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U.S. SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549

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FORM 10-QSB

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Mark One

| | x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
| | - | ---------------------------------------------------------------------------------------

| |  | For the quarterly period ended September 30, 2002
| |  | -------------------------------------------------

| | o | TRANSITION REPORT PURSUANT TO 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
| | - | --------------------------------------------------------------------------------

| |  | For the transition period from
                               to
| |  | ----------------------------------------------------------------

Commission File Number: 000-25227

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Capitol City Bancshares, Inc.(Exact name of small business issuer as specified in
its charter)

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| | Georgia(State or other jurisdiction ofincorporation or organization) |  | 58-2452995(IRS EmployerIdentification No.) | 
| | -------------------------------------------------------------------- |  | ------------------------------------------ | 

562 Lee Street, S.W., Atlanta, Georgia 30310(Address of principal executive offices)

(404)
752-6067(Issuers telephone number)

N/A(Former name, former address and former fiscal year, if changed since last
report)

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 o

State the number of
shares outstanding of each of the issuers classes of common equity, as of November 1, 2002: 532,088; $6 par value

Transitional Small Business Disclosure Format (Check One) Yes o
No x

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INDEX

|         |  |                       |  |                                                                                                                                      | Page
|-------- |  | --------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------ | ----
|         |  |                       |  |                                                                                                                                      |     
|Part I.  |  | Financial Information | 
|         |  |                       |  |                                                                                                                                      |     
|         |  | Item 1.               |  | Financial Statements (unaudited)                                                                                                     |     
|         |  |                       |  |                                                                                                                                      |     
|         |  |                       |  | Condensed Consolidated Balance Sheet as of September 30, 2002                                                                        | 3   
|         |  |                       |  |                                                                                                                                      |     
|         |  |                       |  | Condensed Consolidated Statements of Income and Comprehensive Income for the Three and Nine Months Ended September 30, 2002 and 2001 | 4   
|         |  |                       |  |                                                                                                                                      |     
|         |  |                       |  | Condensed Consolidated Statements of Cash Flows For The Nine Months Ended September 30, 2002 and 2001                                | 5   
|         |  |                       |  |                                                                                                                                      |     
|         |  |                       |  | Notes to Condensed Consolidated Financial Statements                                                                                 | 6   
|         |  |                       |  |                                                                                                                                      |     
|         |  | Item 2.               |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                                                | 7-11
|         |  |                       |  |                                                                                                                                      |     
|         |  | Item 3.               |  | Controls and Procedures                                                                                                              | 11  
|         |  |                       |  |                                                                                                                                      |     
|Part II. |  | Other Information     | 
|         |  |                       |  |                                                                                                                                      |     
|         |  | Item 4.               |  | Submission of Matters to a Vote of Security Holders                                                                                  | 12  
|         |  |                       |  |                                                                                                                                      |     
|         |  | Item 6.               |  | Exhibits and Reports on Form 8-K                                                                                                     | 12  

|               |      
|-------------- | -----
|Signatures     | 13   
|               |      
|Certifications | 14-19



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PART I -
FINANCIAL INFORMATION

|ITEM I. | FINANCIAL STATEMENTS
|------- | --------------------

CAPITOL CITY BANCSHARES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE
SHEETSEPTEMBER 30, 2002(Unaudited)

|Assets                                                   |  |   |             | 
|-------------------------------------------------------- |  | - | ----------- | 
|                                                         |  |   |             | 
|Cash and due from banks                                  |  | $ | 628,745     | 
|Interest bearing deposits in banks                       |  |   | 75,682      | 
|Federal funds sold                                       |  |   | 2,998,000   | 
|Securities available-for-sale, at fair value             |  |   | 33,251,488  | 
|Restricted equity securities, at cost                    |  |   | 117,500     | 
|                                                         |  |   |             | 
|Loans                                                    |  |   | 60,068,407  | 
|Less allowance for loan losses                           |  |   | 799,593     | 
|                                                         |  |   |            
|Loans, net                                               |  |   | 59,268,814  | 
|                                                         |  |   |            
|                                                         |  |   |             | 
|Premises and equipment                                   |  |   | 4,212,652   | 
|Other assets                                             |  |   | 693,465     | 
|                                                         |  |   |            
|                                                         |  |   |             | 
|Total assets                                             |  | $ | 101,246,346 | 
|                                                         |  |   |            
|                                                         |  |   |             | 
|Liabilities and Stockholders Equity                     |  |   |             | 
|                                                         |  |   |             | 
|Deposits                                                 |  |   |             | 
|Noninterest-bearing                                      |  | $ | 22,582,306  | 
|Interest-bearing                                         |  |   | 66,272,680  | 
|                                                         |  |   |            
|Total deposits                                           |  |   | 88,854,986  | 
|Note payable                                             |  |   | 183,500     | 
|Securities sold under repurchase agreements              |  |   | 1,500,000   | 
|Other liabilities                                        |  |   | 983,186     | 
|                                                         |  |   |            
|Total liabilities                                        |  |   | 91,521,672  | 
|                                                         |  |   |            
|                                                         |  |   |             | 
|Stockholders equity                                     |  |   |             | 
|Common stock, par value $6; 5,000,000 shares authorized; |  |   |             | 
|532,088 shares issued and outstanding                    |  |   | 3,192,528   | 
|Capital surplus                                          |  |   | 2,128,352   | 
|Retained earnings                                        |  |   | 3,753,913   | 
|Accumulated other comprehensive income                   |  |   | 649,881     | 
|                                                         |  |   |            
|Total stockholders equity                               |  |   | 9,724,674   | 
|                                                         |  |   |            
|                                                         |  |   |             | 
|Total liabilities and stockholders equity               |  | $ | 101,246,346 | 
|                                                         |  |   |            

