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U.S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

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FORM
10-QSB

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

For the quarterly period
ended June 30, 2003

| | o | TRANSITION REPORT PURSUANT TO SECTION 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(I.R.S. EmployerIdentification Number) | 
| | -------------------------------------------------------------------- |  | -------------------------------------------------- | 

562 Lee Street, S.W., Atlanta, Georgia 30311(Address of principal executive
office)

(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 stock, as of August 1, 2003: 532,088; $6 par value

Transitional Small Business Disclosure Format Yes o No x

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CAPITOL CITY BANCSHARES, INC. AND SUBSIDIARIES

INDEX



|        |  |                       |  |                                                                                                                                | Page
|------- |  | --------------------- |  | ------------------------------------------------------------------------------------------------------------------------------ | ----
|        |  |                       |  |                                                                                                                                |     
|PARTI.  |  | FINANCIAL INFORMATION | 
|        |  |                       |  |                                                                                                                                |     
|        |  | Item 1.               |  | Financial Statements (unaudited)                                                                                               |     
|        |  |                       |  |                                                                                                                                |     
|        |  |                       |  | Condensed Consolidated Balance Sheet as of June 30, 2003                                                                       | 3   
|        |  |                       |  |                                                                                                                                |     
|        |  |                       |  | Condensed Consolidated Statements of Income and Comprehensive Income for the Three and Six Months Ended June 30, 2003 and 2002 | 4   
|        |  |                       |  |                                                                                                                                |     
|        |  |                       |  | Condensed Consolidated Statements of Cash Flows For The Six Months Ended June 30, 2003 and 2002                                | 5   
|        |  |                       |  |                                                                                                                                |     
|        |  |                       |  | Notes to Condensed Consolidated Financial Statements                                                                           | 6-7 
|        |  |                       |  |                                                                                                                                |     
|        |  | Item 2.               |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                                          | 8-12
|        |  |                       |  |                                                                                                                                |     
|        |  | Item 3.               |  | Controls and Procedures                                                                                                        | 12  
|        |  |                       |  |                                                                                                                                |     
|PARTII. |  | OTHER INFORMATION     | 
|        |  |                       |  |                                                                                                                                |     
|        |  | Item 4.               |  | Submission of Matters to a Vote of Security Holders                                                                            | 13  
|        |  |                       |  |                                                                                                                                |     
|        |  | Item 6.               |  | Exhibits and Reports on Form 8-K                                                                                               | 13  

|SIGNATURES | 14
|---------- | --
|           |   





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##### Table of Contents

PART I - FINANCIAL INFORMATION

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

CAPITOL CITY BANCSHARES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETJUNE 30, 2003(Unaudited)



|Assets                                                                                         |  |   |             | 
|---------------------------------------------------------------------------------------------- |  | - | ----------- | 
|Cash and due from banks                                                                        |  | $ | 5,295,582   | 
|Interest-bearing deposits in banks                                                             |  |   | 81,707      | 
|Federal funds sold                                                                             |  |   | 2,276,000   | 
|Securities available-for-sale, at fair value                                                   |  |   | 31,215,486  | 
|Restricted equity securities                                                                   |  |   | 117,800     | 
|Loans                                                                                          |  |   | 78,714,709  | 
|Less allowance for loan losses                                                                 |  |   | 958,802     | 
|                                                                                               |  |   |             | 
|Loans, net                                                                                     |  |   | 77,755,907  | 
|                                                                                               |  |   |             | 
|Premises and equipment                                                                         |  |   | 5,007,087   | 
|Other assets                                                                                   |  |   | 2,006,741   | 
|                                                                                               |  |   |             | 
|Total assets                                                                                   |  | $ | 123,756,310 | 
|                                                                                               |  |   |             | 
|Liabilities and Stockholders Equity                                                           |  |   |             | 
|Deposits                                                                                       |  |   |             | 
|Noninterest-bearing                                                                            |  | $ | 23,937,798  | 
|Interest-bearing                                                                               |  |   | 83,389,218  | 
|                                                                                               |  |   |             | 
|Total deposits                                                                                 |  |   | 107,327,016 | 
|Securities sold under repurchase agreements                                                    |  |   | 1,112,000   | 
|Other liabilities                                                                              |  |   | 1,147,461   | 
|Note payable                                                                                   |  |   | 370,500     | 
|Company guaranteed trust preferred securities                                                  |  |   | 3,300,000   | 
|                                                                                               |  |   |             | 
|Total liabilities                                                                              |  |   | 113,256,977 | 
|                                                                                               |  |   |             | 
|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                                                                              |  |   | 4,401,205   | 
|Accumulated other comprehensive income                                                         |  |   | 777,248     | 
|                                                                                               |  |   |             | 
|Total stockholders equity                                                                     |  |   | 10,499,333  | 
|                                                                                               |  |   |             | 
|Total liabilities and stockholders equity                                                     |  | $ | 123,756,310 | 
|                                                                                               |  |   |             | 

