB for the year ended
               December 31, 1999)

     10.2 +    1993 Employee Stock Option Plan
               (Amended Plan filed as Exhibit 10.2 to the Company's Annual
               Report on Form 10-KSB for the year ended December 31, 1999)

     10.3 +    1993 Directors Stock Option Plan
               (Amended Plan filed as Exhibit 10.3 to the Company's Annual
               Report on Form 10-KSB for the year ended December 31, 1999)

    10.10 +    Employment Agreement dated January 1, 1998, between the Company
               and Ronnie Austin
               (Amended Agreement filed as Exhibit 10.10 to the Company's Annual
               Report on Form 10-KSB for the year ended December 31, 1999)

    10.12 +    Executive Supplemental Retirement Plan - Executive Agreement
               dated January 13, 2000 between the Bank and Ronnie Austin
               (Filed as Exhibit 10.12 to the Company's Annual Report on Form
               10-KSB for the year ended December 31, 1999)

    10.13 +    Life Insurance Endorsement Method Split Dollar Plan Agreement
               dated January 13, 2000 between the Bank and Ronnie Austin
               (Filed as Exhibit 10.13 to the Company's Annual Report on Form
               10-KSB for the year ended December 31, 1999)

    10.14 +    Deferred Compensation Plan for Key Employees and Directors
               (Filed as Exhibit 10.14 to the Company's Annual Report on Form
               10-KSB for the year ended December 31, 1999)

    10.15 +    Director's Delayed Compensation Plan Agreement dated October 26,
               1999 between the Bank and R. Alan Bullock
               (Filed as Exhibit 10.15 to the Company's Annual Report on Form
               10-KSB for the year ended December 31, 1999)

    10.16 +    Director's Delayed Compensation Plan Agreement dated October 26,
               1999 between the Bank and Bobbie P. Cooper
               (Filed as Exhibit 10.16 to the Company's Annual Report on Form
               10-KSB for the year ended December 31, 1999)

                                      -40-
<PAGE>

    10.17 +    Director's Delayed Compensation Plan Agreement dated October 26,
               1999 between the Bank and J. Calvin Earwood
               (Filed as Exhibit 10.17 to the Company's Annual Report on Form
               10-KSB for the year ended December 31, 1999)

    10.18 +    Director's Delayed Compensation Plan Agreement dated October 26,
               1999 between the Bank and William A. Foster III
               (Filed as Exhibit 10.18 to the Company's Annual Report on Form
               10-KSB for the year ended December 31, 1999)

    10.19 +    Director's Delayed Compensation Plan Agreement dated October 26,
               1999 between the Bank and Tommie R. Graham Jr.
               (Filed as Exhibit 10.19 to the Company's Annual Report on Form
               10-KSB for the year ended December 31, 1999)

    10.20 +    Director's Delayed Compensation Plan Agreement dated October 26,
               1999 between the Bank and John C. Helms
               (Filed as Exhibit 10.20 to the Company's Annual Report on Form
               10-KSB for the year ended December 31, 1999)

      13.+     1999 Annual Report**

      21.+     Subsidiaries

      27.+     Financial Data Schedule (electronic filing only)
----------
*Incorporated herein by reference to the exhibit of the same number in the
Company's Registration Statement on Form S-4, as amended (No. 33-37601).

** Certain sections of the Company's 1999 Annual Report, as indicated in this
report, are incorporated herein by reference.  Other than as noted herein, the
Company's 1999 Annual Report is furnished to the Commission solely for its
information and is not deemed to be "filed" with the Commission or subject to
the liabilities of Section 18 of the Securities Exchange Act of 1934.

+ Filed herewith.

                                      -41-