The accompanying notes are an integral part of thesecondensed consolidated financial statements.





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CAPITOL CITY BANCSHARES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOMEFOR THE THREE AND NINE MONTHS
ENDED SEPTEMBER 30, 2002 AND 2001(Unaudited)

|                                                                                           |  | Three Months EndedSeptember 30, |           | Nine Months EndedSeptember 30, |  
|------------------------------------------------------------------------------------------ |  | ------------------------------- | --------- | ------------------------------ | -
|                                                                                           |  |                                 |           |                                |  
|                                                                                           |  | 2002                            |           | 2001                           |  
|                                                                                           |  |                                 |           |                                |  
|                                                                                           |  |                                 |           |                                |  
|Interest income                                                                            |  |                                 |           |                                |  
|Loans                                                                                      |  | $                               | 1,278,279 |                                | $
|Taxable securities                                                                         |  |                                 | 211,650   |                                |  
|Nontaxable securities                                                                      |  |                                 | 124,588   |                                |  
|Federal funds sold                                                                         |  |                                 | 8,616     |                                |  
|                                                                                           |  |                                 |           |                                |  
|Total interest income                                                                      |  |                                 | 1,623,133 |                                |  
|                                                                                           |  |                                 |           |                                |  
|                                                                                           |  |                                 |           |                                |  
|Interest expense                                                                           |  |                                 |           |                                |  
|Deposits                                                                                   |  |                                 | 502,803   |                                |  
|Other borrowings                                                                           |  |                                 | 1,560     |                                |  
|                                                                                           |  |                                 |           |                                |  
|                                                                                           |  |                                 | 504,363   |                                |  
|                                                                                           |  |                                 |           |                                |  
|                                                                                           |  |                                 |           |                                |  
|Net interest income                                                                        |  |                                 | 1,118,770 |                                |  
|Provision for loan losses                                                                  |  |                                 | 50,000    |                                |  
|                                                                                           |  |                                 |           |                                |  
|Net interest income after provision for loan losses                                        |  |                                 | 1,068,770 |                                |  
|                                                                                           |  |                                 |           |                                |  
|                                                                                           |  |                                 |           |                                |  
|Other income                                                                               |  |                                 |           |                                |  
|Service charges on deposit accounts                                                        |  |                                 | 454,261   |                                |  
|Other fees and commissions                                                                 |  |                                 | 23,235    |                                |  
|Gain on sale of securities available-for-sale                                              |  |                                 |          |                                |  
|Other operating income                                                                     |  |                                 | 6,593     |                                |  
|                                                                                           |  |                                 |           |                                |  
|Total other income                                                                         |  |                                 | 484,089   |                                |  
|                                                                                           |  |                                 |           |                                |  
|                                                                                           |  |                                 |           |                                |  
|Other expenses                                                                             |  |                                 |           |                                |  
|Salaries and employee benefits                                                             |  |                                 | 559,500   |                                |  
|Occupancy and equipment expenses                                                           |  |                                 | 155,499   |                                |  
|Other operating expenses                                                                   |  |                                 | 493,008   |                                |  
|                                                                                           |  |                                 |           |                                |  
|Total other expenses                                                                       |  |                                 | 1,208,007 |                                |  
|                                                                                           |  |                                 |           |                                |  
|                                                                                           |  |                                 |           |                                |  
|Net income before income taxes                                                             |  |                                 | 344,852   |                                |  
|                                                                                           |  |                                 |           |                                |  
|Income tax expense                                                                         |  |                                 | 96,346    |                                |  
|                                                                                           |  |                                 |           |                                |  
|                                                                                           |  |                                 |           |                                |  
|Net income                                                                                 |  |                                 | 248,506   |                                |  
|                                                                                           |  |                                 |           |                                |  
|                                                                                           |  |                                 |           |                                |  
|Other comprehensive income                                                                 |  |                                 |           |                                |  
|Unrealized gains on securities available-for-sale        arising during period, net of tax |  |                                 | 256,402   |                                |  
|Reclassification adjustment for gains realized in net        income, net of tax            |  |                                 |          |                                |  
|                                                                                           |  |                                 |           |                                |  
|Other comprehensive income                                                                 |  |                                 | 256,402   |                                |  
|                                                                                           |  |                                 |           |                                |  
|                                                                                           |  |                                 |           |                                |  
|Comprehensive income                                                                       |  | $                               | 504,908   |                                | $
|                                                                                           |  |                                 |           |                                |  
|                                                                                           |  |                                 |           |                                |  
|Basic earnings per share                                                                   |  | $                               | 0.47      |                                | $
|                                                                                           |  |                                 |           |                                |  
|                                                                                           |  |                                 |           |                                |  
|Diluted earnings per share                                                                 |  | $                               | 0.44      |                                | $
|                                                                                           |  |                                 |           |                                |  
|                                                                                           |  |                                 |           |                                |  
|Cash dividends declared per share                                                          |  | $                               |          |                                | $
|                                                                                           |  |                                 |           |                                |  