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 SIX MONTHS ENDED JUNE 30, 2003 AND 2002(Unaudited)



|                                                                                    |  | ThreeMonthsEndedJune30, |           | SixMonthsEndedJune30, |  
|----------------------------------------------------------------------------------- |  | ----------------------- | --------- | --------------------- | -
|                                                                                    |  |                         |           |                       |  
|                                                                                    |  | 2003                    |           | 2002                  |  
|                                                                                    |  |                         |           |                       |  
|Interest income                                                                     |  |                         |           |                       |  
|Loans, including fees                                                               |  | $                       | 1,565,712 |                       | $
|Taxable securities                                                                  |  |                         | 153,785   |                       |  
|Nontaxable securities                                                               |  |                         | 131,804   |                       |  
|Federal funds sold                                                                  |  |                         | 7,398     |                       |  
|                                                                                    |  |                         |           |                       |  
|Total interest income                                                               |  |                         | 1,858,699 |                       |  
|Interest expense                                                                    |  |                         |           |                       |  
|Deposits                                                                            |  |                         | 560,215   |                       |  
|Other borrowings                                                                    |  |                         | 59,006    |                       |  
|                                                                                    |  |                         |           |                       |  
|Total interest expense                                                              |  |                         | 619,221   |                       |  
|Net interest income                                                                 |  |                         | 1,239,478 |                       |  
|Provision for loan losses                                                           |  |                         | 56,000    |                       |  
|                                                                                    |  |                         |           |                       |  
|Net interest income after provision for loan losses                                 |  |                         | 1,183,478 |                       |  
|                                                                                    |  |                         |           |                       |  
|Other income                                                                        |  |                         |           |                       |  
|Service charges on deposit accounts                                                 |  |                         | 522,867   |                       |  
|Other fees and commissions                                                          |  |                         | 4,061     |                       |  
|Other operating income                                                              |  |                         | 70,694    |                       |  
|                                                                                    |  |                         |           |                       |  
|Total other income                                                                  |  |                         | 597,622   |                       |  
|                                                                                    |  |                         |           |                       |  
|Other expenses                                                                      |  |                         |           |                       |  
|Salaries and employee benefits                                                      |  |                         | 591,514   |                       |  
|Occupancy and equipment expenses                                                    |  |                         | 158,573   |                       |  
|Other operating expenses                                                            |  |                         | 541,783   |                       |  
|                                                                                    |  |                         |           |                       |  
|Total other expenses                                                                |  |                         | 1,291,870 |                       |  
|                                                                                    |  |                         |           |                       |  
|Net income before income taxes                                                      |  |                         | 489,230   |                       |  
|Income tax expense                                                                  |  |                         | 96,722    |                       |  
|                                                                                    |  |                         |           |                       |  
|Net income                                                                          |  |                         | 392,508   |                       |  
|                                                                                    |  |                         |           |                       |  
|Other comprehensive income                                                          |  |                         |           |                       |  
|Unrealized gains on securities available-for-sale arising during period, net of tax |  |                         | 132,299   |                       |  
|                                                                                    |  |                         |           |                       |  
|Comprehensive income                                                                |  | $                       | 524,807   |                       | $
|                                                                                    |  |                         |           |                       |  
|Basic earnings per common share                                                     |  | $                       | 0.74      |                       | $
|                                                                                    |  |                         |           |                       |  
|Diluted earnings per common share                                                   |  | $                       | 0.70      |                       | $
|                                                                                    |  |                         |           |                       |  
|Cash dividends declared per share of common stock                                   |  | $                       |          |                       | $
|                                                                                    |  |                         |           |                       |  