The accompanying notes are an integral part of these consolidated financial statements.





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CAPITOL CITY BANCSHARES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWSFOR THE NINE MONTHS ENDED SEPTEMBER 30, 2002 AND
2001(Unaudited)

|                                                                                         |  | 2002 |             | 2001 |  
|---------------------------------------------------------------------------------------- |  | ---- | ----------- | ---- | -
|                                                                                         |  |      |             |      |  
|OPERATING ACTIVITIES                                                                     |  |      |             |      |  
|Net income                                                                               |  | $    | 935,275     |      | $
|Adjustments to reconcile net income to net cash provided by operating        activities: |  |      |             |      |  
|Depreciation                                                                             |  |      | 195,027     |      |  
|Provision for loan losses                                                                |  |      | 50,000      |      |  
|Gain on sale of securities                                                               |  |      |            |      |  
|Other operating activities                                                               |  |      | 149,044     |      |  
|                                                                                         |  |      |             |      |  
|                                                                                         |  |      |             |      |  
|Net cash provided by operating activities                                                |  |      | 1,329,346   |      |  
|                                                                                         |  |      |             |      |  
|                                                                                         |  |      |             |      |  
|INVESTING ACTIVITIES                                                                     |  |      |             |      |  
|Purchases of securities available-for-sale                                               |  |      | (11,525,123 | )    |  
|Proceeds from sale of securities available-for-sale                                      |  |      |            |      |  
|Proceeds from maturities of securities available-for-sale                                |  |      | 5,234,677   |      |  
|Net increase in interest-bearing deposits                                                |  |      | (5,664      | )    |  
|Net (increase) decrease in federal funds sold                                            |  |      | (45,000     | )    |  
|Net increase in loans                                                                    |  |      | (9,954,605  | )    |  
|Purchase of premises and equipment                                                       |  |      | (1,236,388  | )    |  
|Proceeds from sale of equipment                                                          |  |      |            |      |  
|                                                                                         |  |      |             |      |  
|                                                                                         |  |      |             |      |  
|Net cash used in investing activities                                                    |  |      | (17,532,103 | )    |  
|                                                                                         |  |      |             |      |  
|                                                                                         |  |      |             |      |  
|FINANCING ACTIVITIES                                                                     |  |      |             |      |  
|Net increase in deposits                                                                 |  |      | 12,765,952  |      |  
|Net increase in securities sold under repurchase agreements                              |  |      | 1,500,000   |      |  
|Payment of dividends                                                                     |  |      | (63,851     | )    |  
|                                                                                         |  |      |             |      |  
|                                                                                         |  |      |             |      |  
|Net cash provided by financing activities                                                |  |      | 14,202,101  |      |  
|                                                                                         |  |      |             |      |  
|                                                                                         |  |      |             |      |  
|Net decrease in cash and due from banks                                                  |  |      | (2,000,656  | )    |  
|                                                                                         |  |      |             |      |  
|Cash and due from banks, beginning of period                                             |  |      | 2,629,401   |      |  
|                                                                                         |  |      |             |      |  
|                                                                                         |  |      |             |      |  
|Cash and due from banks, end of period                                                   |  | $    | 628,745     |      | $
|                                                                                         |  |      |             |      |  

The accompanying notes are an integral part of these consolidated financial statements.