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

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CAPITOL CITY BANCSHARES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWSFOR
THE SIX MONTHS ENDED JUNE 30, 2003 AND 2002(Unaudited)



|                                                                                  |  | 2003 |             | 2002 |  
|--------------------------------------------------------------------------------- |  | ---- | ----------- | ---- | -
|                                                                                  |  |      |             |      |  
|OPERATING ACTIVITIES                                                              |  |      |             |      |  
|Net income                                                                        |  | $    | 623,116     |      | $
|Adjustments to reconcile net income to net cash provided by operating activities: |  |      |             |      |  
|Depreciation                                                                      |  |      | 156,819     |      |  
|Provision for loan losses                                                         |  |      | 211,000     |      |  
|Loss on sale of equipment                                                         |  |      | 3,081       |      |  
|Net other operating activities                                                    |  |      | (134,987    | )    |  
|                                                                                  |  |      |             |      |  
|Net cash provided by operating activities                                         |  |      | 859,029     |      |  
|                                                                                  |  |      |             |      |  
|INVESTING ACTIVITIES                                                              |  |      |             |      |  
|Purchases of securities available-for-sale                                        |  |      | (4,537,363  | )    |  
|Proceeds from maturities of securities available-for-sale                         |  |      | 7,877,629   |      |  
|Net increase in interest-bearing deposits                                         |  |      | (2,627      | )    |  
|Net increase in federal funds sold                                                |  |      | (444,000    | )    |  
|Purchases of restricted equity securities                                         |  |      | (300        | )    |  
|Net increase in loans                                                             |  |      | (13,407,488 | )    |  
|Purchase of premises and equipment                                                |  |      | (902,008    | )    |  
|Proceeds from sale of equipment                                                   |  |      | 10,000      |      |  
|                                                                                  |  |      |             |      |  
|Net cash used in investing activities                                             |  |      | (11,406,157 | )    |  
|                                                                                  |  |      |             |      |  
|FINANCING ACTIVITIES                                                              |  |      |             |      |  
|Net increase in deposits                                                          |  |      | 9,695,286   |      |  
|Net decrease in securities sold under repurchase agreements                       |  |      | (388,000    | )    |  
|Proceeds from issuance of trust perferred securities                              |  |      | 3,300,000   |      |  
|Proceeds from notes payable                                                       |  |      | 120,000     |      |  
|Payment of dividends                                                              |  |      | (79,813     | )    |  
|                                                                                  |  |      |             |      |  
|Net cash provided by financing activities                                         |  |      | 12,647,473  |      |  
|                                                                                  |  |      |             |      |  
|Net increase in cash and due from banks                                           |  |      | 2,100,345   |      |  
|Cash and due from banks, beginning of period                                      |  |      | 3,195,237   |      |  
|                                                                                  |  |      |             |      |  
|Cash and due from banks, end of period                                            |  | $    | 5,295,582   |      | $
|                                                                                  |  |      |             |      |  

The accompanying notes are an integral part of thesecondensed 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.

The results of operations for
the three and six month periods ended June 30, 2003 are not necessarily indicative of the results to be expected for the full year.

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

Presented below is a summary of the components used to calculate basic and diluted earnings
per common share for the three and six months ended June 30, 2003 and 2002.



|                                                                                                                                 |  | ThreeMonthsEndedJune30, |         | SixMonthsEndedJune30, |  
|-------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------- | ------- | --------------------- | -
|                                                                                                                                 |  |                         |         |                       |  
|                                                                                                                                 |  | 2003                    |         | 2002                  |  
|                                                                                                                                 |  |                         |         |                       |  
|Net income                                                                                                                       |  | $                       | 392,508 |                       | $
|                                                                                                                                 |  |                         |         |                       |  
|Weighted average common shares outstanding                                                                                       |  |                         | 532,088 |                       |  
|Net effect of the assumed exercise of stock options based on the treasury stock method using average market price for the period |  |                         | 31,342  |                       |  
|                                                                                                                                 |  |                         |         |                       |  
|Total weighted average common shares and common stock equivalents outstanding                                                    |  |                         | 563,430 |                       |  
|                                                                                                                                 |  |                         |         |                       |  
|Diluted earnings per common share                                                                                                |  | $                       | 0.70    |                       | $
|                                                                                                                                 |  |                         |         |                       |  

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

| | NOTE 3. | STOCK COMPENSATION PLAN
| | ------- | -----------------------

At June 30, 2003, the Company has a stock-based compensation plan. The Company accounts for
this plan under the recognition and measurement principles of APB Opinion No. 25,Accounting for Stock Issued to Employees, and related Interpretations. No stock-based compensation cost is reflected in
net income, as all options granted under this plan had an exercise price equal to the market value of the underlying stock on the date of grant. The following table illustrates the effect on net income and earnings per share if the Company had
applied the fair value recognition provisions of SFAS Statement No. 123,Accounting for Stock-Based Compensation, to stock-based employee compensation.