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CAPITOL CITY BANCSHARES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Unaudited)

|NOTE 1. | BASIS OF PRESENTATION
|------- | ---------------------

| |  | The consolidated financial information included for Capitol City Bancshares, Inc. (the Company), Capitol City Bank & Trust Company (the Bank) and Capitol City Home Loans (the Mortgage
Company) herein is unaudited; however, such information reflects all adjustments (consisting solely of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of results for the interim periods.
Capitol City Home Loans is a mortgage company organized and incorporated during the second quarter of 2002. The operations of the Mortgage Company through September 30, 2002 consist of organizational activities.
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | The results of operations for the three and nine month periods ended September 30, 2002 are not necessarily indicative of the results to be expected for the full year.
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------

|NOTE 2. | EARNINGS PER SHARE
|------- | ------------------

| |  | Presented below is a summary of the components used to calculate basic and diluted earnings per share for the periods ended September 30, 2002 and 2001.
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                                                                                                             |  | Three Months EndedSeptember 30, |         | Nine Months EndedSeptember 30, |  
|-------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------- | ------- | ------------------------------ | -
|                                                                                                                                             |  |                                 |         |                                |  
|                                                                                                                                             |  | 2002                            |         | 2001                           |  
|                                                                                                                                             |  |                                 |         |                                |  
|                                                                                                                                             |  |                                 |         |                                |  
|Net income                                                                                                                                   |  | $                               | 248,506 |                                | $
|                                                                                                                                             |  |                                 |         |                                |  
|                                                                                                                                             |  |                                 |         |                                |  
|Weighted average common shares outstanding                                                                                                   |  |                                 | 532,088 |                                |  
|Net effect of the assumed exercise of stock options based on the     treasury stock method using the average market price for the     period |  |                                 | 28,356  |                                |  
|                                                                                                                                             |  |                                 |         |                                |  
|                                                                                                                                             |  |                                 |         |                                |  
|Total weighted average common shares and common stock     equivalents outstanding                                                            |  |                                 | 560,444 |                                |  
|                                                                                                                                             |  |                                 |         |                                |  
|                                                                                                                                             |  |                                 |         |                                |  
|Diluted earnings per common share                                                                                                            |  | $                               | 0.44    |                                | $
|                                                                                                                                             |  |                                 |         |                                |  





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CAPITOL CITY BANCSHARES, INC. AND SUBSIDIARY

|Item 2. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND RESULTS OF OPERATIONS
|------- | ------------------------------------------------------------------------------------

The following is managements discussion and analysis of certain
significant factors which have affected our financial position and operating results during the periods included in the accompanying condensed consolidated financial statements.

FORWARD-LOOKING
STATEMENTS

This quarterly report contains certain forward-looking statements which are based on certain assumptions and describe future plans, strategies, and our expectations. These forward-looking
statements are generally identified by use of the words believe, expect, intend, anticipate, estimate, project, or similar expressions. Our ability to predict results or the
actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on our operations include, but are not limited to, changes in interest rates, general economic conditions, legislation and
regulation, monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Federal Reserve Board, the quality or composition of our loan and investment portfolios, demand for loan products, deposit flows,
competition, demand for financial services in our market area, and accounting principles and guidelines. You should consider these risks and uncertainties in evaluating forward-looking statements and should not place undue reliance on such
statements. We will not publicly release the result of any revisions which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or
unanticipated events.

FINANCIAL CONDITION

Total assets increased $15.9 million from $85.3 million to $101.2 million, or 18.7% for the nine months ended September 30,
2002. The increase in total assets in 2002 was 8.2% for the same period in 2001. The growth in both years continues to be funded primarily by increases in total deposits, which increased by $12.8 million and $4.7 million, respectively. The net
increase in total assets for the nine months ended September 30, 2002 consisted primarily of an increase of $9.9 million in total loans, a decrease of $2.0 million in cash and due from banks, an increase in securities of $7.1 million and an
increase of $1.0 million in premises and equipment. The increase in premises and equipment as compared to September 30, 2001 reflects the completion of our Albany, Georgia branch and the construction in process of our new operations center. The loan
to deposit ratio at September 30, 2002 and 2001 was 68% and 74.7%, respectively. The decline in the loan to deposit ratio is due to the significant growth in deposits over the past year.

Stockholders
equity increased by $1.4 million for the nine months ended September 30, 2002. This net increase consists of net income of $935,000 less dividends paid of $64,000 and an increase in unrealized gains on securities of $546,000.



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LIQUIDITY

Liquidity management involves the matching of the cash flow requirements of customer withdrawals of funds and the funding of loan
originations, and the ability of our subsidiary bank to meet those requirements. Management monitors and maintains appropriate levels of liquidity so that maturities of assets and deposit growth are such that adequate funds are provided to meet
estimated customer withdrawals and loan requests.

At September 30, 2002, the Banks liquidity ratio of 27.82% was considered satisfactory in relation to regulatory guidelines and internal target
ratios.

REGULATORY CAPITAL REQUIREMENTS

Banking regulations require us to maintain minimum capital levels in relation to assets. At September 30, 2002, the
Banks capital ratios were considered well capitalized based on regulatory minimum capital requirements. The minimum capital requirements and the actual capital ratios for the Bank at September 30, 2002 are as follows:

|                          |  | Bank |       | RegulatoryMinimumRequirement | 
|------------------------- |  | ---- | ----- | ---------------------------- | 
|                          |  |      |       |                              | 
|Leverage Capital Ratio    |  |      | 9.53  | %                            | 
|Risk-Based Capital Ratios |  |      |       |                              | 
|Core Capital              |  |      | 10.76 | %                            | 
|Total Capital             |  |      | 11.71 | %                            | 

We are not aware of any other recommendations by the regulatory authorities, events or trends, which, if they were to be implemented, would have a
material effect on our liquidity, capital resources, or operations.

RESULTS OF OPERATIONS

Net Interest Income. Net interest income
increased by $190,000 and $406,000 for the three and nine month periods ended September 30, 2002, respectively, compared to the same periods in 2001. The increase in net interest income for the three and nine month periods ended September 30, 2002
is attributable to an increase in earning assets of $23.7 million as compared to September 30, 2001. Loans increased from September 30, 2001 by $8.9 million, which provide the highest yields to the Company. The annualized net yield on total loans
for the nine months ended September 30, 2002 and 2001 was approximately 9.21% and 10.47%, respectively. During this same period, total deposits increased by $20 million, which included an increase of $16.5 million in interest-bearing deposits and an
increase of $3.5 million in non-interest bearing deposits.

The overall result of an increase or decrease in net interest income is based on the net interest margin which is the ratio of net interest income to
total interest earning assets.



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The net interest margin decreased to 5.14% at September 30, 2002 as compared to 5.26% at September 30, 2001. The slight decline in the net interest margin during 2002 was expected due to
the declines in interest rates over the past two years. In the current declining interest rate environment, out interest-earning assets have been repricing at a faster pace than our interest-bearing liabilities. We attempt to minimize the effects of
changes in interest rates by matching the maturities of interest-earning assets and interest-bearing liabilities.

Provision for Loan Losses.The provision for loan losses is based on
managements evaluation of the economic environment, the history of charged off loans and recoveries, size and composition of the loan portfolio, nonperforming and past due loans, and other aspects of the loan portfolio. We review the allowance
for loan loss on a quarterly basis and make provisions as necessary. A provision of $50,000 was made during the three and nine month periods ending September 30, 2002 based upon this evaluation process as compared to $280,000 for the nine month
period in 2001. The allowance for loan loss as a percentage of total loans was 1.33% at September 30, 2002 and 1.40% at September 30, 2001. The total nonperforming loans at September 30, 2002 increased to $1,074,000 compared to $819,000 at September
30, 2001 and $1,048,000 at June 30, 2002. Past due loans greater than ninety days increased to $454,000 from $51,000 at September 30, 2001. Net charge-offs for the nine months ended September 30, 2002 decreased by $225,000 as compared to the
same period in 2001. Management believes the allowance for loan loss at September 30, 2002 is adequate to meet any anticipated future losses in the loan portfolio. The decrease in the provision in 2002 as compared to 2001 reflects the decrease in
net charge-offs for the nine months ended September 30, 2002.