|                                                                                                                                            |  | SixMonthsEndedJune30, |        
|------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------- | -------
|                                                                                                                                            |  |                       |        
|                                                                                                                                            |  | 2003                  |        
|                                                                                                                                            |  |                       |        
|Net income, as reported                                                                                                                     |  | $                     | 623,116
|Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects |  |                       |       
|                                                                                                                                            |  |                       |        
|Pro forma net income                                                                                                                        |  | $                     | 623,116
|                                                                                                                                            |  |                       |        
|Earnings per share:                                                                                                                         |  |                       |        
|Basic - as reported                                                                                                                         |  | $                     | 1.17   
|                                                                                                                                            |  |                       |        
|Basic - pro forma                                                                                                                           |  | $                     | 1.17   
|                                                                                                                                            |  |                       |        
|Diluted - as reported                                                                                                                       |  | $                     | 1.11   
|                                                                                                                                            |  |                       |        
|Diluted - pro forma                                                                                                                         |  | $                     | 1.11   
|                                                                                                                                            |  |                       |        

| | NOTE 4. | RECENT DEVELOPMENTS
| | ------- | -------------------

In November 2002, the Financial Accounting Standards Board (FASB) issued FASB
Interpretation No. 45, Guarantors Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others. The interpretation addresses the disclosures to be made by a guarantor in its interim
and annual financial statements about its obligations under guarantees. The interpretation also clarifies the requirements related to the recognition of a liability by a guarantor at the inception of a guarantee, for the fair value of the obligation
undertaken in issuing the guarantee. The initial recognition and initial measurement provisions of the interpretation are to be applied to guarantees issued or modified after December 31, 2002. As of June 30, 2003, the interpretation has not had a
material effect on the financial condition or results of operations, and there are no guarantees required to disclosed.

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CAPITOL CITY BANCSHARES, INC. AND SUBSIDIARIES

| | Item 2. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 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 $13.7 million from $110.1 million to $123.8 million, or 12.44% for the six months ended June 30, 2003. The growth continues to be funded primarily by increases in total deposits, which increased by $9.7 million
accompanied by the issuance of $3,300,000 of guaranteed trust preferred securities. The net increase in total assets for the six months ended June 30, 2003 consisted primarily of an increase of $13.4 million in total loans, an increase of $2.1
million in cash and due from banks, an increase in federal funds sold of $444,000 and an increase of $732,000 in premises and equipment offset by a decrease in securities available-for-sale of $3.2 million. The increase in premises and equipment
reflects the construction in process of our Savannah, Georgia branch. The loan to deposit ratio at June 30, 2003 was 73% compared to 68% at December 31, 2002. The increase in the loan to deposit ratio as compared to December 2002 is due to total
loans increasing by $12.4 million compared to increases in total deposits of $9.7 million. The increase in other assets includes $710,000 of foreclosed other real estate owned that was transferred from loans. These assets are carried at their fair
value.

Stockholders equity increased by $648,000 for the six months ended June 30, 2003. This net increase consists of net income of $623,000 less dividends declared and
paid of $80,000 and an increase in unrealized gains on securities available-for-saleof $105,000.

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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 June 30, 2003, the Banks liquidity was considered
satisfactory in relation to regulatory guidelines and internal target ratios. The liquidity ratio was 30.50% at June 30, 2003.

REGULATORY CAPITAL REQUIREMENTS

Banking regulations require us to maintain minimum capital levels in relation to assets. At June 30, 2003, 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 June 30, 2003 are as follows:



|                          |  | CapitolCityBank&TrustCompany |   | RegulatoryMinimumRequirement |  
|------------------------- |  | ---------------------------- | - | ---------------------------- | -
|                          |  |                              |   |                              |  
|Leverage Capital Ratio    |  | 10.90                        | % | 4.00                         | %
|Risk-Based Capital Ratios |  |                              |   |                              |  
|Core Capital              |  | 11.90                        | % | 4.00                         | %
|Total Capital             |  | 12.76                        | % | 8.00                         | %

During the second quarter of 2003, we injected additional capital into the Bank, from the proceeds of
the Trust Preferred Securities offering which returned our capital ratios to well capitalized.

We are in the process of opening our Savannah, Georgia branch. The estimated cost
to complete the branch, including furnishings, is approximately $885,000.

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

Three and Six Months Ended June 30, 2003 and 2002

Net Interest Income. Net interest income
increased by $176,000 and $352,000 for the three and six month periods ended June 30, 2003, respectively, compared to the same period in 2002. The increase in net interest income for both periods ended June 30, 2003 is attributable to an increase in
earning assets of $26.7 million as compared to June 30, 2002 combined with the spread maintained between rates earned on interest earning assets and rates paid on interest bearing liabilities. Loans increased during this period by $24.2 million,
which generally provide greater yields to the Company. During this same period, total deposits increased by

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$24.2 million, which included an increase of $21.9 million in interest-bearing deposits and an increase of $2.3 million in non-interest bearing deposits. The
overall net increase in net interest income is based on the spread between rates earned on interest-earning assets and rates paid on interest-bearing liabilities.

The net
interest margin decreased to 4.59% at June 30, 2003 as compared to 5.12% at June 30, 2002. The yield on interest-earning assets decreased to 6.83% or 71 basis points from June 30, 2002 to June 30, 2003. The rate paid on interest-bearing
liabilities decreased to 2.83% or 67 basis points for the same period. These decreases reflect the continued adjustment in rates as the prime rate declined over the past two years.

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 $211,000 was made during the six month period ending
June 30, 2003 based upon this evaluation process as compared to no provision for the same period in 2002. The allowance for loan loss as a percentage of total loans was 1.22% at June 30, 2003, compared to 1.60% at December 31, 2002. The total
nonperforming loans at June 30, 2003 was $937,000 compared to $1.0 million at June 30, 2002. Loans past due 90 days or more and still accruing interest increased by $1,006,000 at June 30, 2003 as compared to June 30, 2002. Net charge-offs for the
six months ended June 30, 2003 increased by $322,000 as compared to the same period in 2002. Management believes the allowance for loan loss at June 30, 2003 is adequate to meet any future losses in the loan portfolio. The increase in the provision
in 2003 as compared to 2002 reflects the increase in net charge-offs for the six months ended June 30, 2003.

At June 30, 2003 and 2002, nonaccrual, past due, and
restructured loans were as follows:



|                                                                                                         |  | June30,2003          |       | June30,2002 |  
|-------------------------------------------------------------------------------------------------------- |  | -------------------- | ----- | ----------- | -
|                                                                                                         |  |                      |       |             |  
|                                                                                                         |  | (Dollarsinthousands) |      
|Total nonaccruing loans                                                                                  |  | $                    | 937   |             | $
|Loans contractually past due ninety days or more as to interest or principal payments and still accruing |  |                      | 1,016 |             |  
|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 six months ended June 30, 2003 and 2002 is as follows:



|                                                                                     |  | SixMonthsEndedJune30, |       
|------------------------------------------------------------------------------------ |  | --------------------- | ------
|                                                                                     |  |                       |       
|                                                                                     |  | 2003                  |       
|                                                                                     |  |                       |       
|                                                                                     |  | (Dollarsinthousands)  |       
|Average amount of loans outstanding                                                  |  | $                     | 71,294
|                                                                                     |  |                       |       
|Balance of allowance for loan losses at beginning of period                          |  | $                     | 1,059 
|Loans charged off                                                                    |  |                       |       
|Commercial and financial                                                             |  |                       | (164  
|Real estate                                                                          |  |                       | (104  
|Installment                                                                          |  |                       | (120  
|                                                                                     |  |                       |       
|                                                                                     |  |                       | (388  
|                                                                                     |  |                       |       
|Loans recovered                                                                      |  |                       |       
|Commercial and financial                                                             |  |                       | 3     
|Real estate                                                                          |  |                       | 39    
|Installment                                                                          |  |                       | 35    
|                                                                                     |  |                       |       
|                                                                                     |  |                       | 77    
|                                                                                     |  |                       |       
|Net (charge-offs) recoveries                                                         |  |                       | (311  
|                                                                                     |  |                       |       
|Additions to allowance charged to operating expense during period                    |  |                       | 211   
|                                                                                     |  |                       |       
|Balance of allowance for loan losses at end of period                                |  |                       | 959   
|                                                                                     |  |                       |       
|Ratio of net (charge-offs) recoveries during the period to average loans outstanding |  |                       | (44   
|                                                                                     |  |                       |       

Other Income.Other income increased by $131,000 for the three months
ended June 30, 2003 and increased by $218,000 for the six months ended June 30, 2003 compared to the same periods in 2002. The most significant difference which affected both periods was increases of $112,000 and $184,000 in service charges on
deposit accounts for the three and six months periods ended June 30, 2003, respectively.