At September 30, 2002 and 2001, nonaccrual, past due, and restructured loans were as follows:

|                                                                                                             |  | September 30,2002      |       | September 30,2001 |  
|------------------------------------------------------------------------------------------------------------ |  | ---------------------- | ----- | ----------------- | -
|                                                                                                             |  |                        |       |                   |  
|                                                                                                             |  | (Dollars in thousands) |      
|Total nonaccruing loans                                                                                      |  | $                      | 1,074 |                   | $
|Loans contractually past due ninety days or more as to interest or     principal payments and still accruing |  |                        | 454   |                   |  
|Restructured loans                                                                                           |  |                        |      |                   |  

It is our policy to discontinue the accrual of interest income when, in the opinion of management, collection of such interest becomes doubtful. This status is accorded such
interest when (1) there is a significant deterioration in the financial condition of the borrower and full repayment of principal and interest is not expected or (2) the principal or interest is more than ninety days past due, unless the loan is
both well-secured and in the process of collection. Accrual of interest on such loans is resumed when, in managements judgment, the collection of interest and principal becomes probable.



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##### Table of Contents

Loans classified for regulatory purposes as loss, doubtful, substandard, or special mention that have not been included in the table above do not represent or result from trends or
uncertainties which management reasonably expects will materially impact future operating results, liquidity, or capital resources. These classified loans do not represent material credits about which management is aware of any information which
causes management to have serious doubts as to the ability of such borrowers to comply with the loan repayment terms.

Information regarding certain loans and allowance for loan loss data for the nine months
ended September 30, 2002 and 2001 is as follows:

|                                                                              |  | Nine Months EndedSeptember 30, |       
|----------------------------------------------------------------------------- |  | ------------------------------ | ------
|                                                                              |  |                                |       
|                                                                              |  | 2002                           |       
|                                                                              |  |                                |       
|                                                                              |  | (Dollars in thousands)         |       
|                                                                              |  |                                |       
|Average amount of loans outstanding for the period                            |  | $                              | 53,046
|                                                                              |  |                                |       
|                                                                              |  |                                |       
|Balance of allowance for loan losses at beginning of period                   |  | $                              | 770   
|                                                                              |  |                                |       
|Loans charged off                                                             |  |                                |       
|Commercial                                                                    |  |                                | (20   
|Real estate                                                                   |  |                                | (11   
|Installment                                                                   |  |                                | (149  
|                                                                              |  |                                |       
|                                                                              |  |                                | (180  
|                                                                              |  |                                |       
|Loans recovered                                                               |  |                                |       
|Commercial                                                                    |  |                                | 80    
|Real estate                                                                   |  |                                | 41    
|Installment                                                                   |  |                                | 39    
|                                                                              |  |                                |       
|                                                                              |  |                                | 160   
|                                                                              |  |                                |       
|                                                                              |  |                                |       
|Net charge-offs                                                               |  |                                | (20   
|                                                                              |  |                                |       
|                                                                              |  |                                |       
|Additions to allowance charged to operating expense during period             |  |                                | 50    
|                                                                              |  |                                |       
|                                                                              |  |                                |       
|Balance of allowance for loan losses at end of period                         |  |                                | 800   
|                                                                              |  |                                |       
|                                                                              |  |                                |       
|Ratio of net loans charged-off during the period to average loans outstanding |  |                                | .04   
|                                                                              |  |                                |       

Other Income.Other income increased by $36,000 and $75,000 for the three and nine months ended September 30, 2002, respectively, compared to the same
periods in 2001. The most significant difference which affected both periods was increases of $69,000 and $104,000 in service charges on deposit accounts for the three and nine month periods in 2002. Service charges on deposit accounts include
various types of service charges, including non-sufficient funds fees on checking accounts which accounted for approximately 69% and 63% of service charges on deposit accounts for the nine months ended September 30, 2002 and 2001,
respectively.



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##### Table of Contents

Other Expenses.Other expenses increased by $148,000 and $293,000 for the three and nine months ended September 30, 2002 as compared to the same period in
2001. For the three and nine month periods ended September 30, 2002, salaries and employee benefits increased by $84,000 and $153,000, respectively, as compared to the same periods in 2001. The increase in salaries and employee benefits for both the
three and nine month periods represents normal increases in salaries and an increase in the number of employees. At September 30, 2002, the number of full-time equivalent employees was 57 compared to 53 at September 30, 2001.

Other operating expenses increased by $53,000 and $135,000 for the three and nine month periods ended September 30, 2002, respectively, as compared to the same periods in 2001. The increase in other operating expenses
included increases of $80,000 and $78,000 in other losses and data processing fees for the nine months ended September 30, 2002 as compared to the same periods in 2001, respectively. For the three months ended September 30, 2002, we incurred a
single other loss of $65,000 related to a counterfeit scheme.

Income Taxes.Income tax expense increased by $105,000 and $143,000 for the three and nine months ended September 30, 2002
as compared to 2001. The effective tax rate for 2002 and 2001 was 27% and 23%, respectively. The effective tax rate continues to be less than the statutory tax rate due to nontaxable interest income on securities.