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Other Expenses.Other expenses increased by $196,000 and $460,000 for the three and six months ended June 30, 2003 as compared to
the same periods in 2002. The most significant increases in 2003 are increases of $90,000 and $229,000 in salaries and employee benefits for the three and six month periods ended June 30, 2003. During the same periods, occupancy expenses increased
by $64,000 and $87,000, respectively; and other operating expenses increased by $42,000 and $144,000 respectively. The increase in salaries and employee benefits for both the three and six month periods represent normal increases in salaries and an
increase in the number of employees. At June 30, 2003, the number of full-time equivalent employees was 60 compared to 53 at June 30, 2002. The increase in occupancy and equipment expenses reflect the cost of maintaining and up-dating the
banks computer system, maintenance of premises and equipment and increased depreciation expense associated with the banks new operations center. The increases in other operating expenses includes increases in expenses directly related to
increased activity in both loans and deposits and expenses related to marketing, advertising and director fees.

Income Taxes.Income tax expense
decreased by $12,000 and $37,000 for the three and six months ended June 30, 2003 as compared to 2002. The effective tax rate for 2003 and 2002 was 25% and 26%, respectively. The effective tax rate is less than the statutory tax rate due to
nontaxable interest income on securities.

Net Income.Net income increased by $65,000 for the three months ended June 30, 2003 as compared to the same
period in 2002 and decreased by $64,000 for the six month period ended June 30, 2003. The primary reason for the increase in net income for the three months ended June 30, 2003 as compared to the same period in 2002 is attributable to the increase
in net interest income. The primary reason for the decrease in net income for the six month period ended June 30, 2003 is the increase in the provision for loan losses as compared to the same period in 2002.

ITEM 3.CONTROLS AND PROCEDURES

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the
participation of our Chief Executive Officer and the Chief Financial Officer, of the design and operation of our disclosure controls and procedures. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer 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 Chief Financial Officer 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. We continually review 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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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 24, 2003. A total of 292,500 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         |  | 292,450 |  | 50      |  |        | 
|Dr. Gloria Campbell DHue |  | 292,450 |  | 50      |  |        | 
|J. Al Cochran             |  | 292,450 |  | 50      |  |        | 
|Leon Goodrum              |  | 292,450 |  | 50      |  |        | 
|Agnes H. Harper           |  | 292,450 |  | 50      |  |        | 
|Charles W. Harrison       |  | 292,450 |  | 50      |  |        | 
|Robert A. Holmes          |  | 292,450 |  | 50      |  |        | 
|Moses M. Jones            |  | 292,450 |  | 50      |  |        | 
|Marian S. Jordan          |  | 292,450 |  | 50      |  |        | 
|Kaneta R. Lott            |  | 292,450 |  | 50      |  |        | 
|Donald F. Marshall        |  | 292,450 |  | 50      |  |        | 
|George C. Miller, Jr.     |  | 292,450 |  | 50      |  |        | 
|Elvin Mitchell, Sr.       |  | 292,450 |  | 50      |  |        | 
|Roy W. Sweat              |  | 292,450 |  | 50      |  |        | 
|William Thomas            |  | 292,450 |  | 50      |  |        | 
|Cordy T. Vivian           |  | 292,450 |  | 50      |  |        | 

ITEM 6.EXHIBITS AND REPORTS ON FORM 8-K.

(a)Exhibits.



|ExhibitNumber | Exhibit                                                 
|------------- | --------------------------------------------------------
|              |                                                         
|31.1          | Section 302 Certification of Principal Executive Officer
|              |                                                         
|31.2          | Section 302 Certification of Principal Financial Officer
|              |                                                         
|32.1          | Section 906 Certification of Principal Executive Officer
|              |                                                         
|32.2          | Section 906 Certification of Principal Financial Officer

(b)Reports on Form 8-K.

None

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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: August 14, 2003 |  |  | /s/ GEORGEG.ANDREWS                    
|                      |  |  |                                        
|                      |  |  | George G. AndrewsPresident and Director



|Date: August 14, 2003 |  |  | /s/ KEVINM.SHARPE                                                          
|--------------------- |  |  | ---------------------------------------------------------------------------
|                      |  |  |                                                                            
|                      |  |  | Kevin M. SharpeVice President and Principal Financialand Accounting Officer



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