Net Income.Net income increased by $169,000 and $274,000 for the three and nine months ended September 30, 2002 as compared to the same periods in 2001. The primary reason for the increase in net income for the three
and nine months ended September 30, 2002 as compared to the same period in 2001 is attributable to the increase in net interest income.

|Item 3. | CONTROLS AND PROCEDURES
|------- | -----------------------

Within ninety days prior to the date of filing of this report, we carried out an evaluation, under the supervision and with the participation
of our Chief Executive Officer and the Comptroller, of the design and operation of our disclosure controls and procedures. Based on this evaluation, our Chief Executive Officer and Comptroller concluded that our disclosure controls and procedures
are effective for gathering, analyzing and disclosing the information that we are required to disclose in the reports we file under the Securities Exchange Act of 1934, within the time periods specified in the SECs rules and forms. Our Chief
Executive Officer and Comptroller also concluded that our disclosure controls and procedures are effective in timely alerting them to material information relating to our company required to be included in our periodic SEC filings. In connection
with the new rules, we are in the process of further reviewing and documenting our disclosure controls and procedures, including our internal controls and procedures for financial reporting, and may from time to time make changes designed to enhance
their effectiveness and to ensure that our systems evolve with our business.

There have been no significant changes in our internal controls or in other factors that could significantly affect internal controls
subsequent to the date of this evaluation.



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##### Table of Contents

PART II - Other Information

|Item 4. | Submission of Matters to a Vote of Security Holders.
|------- | ----------------------------------------------------

| |  | The annual meeting of the stockholders of Capitol City Bancshares, Inc. was held on June 25, 2002. A total of 281,414 of the shares issued and outstanding registered for the meeting either in person or by proxy. The
results of the meeting were as follows:
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (a)      The following directors were elected:
| | ----------------------------------------------

|Directors                 |  | For |         | Against |  | Abstain | 
|------------------------- |  | --- | ------- | ------- |  | ------- | 
|                          |  |     |         |         |  |         | 
|                          |  |     |         |         |  |         | 
|George G. Andrews         |  |     | 281,414 |         |  |        | 
|Dr. Gloria Campbell DHue |  |     | 281,414 |         |  |        | 
|J. Al Cochran             |  |     | 281,414 |         |  |        | 
|Keith E. Evans            |  |     | 281,414 |         |  |        | 
|Leon Goodrum              |  |     | 281,414 |         |  |        | 
|Agnes H. Harper           |  |     | 281,414 |         |  |        | 
|Charles W. Harrison       |  |     | 281,414 |         |  |        | 
|Robert A. Holmes          |  |     | 281,414 |         |  |        | 
|Moses M. Jones            |  |     | 281,414 |         |  |        | 
|Marian S. Jordan          |  |     | 281,414 |         |  |        | 
|Kaneta R. Lott            |  |     | 281,414 |         |  |        | 
|Donald F. Marshall        |  |     | 281,414 |         |  |        | 
|George C. Miller, Jr.     |  |     | 281,414 |         |  |        | 
|Elvin Mitchell, Sr.       |  |     | 281,414 |         |  |        | 
|Roy W. Sweat              |  |     | 281,414 |         |  |        | 
|William Thomas            |  |     | 281,414 |         |  |        | 
|Cordy T. Vivian           |  |     | 281,414 |         |  |        | 

|Item 6. | Exhibits and Reports on Form 8-K.
|------- | ---------------------------------

| |  | None.
| |  | -----





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##### Table of Contents

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

|                        |  |  | CAPITOL CITY BANCSHARES, INC.          
|----------------------- |  |  | ---------------------------------------
|Date: November 14, 2002 |  |  | /s/ GEORGEG.ANDREWS                    
|                        |  |  |                                        
|                        |  |  | George G. AndrewsPresident and Director

|                        |  |  |                                             
|----------------------- |  |  | --------------------------------------------
|Date: November 14, 2002 |  |  | /s/ KEVINM.SHARPE                           
|                        |  |  |                                             
|                        |  |  | Kevin M. SharpeVice President andComptroller





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##### Table of Contents



Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, George G. Andrews, President and C.E.O.,
certify that:

|1. |  | I have reviewed this quarterly report on Form 10-QSB of Capitol City Bancshares, Inc.                                                                                                                                                                                                                                         
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |  |                                                                                                                                                                                                                                                                                                                               
|2. |  | Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this quarterly report;
|   |  |                                                                                                                                                                                                                                                                                                                               
|3. |  | Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this quarterly report;                   
|   |  |                                                                                                                                                                                                                                                                                                                               
|4. |  | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
have:                                                                                                         

| | a. |  | designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiary, is made known to us by others within that entity, particularly during
the period in which this quarterly report is being prepared;
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    | 
| | b. |  | evaluated the effectiveness of the registrants disclosure controls and procedures as of a date within 90 days prior to the filing of this quarterly report (the Evaluation Date); and                                                                                                  
| |    | 
| | c. |  | presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;                                                                                                                   

|5. |  | The registrants other certifying officer and I have disclosed, based on our most recent evaluation, to the registrants auditors and the audit committee of registrants board of
directors:
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | a. |  | all significant deficiencies in the design or operation of internal controls which could adversely affect the registrants ability to record, process, summarize and report financial data and have identified for the
registrants auditors any material weaknesses in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    | 
| | b. |  | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal controls; and                                                                                                                                        



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##### Table of Contents

|6. |  | The registrants other certifying officer and I have indicated in this quarterly report whether there were significant changes in internal controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Date: November 14,
2002

| |  |  |                                                                     
| |  |  | --------------------------------------------------------------------
| |  |  | /s/ GEORGEG.ANDREWS                                                 
| |  |  |                                                                     
| |  |  | George G. Andrews, President and C.E.O.(Principal Executive Officer)





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##### Table of Contents



Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Kevin M. Sharpe, Comptroller, certify
that:

|1. |  | I have reviewed this quarterly report on Form 10-QSB of Capitol City Bancshares, Inc.                                                                                                                                                                                                                                         
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |  |                                                                                                                                                                                                                                                                                                                               
|2. |  | Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this quarterly report;
|   |  |                                                                                                                                                                                                                                                                                                                               
|3. |  | Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this quarterly report;                   
|   |  |                                                                                                                                                                                                                                                                                                                               
|4. |  | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
have:                                                                                                         

| | a. |  | designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiary, is made known to us by others within that entity, particularly during
the period in which this quarterly report is being prepared;
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    | 
| | b. |  | evaluated the effectiveness of the registrants disclosure controls and procedures as of a date within 90 days prior to the filing of this quarterly report (the Evaluation Date); and                                                                                                  
| |    | 
| | c. |  | presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;                                                                                                                   

|5. |  | The registrants other certifying officer and I have disclosed, based on our most recent evaluation, to the registrants auditors and the audit committee of registrants board of
directors:
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | a. |  | all significant deficiencies in the design or operation of internal controls which could adversely affect the registrants ability to record, process, summarize and report financial data and have identified for the
registrants auditors any material weaknesses in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    | 
| | b. |  | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal controls; and                                                                                                                                        



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##### Table of Contents

|6. |  | The registrants other certifying officer and I have indicated in this quarterly report whether there were significant changes in internal controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Date: November 14,
2002

| |  |  |                             
| |  |  | ----------------------------
| |  |  | /s/ KEVINM.SHARPE           
| |  |  |                             
| |  |  | Kevin M. Sharpe, Comptroller





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##### Table of Contents



Certificate pursuant to 18 U.S.C. Section 1350, as adopted pursuant toSection 906 of the Sarbanes-Oxley Act of
2002

In connection with the Quarterly Report of Capitol City Bancshares, Inc. (the Company) on Form 10-QSB for the period ending September 30, 2002, as filed with the Securities and Exchange
Commission on the date hereof (the Report), I, George G. Andrews, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

| | 1. |  | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and                               
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------
| |    | 
| | 2. |  | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

| |  |  |                                                                     
| |  |  | --------------------------------------------------------------------
| |  |  | /s/ GEORGEG.ANDREWS                                                 
| |  |  |                                                                     
| |  |  | George G. Andrews, President and C.E.O.(Principal Executive Officer)

November 14, 2002





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##### Table of Contents



Certificate pursuant to 18 U.S.C. Section 1350, as adopted pursuant toSection 906 of the Sarbanes-Oxley Act of
2002

In connection with the Quarterly Report of Capitol City Bancshares, Inc. (the Company) on Form 10-QSB for the period ending September 30, 2002, as filed with the Securities and Exchange
Commission on the date hereof (the Report), I, Kevin M. Sharpe, Comptroller of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

| | 1. |  | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and                               
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------
| |    | 
| | 2. |  | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

| |  |  |                             
| |  |  | ----------------------------
| |  |  | /s/ KEVINM.SHARPE           
| |  |  |                             
| |  |  | Kevin M. Sharpe, Comptroller

November 14, 2002